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Document Abstract
Published: 2009

The macro-micro nexus in scaling-up aid: the case of HIV and AIDS control in Kenya, Malawi and Zambia

Finance for HIV/AIDS in three African countries
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With increasing demand for resources to tackle the global HIV/AIDS epidemic, questions arise as to where such resources are to be found and whether they can be fully absorbed and spent. One major source of financing for HIV and AIDS control is external aid. The debate continues as to whether increased external assistance causes macroeconomic instability. The paper argues that an increase in government expenditure, combined with proper micro-management through the greater coordination, efficiency and implementation of innovative projects and programmes, will lead to a more effective response and may prevent macroeconomic instability.

Focussing on Malawi, Zambia and Kenya, the study finds that for all three countries studied, funds are not the immediate problem. HIV and AIDS-related assistance has increased and is projected to rise further in the future. Rather, the need is for full absorption and spending of the funds available. Thus, scaling-up and fully absorbing and spending aid for the alleviation of HIV and AIDS should be the main priority of these governments, outweighing even macroeconomic stability in importance. While it is clear that fears of Dutch Disease are exaggerated and to some extent unfounded, we argue that proper micro-management, combined with an expansionary macroeconomic policy and budgetary framework, can mitigate inflationary pressures and lead to successful responses.
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D. Hailu; S. Singh

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