By the Blouin News Business staff

Ebola also hits African economies

by in Africa.

Staff of Qingdao Inspection and Quarantine Bureau do medical inspection to prevent Ebola virus on a cargo ship from epidemic area on August 19, 2014 in Qingdao, Shandong province of China. AFP/Getty Images

Staff of Qingdao Inspection and Quarantine Bureau do medical inspection to prevent Ebola virus on a cargo ship from epidemic area on August 19, 2014 in Qingdao, Shandong province of China. AFP/Getty Images

The largest Ebola outbreak has so far killed some 2,100 people in Guinea, Sierra Leone, Liberia, and Nigeria, and has spread to Senegal. It is also already affecting those national economies, and the continent of Africa as a whole. Some of the visible effects include decreasing trade with the affected countries which leads to higher prices of goods, less tourism, budget problems, and an overall negative desire to work with the nations that are suffering from the the virus disease since its outbreak eight months ago in Guinea. Travel bans have also been imposed to stem the deadly Ebola epidemic.

Meanwhile, 11 big companies operating in the region issued a statement urging the international community for greater support and to step up the fight against the worst outbreak of the disease, marking the strongest co-ordinated business response yet. They say that Ebola threatens the region’s stability, something that is already occurring. “Without the support of the international community, the situation for these economies — many of which are only beginning to return to stability after decades of civil war — will be even more catastrophic,” the group of foreign investors in West Africa (mostly in the mining sector, a key industry for foreign investment in Guinea, Liberia and Sierra Leone) said in a statement. Among the signing chief executives are the leaders of: mining group Randgold Resources; steelmaker ArcelorMittal; Newmont Mining; and Iamgold, from Canada.

The New York Times reported last week:

But many African nations have gone ahead anyway, sealing borders, barring entry to residents of the affected countries and barring their airlines from flying to those countries. Senegal has even refused to allow humanitarian flights with urgently needed supplies and medical personnel to take off from Dakar, the West African hub for international aid agencies. South Africa and Kenya, two of the continent’s economic heavyweights, have restricted entry to people coming from the Ebola zone.

In economic terms, the three countries that are most worrying are the worst-hit nations: Guinea, Liberia and Sierra Leone. The International Monetary Fund has said that it’s likely that these counties will need emergency assistance. “What is already clear at this stage is that growth is likely to slow sharply,” said Gerry Rice, a fund spokesman recently. “Significant financing needs are likely to rise.” Reuters reports that all three countries are already getting IMF loans under the extended credit facility, a longer-term IMF program available for poor countries with protracted balance of payments problems. Guinea has a three-year, $200 million IMF program, Liberia is getting about $80 million over three years, and Sierra Leone has a three-year IMF program of about $96 million.

On Monday the African Union urged countries to lift Ebola related travel bans: “It was agreed that as African member states we should urge all member states to lift all travel bans, so that people can move between countries, and to trade, and to open up the economic activities,” A.U. commission chief Nkosazana Dlamini-Zuma told reporters. “But it was also stressed that whilst the travel ban should be lifted, there should be proper screening mechanisms put in place, both at the countries where citizens will be departing and at the ports of entry, whether it’s airports, or land ports of entry, or sea ports,” she said.

Undeniably, economic growth rates will be affected, yet the medium-term problems are as acute: growing unemployment in the agriculture sector – the backbone of the total workforce in Guinea, Liberia and Sierra Leone, and the price of staple foods increasing by the minute. Vaccinations and therapeutics are currently being tested and some believe that they will be available for use as of November. Until then, the number of those killed by the Ebola virus will continue growing  – and at the same pace the negative economic impact that the disease carries with it.