AIDS a major threat to Mozambican economy - IMF

from Reuters Africa

By Charles Mangwiro

MAPUTO (Reuters) - AIDS is becoming a major threat to Mozambique's booming economy, killing off workers who are key to the southern African nation's development, the International Monetary Fund (IMF) said on Friday.

More than 16 percent of Mozambicans between the ages of 14 and 49, generally the most economically productive, are infected with HIV. An estimated 500 new infections occur each day.

"It is affecting the prospects of Mozambique, particularly its limited human resources," Age Bakker, the head of an IMF mission to the country, told reporters in the Mozambican capital Maputo.

"We recommend the government to work harder, although we reckon that it (the pandemic) has the full attention of the government," Bakker added.

Mozambique, one of the poorest nations in the world, is struggling to find the money to rebuild its dilapidated health-care system, which was neglected during a 17-year civil war that ended in 1992.

Only a fraction of those requiring anti-retroviral drugs in the former Portuguese colony have access to the life-saving treatments. There are plans to set up a factory to produce them in Mozambique.

The IMF mission also urged the government to do more to address poverty reduction as well as to lower the cost of doing business and support the development of small- and medium-sized businesses.

Mozambique's economy has been booming in recent years, spurred by a rise in foreign investment and development aid. Growth is projected to hit 7 percent in 2008 after reaching 7.5 percent in 2007.

"Despite the authorities' efforts, poverty levels are still high and there is a need to develop polices towards employment generation and improvement of income distribution within different regions of the country," Bakker said.