West Africa is a poor region, struggling to improve its economic growth.
It had been succeeding. Last year, Sierra Leone and Liberia ranked second and sixth among countries with the highest growth in gross domestic product in the world.
But this year, growth has stopped because of the spread of the deadly Ebola virus. On Wednesday, the World Bank released a report saying the epidemic’s economic cost could reach $32.6 billion by the end of 2015 if the outbreak spreads.
In such poor countries — the combined 2013 gross domestic product of the two nations and similarly hard-hit Guinea was about $15 billion — that’s an astounding amount of money.
The grim scenario is based on economists’ estimates of costs, and it assumes that containment efforts will move slowly, allowing the disease to spread from the hardest-hit three nations into neighboring countries, including Ivory Coast, Nigeria and Senegal. World Bank officials are hoping that “slow” scenario won’t come true.
“With Ebola’s potential to inflict massive economic costs on Guinea, Liberia and Sierra Leone and on the rest of their neighbors in West Africa, the international community must find ways to get past logistical roadblocks and bring in more doctors and trained medical staff, more hospital beds and more health and development support to help stop Ebola in its tracks,” World Bank President Jim Yong Kim said in a statement.
The World Bank study says that no matter what happens in coming months, Ebola already is having a huge economic impact. Right now, it is killing workers and causing “higher fiscal deficits; rising prices; lower real household incomes and greater poverty.”
Over time, the disease will have indirect consequences as people change their behaviors, according to the report. When countries get hit with widespread fear of contagion, people become afraid to meet or even show up for work. That, in turn, “closes places of employment, disrupts transportation, motivates some governments to close land borders … and motivates private decision-makers to disrupt trade, travel and commerce by canceling scheduled commercial flights and reduction in shipping and cargo service.”
This week, the World Bank and International Monetary Fund are trying to call attention to the huge costs of Ebola. The organizations are holding their annual fall meetings in Washington. On Thursday morning, a news conference will feature the presidents of Liberia and Sierra Leone as well as the heads of the CDC, the World Bank, IMF, the United Nations.
Estimates of Ebola’s potential economic damage come on top of Tuesday’s release of the World Bank and IMF’s assessment of annual global growth. The report noted that factors such as disease, debt, war and terrorist attacks are slowing global economic expansion. The forecast for this year’s average global growth slid to 3.3 percent, down 0.4 percentage point from April.