Ebola combat: Not just a fight against a disease but for the economic survival of a nation

The approximation of deaths by deadly disease Ebola in West Africa now stands at a staggering toll of around 5,000. The outbreak has caused mass hysteria all around the world, for the danger it carries for human lives and livelihoods.
Ebola has been the most trending concern on social media and otherwise. Nevertheless, little does the distress focus on the most intimidating threat it has brought forth--a major economic crisis.
The World Bank report for the year 2014 published alarming consequences of the Ebola epidemic. The findings have it that if the virus continued to perpetuate at its current rate in the three most affected countries-- Guinea,  Liberia and Sierra Leone--its economic impact would bring about a catastrophic aggravation eightfold. The consequences are predicted to permanently damage every last spine holding their economies together.
However, beyond all factors, it has been stated that the costs incurred on this score can at least be alleviated if rapid national and international responses succeed in containing the epidemic and thus limiting "aversion behavior" - a fear factor resulting from people's concerns about contagion, fueling the economic impact.
Using a method based on sector decomposition, the short-term (2014) impact on output is estimated to be in the order of 2.1 percentage points (pp) of GDP in Guinea (reducing growth from 4.5 percent to 2.4 percent); 3.4 pp of GDP in Liberia (reducing growth from 5.9 percent to 2.5 percent) and 3.3 pp of GDP in Sierra Leone (reducing growth from 11.3 percent to 8.0 percent). This forgone output corresponds to US$359 million in 2014 prices.
The short-term fiscal impacts are also large: US$93 million (4.7 percent of GDP) for Liberia, US$79 million (1.8 percent of GDP for Sierra Leone) and US$120 million (1.8 percent of GDP) for Guinea.
These estimates are best-viewed as lower-bounds. Slow containment scenarios would almost certainly lead to even greater financing gaps in 2015.
BROAD CHANNELS OF SHORT-TERM IMPACT
The fiscal impacts on the three countries are evidently illustrated by the figures above.
Inflation and food prices were initially at bay, which, however, is no longer the situation because of severe shortages, panic buying and speculations. The exchange-rate volatility has augmented in all the three affected countries, particularly since June, fueled by uncertainty and some capital flight.
The analysis primarily found information on the fundamental reasons for the economic impact. The crisis has been found to be a direct outcome of aversion behavior driven by fear of contagion, rather than direct costs such as mortality, morbidity, care-giving and the associated losses to working days.
It is obvious that the scourge is no longer a West-African problem but a global emergency. The US and the UK are especially playing an active role through committing military forces to help mitigate its physical consequence. The international organizations, on the other hand, are simultaneously increasing fund and resources across the three affected countries.
Ebola has consolidated several ramifications far beyond public health and has thus been raised at the top of priorities by the IMF and World Bank. In reality, the tragedy of Ebola does not only limit within uncountable grieving families across the Mano River Union but also poses an impending economic catastrophe that is predicted to affect a generation.
The three West-African countries had flimsy economies even before the misfortune struck. Liberia was only trying to stand back up with whatever remained of it after the 11 years of civil war. Similarly, Sierra Leone suffered a long-lasting civil conflict, hindering its economic activities, let alone an economic growth. However, there were positive prospects for Liberia that promised a fiscal bloom.
For instance, Liberia had a projected fiscal growth of 5.9% the year Ebola struck, with an increasing percentage of foreign investments. With major infrastructure projects on processing, Ebola had put a stop to almost every developmental aspect of the country. Starting from the halting of mining operations, missing harvests, suffocated regional trade and losing out of foreign investors, the only projection left for Liberia is now a recession.
Statistically speaking, the World Bank has an estimated figure of $36.2 billion loss in the West-African economies, if Ebola cannot be brought under control in time.
The killer virus has not only changed lives of thousands of families but is also giving rise to a dramatic turn for existence of the countries themselves. The epidemic has nothing but paralyzed the West-African economy, inevitably leading to widening budget deficits and curtailing of critical public investment projects. The estimated budget deficit has gone as high as $130 million. It is crucial that the international financial institutions continue investing in vital health infrastructure and support other institutions that keep the fundamental services together.
As for Sierra Leone, the government had proclaimed a three-day countrywide shutdown, solely for the purpose of taking a strong stand in the country's post-conflict history. In order to carry on the nationwide programme, the government committed to employ US $ 1.6 million and deploy 21,000 youths to engage in door-to-door sensitization.
The government's immediate financial requirement for fighting the epidemic is an estimated amount of US $ 45 million, which happens to be three times their annual health budget. The estimate, however, is subjected to a further upward climb due to the unrelenting spread of the Ebola Viral Disease (EVD).
The full scenario depicting the impact of Ebola on the real economy remains beyond statistical estimations. Some notable changes, however, include the reduction of inflation from 12% to 6.5% for the first time in five years, mainly due to a rapidly-adapted monetary policy and increased food supplies. Nevertheless, the figure is again rising up to 8%, possibly more, due to unmet food demands previously unforeseen by the IMF. The IMF has however published an estimated GDP drop of Sierra Leone by a solid 3.3% from non-iron-ore components, thus dragging the country's total GDP from 11.3% to 8%.
The economy has also seen drastic failures in the entertainment industry and brewery companies. The revenue reduction solely from the beer company has been as high as $18 million. The epidemic has not failed to uproot the rebounded tourism industry of the country, consequently damaging the country's potential economic tools.
The World Health Organization (WHO) attempted to alleviate the economic backlash by reassuring no general ban on international travel or trade. The rules, however, did not change the reality.  The tourism industry failed miserably with half-empty planes landing within the borders. The hotels remained empty, thus forcing the administrative figures to lay off workers.
Agriculture, the country's most valued GDP contributor, could not flourish due to all the impending threats. The plague hit the poorest hardest.
Guinea, on the other hand, had its projected GDP growth decreased from 4.5% to 2.4%. The major economic blows went over its agriculture and service sector due to the epidemic. Projected agricultural growth has also been revised from 5.7% to a mere 3.3%. Agriculture in Ebola-affected areas has been hit by an exodus of people from these zones, affecting key export commodities such as cocoa and palm oil. Coffee production has also been reduced by half, cocoa production by a third, whereas palm oil production has fallen by a solid 75%.
Furthermore, local water production has also gone down by 29% - painting the devastating picture existent in Guinea trade under the current circumstances. Services in total have gone down from 6.7% to 3.8% due to the exceedingly deploring economies of the mining, transport and tourism sector.
The economic devastation done by Ebola has not been confined within the three affected countries only. The ripple effect has proceeded to neighboring countries like Nigeria and Senegal. The sealing of borders has halted cross-border trade, thus creating disturbance in a trade channel established years ago.
The costs incurred due to EVD are not only paid by lives, but by existence of nations. It has shattered the economic ground of the affected countries, along with their associates. Ebola epidemic is not merely destroying health, but lives, too. An effective remedy brooks no delay after all these perils and prognoses.
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The writer can be reached at: [email protected]