If the Ebola virus continues to surge in the three worst-affected countries – Guinea, Liberia, and Sierra Leone – its economic impact could grow eight-fold, dealing a potentially catastrophic blow to the already fragile states. This clear and shivering warning comes from a World Bank Group analysis released this week, and is yet another reminder of the urgency to prevent it from spreading further.
However, the international agency says that the economic costs can be limited “if swift national and international responses succeed in containing the epidemic and mitigating ‘aversion behavior’ – a fear factor resulting from peoples’ concerns about contagion, which is fueling the economic impact.”
Estimates of impacts on output individually and in aggregate
The analysis used two alternative scenarios to estimate the medium-term impact of the epidemic to the end of calendar year 2015. A “Low Ebola” scenario envisions rapid containment within the three core countries, while “High Ebola” corresponds to the upper ranges of current epidemiological estimates.
The need for a concerted international response is evident. External financing is arriving yet slowly, much more is needed. The World Bank analysis describes four related activities such a response should include:
- Humanitarian support: Such as desperately needed personal protective equipment and hazard pay for health workers, emergency treatment units, standardized and universally applied protocols for care, etc.
- Fiscal support: The fiscal gap, just for 2014, is estimated at around $290 million. Increased injections of external support can strengthen growth in these fragile economies.
- Screening facilities at airports and seaports: Policies are required that will enable the flow of relief and encourage commercial exchange with the affected countries.
- Strengthening the surveillance, detection, and treatment capacity of African health systems: Weak health sectors in Africa are a threat not only to their own citizens but also to their trading partners and the world at large. The enormous economic cost of the current outbreak could be avoided by prudent ongoing investment in health system strengthening.