South Africa Finally Recognizes its AIDS Crisis

New York Times:
Pieter Bauermeister

For too long, the South African government has largely ignored the humanitarian and economic problems caused by AIDS. While the African continent in segmented in clearly defined regions, each having its own prescribed strengths and weaknesses, South Africa is widely considered the continent’s leader as the wealthiest country, both in gross domestic capita (GDP) per capita and in total GDP. However, as the country that produces 22 percent of Africa’s GDP, according to the International Monetary Fund, South Africa has historically failed to take a leading role in addressing its AIDS problem. Therefore, it gives me great encouragement to learn about that the South African government is increasing its efforts to combat AIDS.

Celia Dugger’s New York Times article published on April 15, 2010 explains that South Africa’s “undertaking will be expensive and difficult to pull off, but in the past month alone the government has enabled 519 hospitals and clinics to dispense AIDS medicines, more than it had in all the years combined since South Africa began providing antiretroviral drugs to its people in 2004, South African health officials said. To accomplish this, the government has trained the hundreds of nurses now prescribing the drugs — formerly the province of doctors — and will train thousands more so that each of the country’s 4,333 public clinics can dispense AIDS medicines, a step Health Minister Aaron Motsoaledi called essential to combating ‘this monster amongst us’ in a country short of physicians.”

By hosting the 2010 FIFA World Cup, South Africa will attempt to demonstrate itself as a strong player in today’s increasing global world. More important than the hosting one of world’s largest sporting events, South Africa is finally making significant efforts to fight the deadly disease that has caused South Africa to serve as a country to be “most severely affected by the AIDS epidemic, with the largest number of HIV infections in the world,” according to the South Africa 2010 Country Progress Report.

The Country Progress Report further explains, “Heterosexual sex is recognized as the predominant mode of HIV transmission in the country followed by mother-to-child transmission, and drivers of the epidemic include migration, low perceptions of risk, and multiple concurrent sexual partnerships.” While I do not want to diminish the essential efforts of South Africa’s strategy to treat AIDS, there must be an equally concentrated effort to teach prevention among adults and children alike. In order for emerging countries like South Africa to have a significant role in the global economy, it must maintain an educated and healthy workforce. South Africa has a great incentive to reduce its HIV infection rate, which now occurs at 1,500 per day, according to the health minister, before treatment costs rise further.

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

IMF Grants $600m Loan to Ghana: Who Will it Help?

The following is a guest post by Samantha Rayner, Executive Director of Lumana Credit

In a rush of excitement, a friend approached me the other day stating that the IMF had announced that they would provide a loan in the amount of US$600 million to the Ghanaian government in an effort "to reduce its budget deficit and support its currency" (http://news.bbc.co.uk/2/hi/business/8155374.stm). While I could see the need for funding, I didn't jump to share my friend's optimism. Whenever the IMF announces the provision of more aid to Africa, I have to ask, how is it going to help and what accountability system is in place to ensure results?

True, Ghana is experiencing a serious budget deficit mostly due to a decrease in rainfall over the past few years which caused an increase in food prices. There is clearly a need for aid but how are these funds going to get to the rural farmers who need the monetary assistance most? Driving through the neighborhoods of Accra, Ghana's capital, in August of 2008, I was amazed to see immaculate government mansions only minutes away from poor slum dwellers and beggars. It instantly became clear that funds such as those from the IMF were not going to the poorest of the poor.

Seeing the income disparity first hand and wondering where all the aid money was really going, I took action upon my return to the US and started my own organization, Lumana Credit. We are a microfinance operation that provides small loans, entrepreneurship training, and simple technology solutions to small businesses in rural Ghana. Lumana focuses on serving clients in rural areas of Africa as opposed to urban settings where the majority of microfinance institutions (MFIs) are located.

While much attention has been given to microfinance in Africa in recent years, surprisingly less that 10% of the industry financing is actually going there.India, for example, recieves around half of the capital, primarily due to the high density of clients which causes operational costs to be lower. In Africa, over 75% of those living below the poverty line are located in rural areas, a potential reason for the lack of microfinance funds going to the continent.

Referring back to the $600 million loan to Ghana this year, imagine if those funds were going into microfinance institutes? Poor people with access to savings, credit, insurance, and other financial services, are more resilient and better able to cope with the everyday crises they face. Even the most rigorous studies have proven that microfinance can smooth consumption levels and significantly reduce the need to sell assets to meet basic needs. With loans as little as $50 in some cases, people like Comfort, a Lumana client, would able to purchase clean water for the first time and improve the profits of her porridge selling business. Unfortunately, I have a hard time seeing the IMF funds going to people like Comfort.

Samantha Rayner is the Executive Director of Lumana Credit, a Seattle, Washington-based nonprofit micro-credit organization that focuses on serving rural and underserved populations in Ghana. To learn more about Lumana Credit, please visit http://www.lumana.org/.