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With more than 1 400 reported deaths from Ebola in West Africa, the virus continues to be an urgent health crisis, but it is also having a devastating impact on the economies of Guinea, Liberia and Sierra Leone, reports BBC News. The world’s largest steelmaker, ArcelorMittal, has seen work disrupted on its iron ore mine expansion project in Yekepa, Liberia, after contractors declared force majeure and moved people out of the country. Simandou, in the forests of eastern Guinea, is Africa’s largest iron ore mine and infrastructure project. A smaller British company, London Mining, has moved out some of its non-essential expatriate staff from Sierra Leone, where mining has accounted for much of the country’s recent growth.
Also, commercial banks in Sierra Leone have reduced their hours of business by two hours to reduce contact with clients and the country’s tourism industry has taken a severe knock – some hotels are empty and are laying off staff.
Meanwhile, the report says, some international investors are nervously watching the Ebola outbreak unfold. Dianna Games, CEO of Africa@Work, says fears about the virus could damage Africa’s economic revival of recent years.
Matt Robinson, senior credit officer at Moody’s rating agency, said in a Fin24 report that the shutting down of schools, borders and government services in the worst-affected countries of Guinea, Liberia and Sierra Leone could have a ‘‘significant’’ financial impact on already impoverished nations. Moody’s warned that a serious outbreak in Lagos, Africa’s most populous city, could cause severe disruptions to the oil and gas industry as international companies evacuate staff and local operations are shut down – translating into ‘‘economic and fiscal deterioration’’.
Mining, agricultural and energy companies are bearing the brunt of the pandemic, says a Business Insurance report.
‘‘From a corporate risk management perspective, the issue is usually how to reduce illness and avoid business disruption,’’ said Daniel Ryan at Swiss Re. John Rose, COO of risk management information and consulting firm iJET International, said travel and logistical networks are particularly sensitive to disruption by a pandemic.
Kimberly Hale, a senior consultant at Marsh Risk Consulting, said: ‘‘Companies need to keep in mind that if they are sending people to affected regions, borders can close at the drop of a hat.’’
Commodity companies are slowing production and airlines are shutting routes. According to Business Report, Nigerian cement magnate Aliko Dangote has pulled some employees out of his Liberian cement plant and says one percentage point may be shaved off the economic growth rate of the region.
Edmond Saidu, the district agriculture officer in Kailahun District, said the disease had killed farmers on cocoa and peanut plantations and rice farms, leaving the crops to rot. Said political analyst Lansana Gberie: ‘‘There’s also a disabling psychological atmosphere that is not conducive to productivity.’’
London Mining CEO Graeme Hossie said the Ebola outbreak was starting to affect the company’s operations.
‘‘We are starting to see, because of things like travel restrictions and more difficulties with supply chains, some areas that will prevent us from being fully effective,’’ Hossie is quoted in Fin24 as saying.
It’s hitting everyone from governments to grocers. Liberia estimates the disease cost $12m between April and June alone. And, says a CNTV report, Guinea predicts the crisis will shave 1% off its growth – at least half a billion dollars of output. And as blockades limit supplies, food and medicine prices are shooting up.
Dual-listed iron-ore developer Tawana Resources has temporarily suspended all its non-essential field activities in Liberia. Tawana is, however, quoted in Engineering News as saying that while the current drilling programme at its Mofe Creek project had been temporarily suspended, all other activities associated with the project’s pre-feasibility study which did not require direct field presence would continue in Liberia and Australia. All non-essential local staff, contractors and expatriate staff would return to their homes, the miner said.
Mobile Network operator MTN says it has put interventions in place to help staff and their families in West Africa battling an Ebola outbreak. Eyewitness News reports MTN says offices are being thoroughly cleaned and protective equipment and clothing are being issued to staff. Some employees are also being allowed to work from home. MTN says it has also established a crisis call centre in collaboration with the Liberian government to help minimise the impact of the disease.
Inevitably the economies of Guinea, Sierra Leone and Liberia are facing tough challenges. But, says an ECNS report, more worrisome for economists and investors is the size of the economic impact if a truly large-scale epidemic breaks out in Africa’s most populous country, Nigeria. Prospects for long-term investment are stable, but the epidemic may cause short-term uncertainty, according to Chinese entrepreneurs in Nigeria.
African countries have tightened travel curbs, ignoring World Health Organisation (WHO) warnings that such measures could heighten shortages of food and basic supplies in affected areas. A Business Insider report notes that the WHO has repeatedly said that it does not recommend travel or trade restrictions for the four countries affected by Ebola and has warned that they are starting to suffer shortages of fuel, food and basic supplies due to these measures.
Still, Chad’s Prime Minister Kalzeubet Payimi Deubet said his country would close its border with Nigeria to prevent Ebola entering the country. ‘‘This decision will have an economic impact on the region, but it is imperative for public health needs,’’ he said. The precautions follow measures from commercial airlines such as Kenya Airways and Gambia Bird which have suspended flights to affected countries, despite new testing procedures at airports.
Bisected by the Equator, Africa is the most tropical of continents, exposing hundreds of millions of its people to conditions conducive to the spread of pandemic diseases like malaria, reports Reuters. ‘‘Africa is not a healthy continent,’’ audit, tax and advisory group KPMG noted in a 2012 report. Spending by African governments on health has often been overshadowed by other perceived priorities, such as big-ticket (hard) infrastructure projects linked to economic growth ambitions. Simon Freemantle, a political economist at Standard Bank, said if the Ebola emergency could draw attention to the need to also fund ‘‘soft’’ social infrastructure – health and education – this would be a ‘‘positive takeaway’’. Even modest increases in health spending would go a long way towards improving African health indicators, including tackling outbreaks of haemorrhagic diseases like Ebola.
Beyond the threat of Ebola itself, experts warn that there has been a broader collapse of the public health system particularly Liberia, where deaths are rising most rapidly and with the highest death toll, resulting in a range of life-threatening illnesses and conditions that are being left untreated. The New York Times reports that many hospitals closed after health workers died, and the facilities that remain open have become overwhelmed.
Dr Joanne Liu, the president of Doctors Without Borders, said: ‘‘People don’t have access to basic health care, including malaria treatment for children, medical care for pregnant women and other common but essential needs.
“All the health care facilities are basically closed in Monrovia,” she added.
The African Development Bank Group (AfDB) has announced that it has approved a $60m grant investment as part of a $210m package for immediate implementation to help strengthen West Africa’s public health systems. The AfDB described the crisis as a wake-up call for the international community saying that this tragedy could have been prevented if investments were directed towards building stronger health systems. The proposed project critically seeks to respond to the specific needs identified by the expert community in response to this category 3 world emergency epidemic. – BBC
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