Aids to Hit Workforce in '03

South Africa's economy will be hard hit in 2003 as hundreds of thousands of HIV-infected workers develop full-blown Aids, and few companies have prepared for this.

Clem Sunter, a strategist for Anglo American, South Africa's largest listed company, said most of the country's five million HIV-positive people had contracted the disease between 1995 and 1999 and were only now starting to get sick.

"The worrying fact for business is that the infection curve does not have an economic impact. The sickness curve does," he said.

Some 20 percent of South Africa's adult population is HIV-positive. A total of 400000 people died of Aids in 2002 and by 2005 six million are expected to be infected.

South Africa's government is regularly criticised by business for not doing enough to fight the pandemic, yet the a recent survey by a South African auditing firm found the majority of the country's companies are largely apathetic about the impending Aids crisis.

The International Business Owners Survey of 250 medium-sized companies by accounting firm Grant Thornton Kessel Feinstein (GTKF) showed that 69 percent of the respondents did not have an Aids policy, while 85 percent had not even commissioned a risk assessment.

Sunter said the results of the survey seemed to confirm South African business's lackadaisical approach to the disease.

"Unfortunately, Aids is not seen as a strategic issue and it appears companies will not act until the disease starts impacting on their bottom line," he said.

The disease is already starting to affect the profits of some companies.

Sunter said last year Coca-Cola reported a fall in sales in KwaZulu-Natal, the province where 33,5 percent of the population has the HI virus, the highest rate in South Africa.

Some of the largest South African companies, such as Anglo American, mining company Goldfields and SAB Miller realised some years ago the cost Aids would have and introduced policies which included providing workers with drugs to fight the effects of the disease.

Sunter said many small and medium-sized companies were intimidated by what they thought was the high cost of medication.

"What many businesses do not realise is that from an economic perspective it makes more sense for a company to intervene and provide Aids treatment for employees."

Sunter said five years ago it cost between R35000 and R50000 per annum to provide a person with Aids medicine.

Today it costs between R8000 and R10000: far less than it would cost a company to replace and retrain an employee.

"When an employee dies, the company has to replace that person and re-skill him and this costs money."

Sunter said it was not too late to act.

"South Africa is only just going on the Aids sickness curve. It takes an average of six to eight years before a person becomes sick from the disease. There is still time."

Leanne Bac, head of GTKF Strategic Solutions, said it seemed that medium-sized businesses "had their heads buried in the sand" when it came to Aids.

"Aids will decrease the size of the local market as costs like health, medical aid and insurance decrease income in most houses," Bac said.

Company would also have to pay more on insurance, pension schemes, administration costs and medical aid premiums.

The GTKF survey showed only 10 percent of the companies surveyed managed Aids in the boardroom. Bac said most decisions on Aids were made by human resource departments and fell flat.

"When a director manages Aids it is far easier and quicker to get decisions implemented."

The SA Institute of Chartered Accountants and the JSE Securities Exchange are preparing guidelines that will see firms detailing the HIV/Aids-related expenses they incur on a year-to-year basis.

"Foreign investors know there is a problem. They would rather invest in companies doing something about Aids than ones hiding it."/wj