Ebola epidemic dramatically halting social and economic development in West Africa, says UNDP report

Geneva – January 15th – A new study on the socio-economic impact of the Ebola disease in West Africa published by the United Nations Development Programme (UNDP) shows that Ebola will have a lasting impact on the economies and people of the countries worst affected – Guinea, Liberia and Sierra Leone.
Job losses, rising food prices, agricultural disruptions and sharp drops in the use of health and education services are likely to increase poverty, child and maternal mortality, and facilitate the spread of HIV/AIDS and malaria – particularly for the rural poor, says the report.
“The disease is killing people who are economically active, slashing family incomes and eliminating jobs in all sectors. It has also disrupted supply, hence inflation is rising in all three countries, threatening the livelihoods of millions of women and men,” said Ayodele Odusola, Chief Economist at UNDP’s Regional Bureau for Africa.
The economy in Liberia could experience negative GDP growth for the first time since the war ended 11 years ago, reaching negative 1.8 percent, while in Sierra Leone, forecasts for 2014 were cut from 11 percent to 4 percent. In Sierra Leone, all sectors have experienced a decline in employment as a result of the outbreak. The country’s largest brewery has scaled down operations, culminating in a loss of 24,000 jobs within the supply chain. Per capita income in the country fell by USD 71 between January and October.
All sectors of the economy in the three countries are impacted but food production is hit particularly hard, reducing the supply of agricultural commodities. In Liberia, despite the decline in demand, rice prices increased by 41 percent. Most rice consumed in Liberia is imported, shifting demand to local commodities such as cassava. The price of cassava has increased by 63 percent while the price of fufu (a cassava-based staple food) more than doubled.
“The crisis is also impairing the ability of governments to raise taxes and invest in infrastructure and social services,” said Odusola. In Sierra Leone, overall domestic revenues (taxes and non-taxes) based on original projections for 2014, fell by 10.39 percent. In Liberia, revenue collection fell short of the pre-Ebola forecast by around $10 million, forcing the Government to adjust its targets downwards from $41.7 million to $26.3 million for September 2014.
“Access and use of health services unrelated to Ebola such as doctors visits, assisted childbirths, antiretroviral therapy drugs and doctors home visits have declined sharply owing to fears of infection,” noted Odusola. This may lead to higher infant and maternal mortality and increased infections from HIV/AIDS, malaria, and other diseases, says the report.
Across the three countries, around 5 million children are out of school due to Ebola. The lack of schools open, coupled with the death of parents and relocation of households has increased the vulnerability of children. “Controlling the epidemic is a necessary condition to the survival of these societies but recovery cannot be an afterthought. Investing in recovery is the smartest way to look forward again. If we work now to build more robust economies and health systems, while creating stronger societies and institutions, we will minimize the chance of seeing another Ebola crisis,” said Abdoulaye Mar Dieye, Director of UNDP’s Regional Bureau for Africa. The report calls for an immediate effort to revive local economies, combining social safety nets for the most vulnerable – such as cash transfers, emergency jobs and cash-for-work – with an economic support package that includes financing for micro-enterprises and building skills among the local workforce. It also recommends supporting food production and investing in infrastructure and social services, including better health systems.