The worst outbreak of the deadly Ebola virus has not only claimed over 2,000 lives in Liberia, Sierra Leone and Guinea, it is devastating societies and economies. The impact of the disease is also being felt in countries which have so far avoided it and is taking a heavy toll on the economies of other West African countries. Eric Kwame Amesimeku reports from Accra on the impact of Ebola on the Ghanaian economy.
So far, the disease has claimed over 2,000 lives in Liberia, Sierra Leone and Guinea, and still counting. For a disease that spreads through contact, its impacts have transcended the boundaries of health and is now smarting the economies of these countries to the extent that, growth prospects of their various economies are in serious jeopardy.
Estimates from the African Development Bank (AfDB) indicate that the economic impact of the Ebola scourge on the economies of West African countries would not be anything less than 4% of the GDP of these countries.
Donald Kaberuka, the head of the AfDB, on recent visit to Sierra Leone lamented the devastating impacts of the Ebola outbreak saying, “Revenues are down, foreign exchange levels are down, markets are not functioning, airlines are not coming in, projects are being cancelled, business people have left – that is very, very damaging.”
West Africa is a hugely inter-connected region. When one country in the region coughs, the others easily catch cold, in this case, almost literally
From foreign investors shunning the region to the cancellation of flights effectively shutting the affected countries off the world, one needs not wait till the end of the fiscal year or to such a time when the disease has been successfully contained to measure the impacts of it.
Indeed, managers of the economies of the three worst-affected countries have begun counting their losses: Sierra Leone says it would not be able to export around $200m worth of its diamonds and Liberia is realising its worst fears – its economy is in recession.
The impact on Africa’s biggest economy, Nigeria, is proportional to its size – Nigeria it is estimated, will lose to over $3bn due to the outbreak of the disease in the country. The Nigeria government has largely managed to contain the disease from spreading and, currently, there are just a handful of people infected with the disease whilst authorities have banned flights from the worst-affected countries to prevent further spreads.
What does fate have in store for Ghana?
West Africa is a hugely inter-connected region with most of the inhabitants sharing common cultural norms and practices. Thanks to some statutes within the Economic Community of West African States (ECOWAS) there is largely free and unimpeded movement of people and goods across the porous borders in the sub-region. Thus, when one country in the region coughs, the others easily catch cold, in this case, almost literally.
In view of this, countries within the region like Ghana and Côte d’Ivoire, which have largely been spared the disease so far, have, however, not been spared the economic impacts of the disease. In the case of Ghana, badly needed investments have been cut as investors keep away, fearful for their lives and investments.
A similar fate has befallen the tourism sector, which has consistently been among the five biggest foreign exchange earners for the country.
Hotels and guest houses, which would have doing pretty well around this time of the year, are reporting massive drops in their occupancy rates. Even international conferences scheduled to take place in the country have had to be postponed against the Ghana government’s directive that no international gathering takes place in the country for the three months leading up to December 2014.