Africa’s Plight, The World’s Opportunity

AfricaOur world has become both increasingly smaller and more connected in recent decades. Problems that previously were defined exclusively in national terms now have major international consequences, particularly economic ones. It has been estimated that the 2003 SARS (severe acute respiratory syndrome) outbreak that infected upwards of 10,000 people internationally had a “global macroeconomic impact… at US$30-100 billion, or around US$3-10 million per case (Smith 2006, p. 3114).” Such numbers demand a corresponding measure of attention to the intervention and prevention of future infectious global outbreaks. In this paper, I will discuss some of the economic impacts of the recent West African Ebola outbreak that has claimed almost 5,000 lives in Guinea, Liberia, and Sierra Leone. I will begin with a brief overview of general economic outcomes that have resulted directly from this current epidemic. I will then discuss how current development issues in the West African region both enabled and exacerbated these macroeconomic challenges. Finally, I will introduce two long-term concerns as they relate both to the continent of Africa itself and the entire world at large.

In addition to the incalculable loss of human life, there have been a number of economic concerns that have arisen in West Africa from this recent Ebola outbreak. I begin with the issue of food shortages. Bukar Tijani, FAO regional representative for Africa, warns, “With the main harvest now at risk and trade and movements of goods severely restricted, food insecurity is poised to intensify in the weeks and months to come (African Research Bulletin 2014).” Two issues complicating this increasing concern are the quarantines restricting movement between and within countries and the individual perceptions of risk of contamination. In the first case, national governments, in an attempt to limit the spread of the disease, have closed their borders and restricted movement within their countries. Such preventive measures often have the undesired outcome of restricting trade and the availability of necessary commodities. As a result, already precious and limited resources like food become scarce goods. Complicating this situation is the impact of perceived risk of infection among local farmers. Sierra Leone’s Agriculture Minister Joseph Sam Sesay explains, “”We are… talking about farms being abandoned by people running away from the epicenters and going to areas that don’t have the disease (Hamilton 2014).” These two factors have combined to limit supply in an already impoverished area. The result has been “panic buying, food shortages, and severe price hikes (African Research Bulletin 2014).” Without direct intervention, this situation will only intensify as personal income continues to decline and the price of daily necessities continues to increase.

The economic impact of the Ebola outbreak is also being felt by local businesses and industries. Hamilton states, “In Sierra Leone, commercial banks 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. The closure of borders in West Africa and the suspension of flights are also having a detrimental effect on trade, severely limiting the ability of countries to export and import goods (Hamilton 2014).” The mining industry has been impacted tremendously as many firms have sent their international workers back to their respective homes. The remaining labor force is often hampered by the travel bans. Even service industries such as coffin makers in Liberia have been impacted. Pay-Layleh reports, “These days body bags have replaced caskets as the corpses of Ebola victims are highly contagious and they must be carefully sealed within them before burial or cremation. Funerals – big social events, when friends and family would gather around an open casket, often touching their loved one to bid farewell – are also a thing of the past (Pay-Layleh 2014).” Experts predict that the impact to GDP on a national level will be immense. Guinea, Liberia, and Sierra Leone are all facing annual losses this year in GDP specifically as a result of the Ebola Outbreak. Sierra Leone, at one time predicted by the World Bank to experience an expansion from 13.3% to 14.1%, is currently struggling at almost 7 percent (African Research Bulletin 2014).

Understanding the environment that existed prior to this recent outbreak is a crucial component of formulating a response. Bausch provides an excellent overview, explaining that the combination of “a stalled economy,” “an impoverished and neglected health care facility,” and “inefficient and poorly resourced governments” create the perfect environment for such outbreaks (Bausch 2014, p. 3-4). Development needs within the less-developed countries act as an incubator for the rapid spread of such infectious diseases. In turn, the existing economic fragility within these same countries becomes a vortex of negative consequences and impact. As is so often the case in such situations, the existing infrastructures and institutions are simply not properly equipped, either in terms of resourcing or staffing, to handle these outbreaks. The result is that a disease that could be easily isolated and managed in a more-developed country quickly becomes an epidemic infecting and affecting the entire country and adjoining areas.

It is this very reality that presents the greatest long-term challenge for the continent of Africa. Applying the rationale of “opportunity costs,” we can readily surmise that this current outbreak has the potential to become a self-replicating catastrophe. Prior to the recent outbreak there was a measured expectation of economic growth in the countries of Guinea, Liberia, and Sierra Leone. However, those expected gains have now dematerialized in the face of financial losses and redirected national emphases. Finance Minister Kaifala Marak explains, “The Ebola outbreak has reduced the country’s economy from a projected 11.3% to seven percent as more money is continuously put into the fight (African Research Bulletin 2014).” Monies that could have been used for capital investment, infrastructure improvements, and growth in the health care industry have now by necessity been redirected to survival considerations. The result is that the previously existing socioeconomic factors that first enabled the outbreak are left untouched and the future potential for negative impact remains entrenched. In fact, the previous socioeconomic problems are now exacerbated, actually increasing the likelihood for repeat outbreaks with even greater detrimental impact in terms of both the loss of human life and economic “de-development.” Smith explains it this way when emphasizing the need for preventive preparedness and effective responses in the future, “This includes situations beyond the health sector, such as transportation, immigration, communications, finance, water and sanitation, defense, housing and education (Smith 2006, p. 3119).” Unfortunately, it is the very lack of such necessities that first catalyzed the outbreak for most less-developed countries. The redirection of limited resources and capital gains to the fight for survival, while safeguarding human life in the present, only serves to further weaken those already deficient national needs. The result is a vicious, repetitive cycle of outbreak and negative economic impact.

In closing, I would point to the long-term impact that this current outbreak will have in the global market. In a recent briefing in Geneva, David Nabarro, the man organizing the UN response to the Ebola outbreak, stated, “We requested about $100m on August 8th and now it is $1bn, so our ask has gone up 10 times in a month (African Research Bulletin 2014).” For those more-developed nations, ones in which the threat of an Ebola outbreak is highly unlikely, such large requests seem astronomical. However, measured against the estimated $100bn impact of the 2003 SARS outbreak, such costs are actually marginal. In fact, the trade-off would appear simple. To use the terms of a layman, the world can either “help now or pay later.” An economically healthy and developed Africa only presents greater opportunities for the entire world in the traditional market system. Any present refusal to provide assistance during this critical juncture only ensures that the nations of West Africa will remain entrenched in poverty and deprivation. By refusing to pay now, the world guarantees higher costs in the future in the form of continued capital investments and donations to rebuild the region. Africa has a tremendous plight right now, one with powerful long-term implications for the immediate region, the entire continent, and the world at large. We have an opportunity to not only intervene from a humanitarian standpoint but also to invest from an economic standpoint. In the long-term, today’s financial assistance, if specifically directed to the socioeconomic factors that both enabled and exacerbated this current outbreak, will provide benefits and value to us all.

Works Cited

Bausch D.G. and Schwarz, L. (2014). Outbreak of Ebola Virus in Guinea: Where Ecology Meets Economy. PLoS Neglected Tropical Diseases 8(7): e3056. Doi:10.1371/journal.pntd.0003056.

Hamilton, R. (2014). Ebola crisis: The economic impact. BBC News Business. Retrieved 01 November 2014 from http://www.bbc.co.uk/news/business-28865434 .

Pay-Layleh, J. (2014). Liberia’s coffin makers suffer in Ebola outbreak. BBC News Africa. Retrieved 01 November 2014 from http://www.bbc.co.uk/news/world-africa-29755102 .

Rivers, C. (2014). Modeling the Impact of Interventions on an Epidemic of Ebola in Sierra Leone and Liberia.  Retrieved 01 November 2014 from http://arxiv.org/abs/1409.4607 .

(2014), West Africa: The Economic Impact of the Ebola Crisis. Africa Research Bulletin: Economic, Financial and Technical Series, 51: 20516A–20516C. Doi: 10.1111/j.1467-6346.2014.05969.x