Ebola's cost to African economies
A padlock hangs on the door of a shop containing a dead body on August 16, 2014 in Monrovia, Liberia.
The Ebola outbreak claiming lives in West Africa is also hurting the economies of Sierra Leone, Guinea and Liberia and the harm is micro and macro in scope.
It starts small. But it quickly adds up: the World Bank Group has pledged as much as $200 million in aid.
“Shop vendors, stalls that are the basis of the economy for ordinary people in these countries, are affected by curfews, night-time closings,” says J. Peter Pham, who directs the Africa Center at the Atlantic Council.
Add in border closings and flight cancellations. Tourism halts. Contractors with the mining company ArcelorMittal declared force majeure — an act of God — and left Liberia, though other operations continued.
Manufacturing has slowed, says Charles Laurie, head of the Africa practice for the global risk consultancy Maplecroft. He says workers are reluctant to “participate in jobs where large numbers of people are collecting at any one given time.”
An initial World Bank-IMF projection said Guinea could lose a full percentage point of GDP growth. Laurie says the region’s poverty means it’s heavily reliant on international aid organizations to shore up health infrastructure.
Governments are also selling bonds. Sierra Leone recently auctioned about $20 million in T-bills to help fund its Ebola fight.
“These countries are extremely poor,” Laurie says, “so borrowing money is not much of a long term solution.”
Short-term solution as it is, he expects more borrowing to follow.