Economic impact of Ebola: Time to panic?

Photo: Luis Encinas/MSF

 

The fight against Ebola is proving to be a difficult challenge for both African and Western governments. With its recent arrival in both the U.S and U.K, many are now advocating for extreme measures to take place. For example, blanket bans on air transportation and emigration from West Africa. Although we do not subscribe to such a view, it is clear that affirmative action and clear leadership is required.

Last month, it was announced that William Pooley from Suffolk, had contracted Ebola after caring for patients with the disease in Sierra Leone. He is the first Briton to have caught the disease and was kept in a highly monitored isolation unit at London’s Royal Free Hospital. Unfortunately there is no cure but with the treatment and care that William Pooley received, he was recently released.

There is no other isolation unit that is capable of housing patients with Ebola and similar infectious diseases in Europe. In West Africa, where the ongoing outbreak originated, treatment facilities are extremely limited and thousands of people have died. As Ebola has a mortality rate of up to 90%, the World Health Organisation (WHO) warns that this number could exceed 20,000 in due course.

The sheer amount of life that has been – and will be – lost is inconceivable and devastating in itself but there are some significant negative economic effects that Ebola has also caused.

1. The toll on tourism
Usually, the first and most obvious thing to be affected during any epidemic is tourism. Remember when swine flu broke out? We were all told to avoid Mexico as much as possible. The same applies this time, with the places in question being countries in West Africa such as Guinea, Liberia, Sierra Leone and Nigeria. The UK Foreign and Commonwealth Office has issued a stern warning on travelling to the first three, and a number of airlines including British Airways are responding by suspending flights.

2. Closing of businesses
Travel restrictions for both tourists and locals have caused shops and markets to shut down all over the affected countries, meaning that all those affiliated with the businesses (producers, owners, traders etc.) are experiencing losses in income. This has also been caused by fear of human contact due to the rapid spreading of the Ebola virus.

3. Straining the funds of governments
The governments in the affected countries are working hard to gather money for Ebola treatments and to improve treatment facilities, but it is definitely proving difficult. Sierra Leone is issuing Treasury bills (Short term government debt) to help fund the fight against the virus. Governments could expect to have to increase their spending if the virus continues to spread quickly or remains out of control for a lengthy period.

4. Reduced expected economic growth
The rates of future economic growth in West Africa which were predicted before the outbreak of this destructive epidemic have been lowered. An assessment made by the World Bank-IMF stated that the GDP (Gross Domestic Product – the total amount a country can produce at one time) of Guinea will fall from 4.5% to 3.5% due to the Ebola crisis. Also, the expected level of growth in Liberia (5.9%) is now considered unlikely by the Liberian minister of finance. Substantial economic or medical improvements in the near future are improbable. Diseases such as Ebola know no boundaries and it is clear that the countries at the heart of the crisis will struggle to recover.

 

Overall, the full economic impact of Ebola is difficult to quantify however, it has become clear that we are facing one of the deadliest outbreaks of modern times. 

 

***Update***

-WHO estimates up to 10,000 West Africa Ebola cases a week by Dec. 1

-Sierra Leone says it needs $1 Billion to finance Ebola battle

-Ebola screening begins at Heathrow as U.K steps up precautions

-Guinea says Ebola panic is an Evil that risks ‘breaking’ economies

-Ebola alarms on U.S. Jets mean any sign of sickness will be viewed as deadly

-Ebola patient in German clinic dies overnight, hospital says

 By Kimberley John

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