Moody’s warns Ebola virus could damage west Africa economies | Africa in the news Moody’s warns Ebola virus could damage west Africa economies – Africa in the news
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Moody’s warns Ebola virus could damage west Africa economies

By Staff Reporter

An employee of the Monrovia City Corporation mixes disinfectant before spraying it on the streets in a bid to prevent the spread of the deadly Ebola virus, in the city of Monrovia, Liberia, Friday, Aug. 1, 2014. U.S. health officials warned Americans not to travel to the three West African countries hit by the worst recorded Ebola outbreak in history. The travel advisory issued Thursday applies to nonessential travel to Guinea, Liberia and Sierra Leone, where the deadly disease has killed more than 700 people this year. (AP Photo/Abbas Dulleh)©AP

Moody’s Investors Service has warned that “beyond the tragic loss of life” the Ebola virus could wreak “significant” economic and fiscal damage on the west African countries worst affected by the disease.

In a research note released on Thursday, the credit rating agency said it expected “critical commercial and transport disruptions” to last for at least a month as a result of the Ebola outbreak.

Although disruptions to the mining industry in the region were “likely to be temporary”, border crossings were either closed or allowing only limited public and commercial traffic, and regional airlines ASKY and Arik had joined international carriers Emirates and British Airways in suspending flights to Liberia and Sierra Leone. Along with Guinea, the two countries were at the centre of the epidemic.

In a sign of global alarm at the spread of the disease, Korean Airlines has announced it is suspending flights to and from Kenya, in east Africa, which has not recorded any Ebola cases but is one of the main aviation hubs for the continent. This was after Kenyans began complaining on social media about inadequate screening of travellers from west Africa at Jomo Kenyatta airport.

The worst outbreak of Ebola has claimed more than 1,000 lives, the vast majority in Guinea, Sierra Leone and Liberia. It risks having a direct financial effect on stretched government budgets in some of the region’s poorest states, Moody’s said, and could lead to “economic and fiscal deterioration” in the continent’s largest economy, Nigeria, if the disease spreads there.

Ebola West Africa map

Liberia’s minister of finance, Amara Konneh, said projected gross domestic product growth in 2014 would need to be revised down from the 5.9 per cent forecast as a result of the crisis. In Guinea, GDP would fall a percentage point to 3.5 per cent, according to initial International Monetary Fund and World Bank projections. The country on Thursday declared a public health emergency over the epidemic and was sending health workers to all affected border points.

Nigeria, Africa’s most populous nation, has been relatively successful in identifying and tracking down potential carriers of the disease who had direct contact with Patrick Sawyer, a Liberian American who died at a Lagos clinic shortly after travelling to the country from Monrovia this month.

The Nigerian authorities were watching 189 people who either had direct contact with Mr Sawyer or secondary contact with those who were with him before his illness was diagnosed and may be struck.

However, the authorities face a stiff challenge maintaining control over potential victims. A nurse who had close contact with Mr Sawyer before he died skipped quarantine in Lagos and went to her home in the eastern city of Enugu. She made contact there with 20 other people, all of whom were under surveillance, Labaran Maku, information minister, said on Thursday.

A third person has now died of the disease in Nigeria.

Moody’s noted that ArcelorMittal, the steel manufacturer, has halted work on the second phase of an iron ore development in Liberia. Tullow Oil, the UK company, has withdrawn staff from the country, and African Minerals, the largest private sector employer in Sierra Leone, has imposed restrictions on non-essential travel.

“If a significant outbreak emerges in the Nigerian capital of Lagos, Africa’s most populous city, the consequences for the west African oil and gas industry would be considerable,” the agency added.

Nigeria, the world’s 12th-largest producer of oil, depends on oil for more than 85 per cent of hard currency earnings and more than two-thirds of state revenues.

“A major outbreak would impair the indigenous workforce and likely prompt international oil companies to evacuate their expatriate personnel, resulting in significantly curtailed production,” the note said.

-FT

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