WASHINGTON, DC - The economic impact of the Ebola outbreak on West Africa may kill more people than the virus itself, according to a report by the Financial Times, while the International Monetary Fund has announced that affected countries could need emergency assistance.
As the Ebola outbreak has spread, airlines have cancelled flights to the countries most effected, particularly Sierra Leone, Liberia and Guinea, while border posts have been closed, foreign workers have been evacuated and local trade has stagnated, driving up costs of staple goods.
As a result, growth rates are expected to be badly impacted for the three worst affected countries, with the IMF warning that a full percentage of economic growth for this year is likely to be wiped from Guinea's economy.
On top of this, Guinea, Liberia and Sierra Leone have all been forced to dramatically expand their national deficits as they fight the spread of the disease and the downturn in trade and tax revenues will hit national treasuries hard.
All three countries already rely on IMF economic assistance. Sierra Leone receives US $96-million, while Guinea relies on a US $200-million loan, and Liberia on a US $80-million one. The IMF has indicated that it is considering expanding its assistance to all three countries.
"What is already clear at this stage is that growth is likely to slow sharply," said Gerry Rice, an IMF spokesman. "Significant financing needs are likely to rise."
The underdeveloped structure of West African economies has left them particularly vulnerable to the economic impact of the Ebola virus. The trade of goods relies on the movement of people, which has been restricted by border closures and local containment efforts, such as Sierra Leone's recently announced three-day nationwide lockdown.
In Sierra Leone and Liberia, agriculture accounts for some 40% of the economic output in and 25% in Guinea. The sector has taken a significant hit due to Ebola as farmers have been forced to leave the fields and can't trade across borders because many have closed, according to Manji Cheto, vice president at the New York-based Teneo Intelligence consultancy.
As a result, there are expected to be widespread job losses in this sector, which in Sierra Leone alone employs around 70% of the workforce. The fall in output and supply of goods is also driving up the cost of staple foods.
The United Nations this week warned that in Monrovia, the capital of Liberia, the price of cassava, a staple starch, had increased 150%. If costs of staple foods continue to increase, there will be widespread food shortages, the UN has said, leading to malnutrition for populations that already have a majority living below the poverty line.