Effects of Ebola in West Africa and Ghana

Living in West Africa, one cannot help but think about the effects of ebola on our part of the world. Clearly the effects on Liberia, Sierra Leone and Guinea which have been directly affected are enormous, but Ghana and other West African countries have been affected – economically – as well. 

This article put forward by the Nordic Africa institute focus on the effects for Liberia. They say:

“The economies of Liberia, Sierra Leone and Guinea have already been hit hard by Ebola. A major question is whether the negative effects will be temporary or more persistent, according to Eriksson Skoog. The World Bank has lowered its economic growth forecast for Liberia this year, from 5.9 percent to 2.5 percent as a result of Ebola. The budget deficit is expected to grow from 7.1 percent to 11.8 percent of GDP. The economic impact could become much worse if Ebola is not quickly tamed.

The World Bank distinguishes between two types of economic effects from Ebola. On the one hand, there are the direct and indirect costs for healthcare and production loss. On the other hand, there are the behavioral effects due to fear of contagion. People avoid crowds, workplaces shut down and travel and trade are disrupted. The effects caused by aversion behavior are by far the greatest. Hence it is important to address fear as quickly as possible in order to mitigate aversion behavior and normalize business activity.

The article also discusses problems with aid, for instance donations of rice disrupts the local rice market.

The American CBS Economics of Ebola article was also an interesting read. It says:

“Looking good today does not make people feel confident that they will be sitting pretty in two weeks,” said Stephen Morrison, a senior vice president at the Center for Strategic and International Studies (CSIS) and director of its Global Health Policy Center, in an interview. But “While they are vulnerable … [Ghana and Ivory Coast] have the basics of a functional public health system, which was absent in these other countries. That doesn’t mean that they couldn’t be overrun with an influx of cases.”

Ghana, a country of more than 25 million, shares a border with Ivory Coast. It is also where the U.N. has decided to base its mission to respond to the Ebola epidemic. Washington has provided $1.7 million to the Ghanaian government for Ebola preparedness and response planning. Officials in Ghana, who have made gains in poverty reduction in recent years, have lamented that fears about Ebola have hurt their country’s tourism industry. Fear of the disease is something that economists will continue to monitor.”

Except for the Business&Financial Times story linked to above, I haven’t read too much about the effects on tourism in the region (this article suggests however the sector in Ghana is “collapsing” and the B&FT lamenting story ironically reports a World Tourism Organisation (WTO) conference, “Branding for Africa and Africa’s Image”, which had been scheduled to be come off in Accra from September 9-11, was postponed), but know from my interaction with Swedes that the trip I took home is not on anybody’s wish list – although Ghana has not even been affected by Ebola! That “aversion behaviour” is likely killing many livelihoods in all West African countries.