Day 3: Country Session – The Economic Implications of Ebola

The Economics Implications of Ebola was opened by Herbert M’cleod (IGC-Sierra Leone Country Director) who outlined the transmission mechanisms and social impacts of Ebola in Sierra Leone. His presentation explained large impacts on tourism and hotel sectors, slowdowns in regional and broader international trade and investment flows, and the long-run effects on revenues and public budgeting. He ended with a call for optimism and increased efforts towards data collection, as well as a comprehensive rescue package.

He was followed by the Honourable Minister Axel Addy (Minister of Commerce and Industry in Liberia) who spoke on The Potential Impact of the Ebola Outbreak on the Liberian Economy and Government’s Planned Policy Interventions. He emphasised the key issues of the speed of transmission, particularly relative to response efforts, the impact on agricultural production and commodity prices, and the slowdown in key export and services sectors. The current projection for macroeconomic loss is $359 million. Complicating the situation is Liberia’s dual currency regime, and the inflation pressure in critical import transactions. Government responses include mandatory leave for nonessential public employees and the establishment of a $5 million trust fund, which will be allocated towards community based intervention, health centres, and ensuring nutrition for ebola’s victims. The post-Ebola recovery strategy includes plans to rehabilitate hydro-power, cash-for-work programmes, and conditional cash transfer programmes for affected households.

Rachel Glennerster, (Lead Academic in IGC-Sierra Leone) presented on ebola’s microeconomic impacts in Sierra Leone, emphasising effects on income and food security, as well as the additional effect of the region’s hungry-, or rainy season. She highlighted the impact of essential restrictions on social activities on economic output. An existing IGC project monitoring food prices and traded has allowed the IGC Sierra Leone team to find that imported rice in August and September has not changed dramatically from previous years. They found somewhat lower prices for domestic rice across cordoned districts in Sierra Leone, suggesting the possibility that food aid could be crowding domestic markets. She concluded by suggesting that the government should identify and target areas displaying price spikes and delivering food aid accordingly.

The panel concluded with a presentation by Dr. Jonas Hjort (Lead Academic for IGC-Liberia) which described responses from a phone based survey on business activities in Monrovia, Lofa, Margibi, Bomi, and Bong, compared to activities in less affected counties and compared to activities in the previous year. They found that 8% of the sample firms had gone out of business, although no causation can be interpreted at this time. The analysis found negative estimated effects on the automotive and construction sectors in Monrovia for both male and female full and part-time labour, while sales and construction saw losses of $23,000 and $44,000, respectively in Monrovia (compared to 2012 figures).

By Anne Laski, Country Economist, IGC Tanzania