Poverty, then war, and now, a deadly plague. Among the world’s poorest states at the bottom of global development indices, Sierra Leone, Liberia and Guinea had shown signs of leaving behind brutal wars and leaping into Africa’s economic boom – before a lethal Ebola epidemic struck.
As the world’s worst outbreak of the disease ravages the populations of these small states from west Africa’s Mano River region, their resource-dependent economies are reeling from the impact.
With the death toll now exceeding 900, Ebola is hitting tourism, reducing travel and trade, and slowing farming and mining, delivering body blows to what had been buoyant gross domestic product (GDP) growth driven by increasing foreign investment, according to officialsd.
“A common feature of these three countries is they’re all fragile states,” Makhtar Diop, the World Bank’s vice-president for Africa, said on a call with reporters. “It means that they’re countries that need more support from the international community in normal times… And this external shock that they are currently facing – this crisis – is taking them even further back,” Diop said.
Liberia’s Finance Minister, Amara Konneh, said the outbreak had already cost his country’s economy $12 million (R129m) between April and June – 2 percent of the national budget – and the disease was still spreading. Liberia would have to revise down its projected GDP growth of 5.9 percent, he said.
“We are scrambling for a response for this crisis… If it is not contained it will have serious consequences for our economy,” Konneh said.
In the ramshackle ocean-front capital Monrovia, still scarred by a civil war that ran from 1989 to 2003, relatives of Ebola victims were dragging bodies into the dirt streets rather than face quarantine enforced by troops.
Sierra Leone’s Foreign Minister, Samura Kamara, said his country could ill afford the costs of fighting the epidemic.
“You have to divert resources. You have to divert energy. So you are slowing down the other aspects of real economic development just to fight a disease that erupted out of nowhere,” he said on a visit to Washington to attend the US-Africa Leaders Summit this week.
An initial impact assessment by the World Bank and the International Monetary Fund (IMF) for Guinea, where the outbreak started in a remote forest region and has killed over 350 people, projects the bauxite exporter’s GDP growth falling from 4.5 percent to 3.5 percent.
The World Bank and African Development Bank have committed $260m to help the three worst-affected countries.
Impact on Nigeria
With two Ebola deaths also reported so far in Nigeria, fears are growing about how the deadly virus, which can kill up to 90 percent of those it infects, could affect Africa’s top oil producer and most populous nation, and the surrounding region.
The World Bank said agriculture had been hit in Guinea, Sierra Leone and Liberia as rural workers fled farming areas in the affected zones, where some Ebola patients had been shunning medical treatment and hiding away in their villages.
Konneh said a slowdown in farming and transport in Liberia and reduced activity at popular markets could push up prices of essential food items and other goods.
“We’re watching inflation. So far it’s not been bad, but we’re worried about the Lofa food belt where people are quarantined and major markets are closed. We expect hoarding by people in urban areas that could drive food prices up,” he said.
In Monrovia, residents said the Ebola emergency, and the fear and suspicion it had generated, was disrupting daily life, affecting everything from street hawking to taxi fares.
“Prices have gone up high. They’re charging us as though we were dressed in suits with neckties. Transportation fare is up now,” Seyon Tweh, a small trader, said.
Due to the fear of contagion from close contact – Ebola is spread by contact with the bodily fluids of infected humans or animals – taxis were now only taking two passengers in the back instead of the previous four, and this had pushed fares up.
Konneh said the government would prevent price-gouging. Some major airlines, such as British Airways and Emirates, had halted flights to affected countries, and expatriates there were fleeing the Ebola risk, government officials said, adding that this reduced consumption and revenues.
“We’ve seen international workers leaving the country in numbers,” Konneh said.
Emmanuel Soussouadouno, a senior official at Guinea’s Finance Ministry, said: “We’re seeing a fall-off in financial receipts due to lower activity at the airport and hotels.”
During overlapping civil wars that lasted more than a decade, Sierra Leone and Liberia were symbols of Africa’s “Hopeless Continent” image, with their diamond riches driving a conflict made notorious by amputations and rapes.
Guinea suffered spillovers of refugees and fighters.
But in the decade since peace was restored, the Mano River states have experienced surging growth propelled by foreign investment in mining, oil exploration and construction. That recovery is now threatened.
“This economic challenge comes at a time when all three countries have been enjoying peace and stability after years of interconnected wars and civil strife,” Konneh said.
Companies respond
Most major foreign companies operating in Guinea, Sierra Leone and Liberia are responding cautiously, reducing staff movements and adopting precautionary health measures.
“Some companies are moving back workers and others have postponed projects to see how the outbreak develops,” Katie Greary, the medical director at travel security risk services company International SOS, said.
The World Bank said that if the evacuation of skilled expatriate staff continued, there would be a “sizable decline in production” from mining operations in the affected region.
The two big iron ore producers in Liberia, ArcelorMittal and China Union, were still operating their mines, Konneh said. “We are trying to ensure we put in place health protocols in mining areas,” he added.
In the Guinean mining town of Siguiri, where an Ebola isolation ward was opened last month to cope with new cases, AngloGold Ashanti said it was taking health measures but there had been no impact on its operations there. In the wider region, mining firms are on alert. Perseus Mining, which has mines in Ghana and Ivory Coast, said it had issued health warnings and barred from its sites anyone coming from Guinea, Sierra Leone or Liberia in the past month.
Canadian Overseas Petroleum, a partner with oil major ExxonMobil in offshore exploration in Liberia, said it was pushing back the start of drilling.
ExxonMobil declined to comment on personnel but said safety was a top priority. “Our Monrovia office remains open,” it said.
Liberian and Sierra Leonean officials appealed to major investors not to abandon their countries because of Ebola. “My message is: ‘Don’t leave the country. Stay with us – let’s fight this together’,” Konneh said. – Reuters