The Economic Impact of Ebola – October 2014 Report

Uncertainty about the exchange rate, restrictions on shipping routes, reduced activity by informal traders fearing infection from Ebola and the cordon imposed around Kenema and Kailahun has the potential to interrupt the trade of basic commodities across the country. We therefore collected data on food availability, prices, and number of traders in 153 markets throughout Sierra Leone (with the exception of Western Area Urban) in the week of 19-27 August 2014. Note that these are prices in the markets only. Many communities rely on traders taking the food to villages and therefore these prices do not necessarily equal the prices that households would pay in locations without markets. We conducted a second round of market surveys and included questions on petrol prices, the closure of markets, and food prices in Freetown markets during 11-16 September, 2014. This round was conducted before the shutdown between September 19th and 21st. Anecdotal evidence suggests that prices may have changed a lot after September 21st.  We are therefore conducting a third round of the pricing survey, starting on September 30th and will report on that as soon as the data is available.

The second round in September covered 157 markets of which 25 were in Western Area Urban. We compare these prices with those in August and September 2012. In addition, we compare the cordon districts (Kailahun and Kenema) to the non-cordon districts to look at whether the cordon is impacting food and petrol availability and prices. We do not have data from Western Area Urban markets in 2012 so we show these separately and compare them to other regions and not over time. We find that:

  • With over 20% of markets now reporting that the rice harvest has started (up from 8% in August), it is possible to examine prices of domestic rice. For much of the country prices are similar to prices in 2012. Indeed, prices of domestic rice are actually lower in cordon areas than they were in 2012, underlining the importance of not flooding the markets in these districts with too much rice. As discussed below, the key is to ensure good distribution of rice.
  • The number of traders of local rice is lower, by about 40%, compared to this time in 2012 in cordon districts. If this translates into fewer traders purchasing rice from farmers this could negatively affect farmers’ incomes. Trading of local rice does not (yet) seem to have been adversely impacted in other parts of the country.
  • We do not yet have data for traders of cash crops, however, the lower numbers of local rice traders in cordon areas raise concerns about the ability of farmers in Kailahun and Kenema to sell their cocoa and coffee.
  • While on average rice, gari and palm oil prices are similar to previous years there are a handful of markets, especially in Kailahun that are showing price spikes for imported and domestic rice and it will be important to ensure that these markets receive inflows of imported rice.
  • 17 markets out of 157 contacted in September are reported to be closed, including because of Ebola. For the most part in these markets traders continue to sell produce from their homes.
  • Petrol prices are similar in cordon and non-cordon areas suggesting the government’s efforts to bring in key commodities into the cordon areas are continuing to be successful.
  • Rainfall has been higher in the summer months in 2014 than in typical years suggesting that rice should have grown well. However, we do not know the extent to which the harvest itself has been disrupted by the ebola outbreak