After nearly 3,000 confirmed deaths and with the possibility that between 550,000 and 1.4 million people could be infected by early next year, the current Ebola epidemic has severely undermined the West African economies of Guinea, Liberia, and Sierra Leone. While the economic loss related to the outbreak is incomparable to the tragic human loss, serious concerns are mounting about the growing economic toll of Ebola on the three countries.
Before the Ebola outbreak, the economies of Sierra Leone and Liberia had been steadily improving following long years of civil war. According to the 2014 Index of Economic Freedom, a global economic policy guidebook published annually by The Heritage Foundation and The Wall Street Journal, the two post-conflict nations improved in the rankings of economic freedom and moved out of the economic freedom classification of “repressed.” Undergoing political unrest over the past decade marked by military coups, Guinea’s progress toward greater economic freedom had been uneven but charted upward over the past two years.
Wiping out much of the economic progress made over the past years, unfortunately, Ebola’s spread may well be “catastrophic” to these countries as warned by the World Bank. Beyond the immediate economic cost to contain the epidemic, there are serious indirect and long-term economic consequences, including “forgone output; higher fiscal deficits; rising prices; lower real household incomes and worsening poverty.”
Growth estimates for Guinea have been halved from 4.5 percent to 2.4 percent. The country has already experienced an exodus of farm workers, critical to key products such as cocoa and palm oil. For Sierra Leone, a country often cited as one of the fastest growing economies in Africa with an annual growth rate of over 11 percent, the projected economic growth has dropped to just 8 percent in 2014 and zero in 2015. The country has experienced a substantial slow-down in critical mining operations.
In the hardest hit country of all, Liberia, the World Bank revised its 2014 growth projection from 5.9 percent to 2.5 percent. The bank reports that the country could experience a negative growth rate in 2015. Accelerating the economic downturn, Liberia’s two largest mining companies have already suspended operations as a result of the outbreak.
Unquestionably, the outbreak needs to be halted to ensure that no additional lives are lost first and foremost. However, the pace at which Ebola has subsumed the region is alarming, and even more concerning is how the three most affected countries will pull themselves out of the economic downturn caused by the ongoing Ebola epidemic.
As Jim Yong Kim, President of the World Bank, and Harvard University professor Paul Farmer pointed out in their joint op-ed:
We are at a dangerous moment in these three West African countries, all fragile states that have had strong economic growth in recent years after decades of wars and poor governance. It would be scandalous to let this crisis escalate further when we have the knowledge, tools and resources to stop it. Tens of thousands of lives, the future of the region and hard-won economic and health gains for millions hang in the balance.
No doubt that swift response to infectious disease at the scale of the current Ebola outbreak must be taken far more seriously than in the past. The tardy and paltry response to Ebola both in Africa and the West is no longer acceptable.