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Ebola Takes Toll on African Economy

Wall Street Journal (05:09:2014) by Matina Stevie, Nicholas Bariyo and Gbenga Akingbule:
Ebola's economic toll on Africa is starting to emerge.
The flow of goods across many African frontiers, from Congolese copper crossing the Botswana border to used cars driven into Nigeria, is seizing up on fears that traders could be carrying or catch the killer virus. The trade slowdown comes on top of a drop in tourismand the suspension of commercial flights to West African cities as well as Nairobi, a continental hub.

The upshot: An accelerating continental economy has hit a massive speed bump. The International Monetary Fund projected sub-Saharan Africa would grow by 5.4% this year, but it is now warning that Ebola is set to badly hit growth rates in the countries directly affected.

The Ebola outbreak began in Guinea eight months ago and has since spread to Sierra Leone, Liberia and Nigeria. A separate Ebola outbreak has surfaced in the Democratic Republic of Congo.
The World Health Organization has warned that the epidemic is likely to accelerate and more than 20,000 people could be infected. Already, more than 1,900 people have died.
Ebola's economic impact has become so severe that the IMF is now warning that stricken countries could need emergency assistance. Guinea, Liberia and Sierra Leone have all been burning holes in their finances trying to curb the outbreak, and a dramatic downturn in trade—specifically timber and rubber—will compound those troubles.
"What is already clear at this stage is that growth is likely to slow sharply," said Gerry Rice, a fund spokesman. "Significant financing needs are likely to rise."
The World Bank and the IMF said recently that the epidemic would shave a full percentage point off Guinea's growth rate, slowing it to 3.5%.

Sierra Leone's economy was set to grow by a breakneck 13.9% rate in 2014, and Liberia's by 5.9%, the IMF predicted earlier this year. While the fund still hasn't specified how it believes the outbreak will affect those growth rates, the impact is expected to be significant, setting back fragile economies that were beginning to stage convincing economic expansions.

The Washington-based institution is already funding assistance programs to the three West African nations affected by Ebola. Sierra Leone benefits from a roughly $96 million IMF program, while Guinea is drawing on a $200 million loan, and Liberia on an $80 million one. IMF rules allow it to enhance or extend such loan facilities.
Agriculture accounts for some 40% of the economic output in Liberia and Sierra Leone and a quarter in Guinea, and the sector is taking a hit in the three countries as farmers are forced to leave the fields and can't trade across borders because many have closed, according to Manji Cheto, vice president at the New York-based Teneo Intelligence consultancy. What could be worse is the jobs and vital income lost in the sector: In Sierra Leone, for example, about 70% of the workforce is occupied in the broader agricultural sector.

Nigeria, which this year surpassed South Africa as the continent's largest economy, is better positioned to absorb the impact of the Ebola epidemic, which at this point appears confined to two cities, Lagos and Port Harcourt.
Still, Ebola is deterring those who help drive trade with Nigeria. A Nigerian customs official said revenue from import duties of used vehicles has declined drastically. Part of the reason is that increased surveillance for the disease at land borders—including quarantines for those with high fevers—has slowed trade and potential customers to a trickle, the official, who declined to be identified because he wasn't authorized to speak to the media said.

And It isn't just cars. "Many of my customers from neighboring countries have stopped coming," said Yusuf Adamu, an electronics dealer in Nigeria. "When I try to reach out to them on the phone they complain of stringent Ebola screening measures."

Zambia's health ministry said Friday that it was reviewing travel regulations for people entering its borders from Congo, the latest country to be hit by Ebola. Since Aug. 25, Botswana's authorities have blocked the entry of more than 100 trucks carrying copper from Congo.
Traffic along the Rwanda-Congo border has dropped drastically, as travelers stay away due to long screening queues. According toFrançois Kahwerikula, a Congolese customs official at the Goma border crossing, known asGrande Barriere, daily collections have declined by 30% to 40% since Congo announced that it had confirmed the Ebola outbreak.
More than 10,000 people cross the Rwanda-Congo border every day for business, but a Congolese mineral dealer, Siraje Bigirimana, said he is booking a hotel room in Rwanda until the situation is safe. "It's very expensive to operate in such a situation," Mr. Bigirimana said.
Rwandan Health Minister Agness Binagahwo said that Kigali had deployed troops and civilian health workers to ensure that all people going through the borders are screened. All people with a fever of 37.5 degrees Celsius (99.5 degrees Fahrenheit) and above are being turned away at the busy cross points.
"No one passes without being screened," said Ms. Binagwaho said. "There is good coordination and everything is going in fine."

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