A matter of time
The West African economy may yet survive Ebola – but the clock is ticking. Matching the last four years’ 28 pct growth isn’t realistic. Controlling the deadly outbreak before year’s end, though, could preserve enough investment and resources to meet an expanding population’s needs. Given the virus has already spread as far as America, there’s no time to waste.
The numbers tell a compelling story. The economy of the 15-country region grew an average of 6.4 percent annually from 2010 to 2013, and the projected rate for 2014 was 7 percent, according to African Economic Outlook. That would typically lead to rapid increases in average economic well-being, even with the population growing at a 2.3 percent annual clip.
Inflation is also manageable, averaging less than 10 percent a year. Deficits are high at 2 percent of GDP, but even they would not ordinarily be a problem, given the current availability of global financing.
These are, of course, far from ordinary times. Ebola is ravaging Liberia, Sierra Leone and Guinea, where 22 million of West Africa’s 317 million people live. Cases have been diagnosed in other countries – including one in the U.S. state of Texas – and the World Health Organization warns the virus could infect 20,000 West Africans a month by November. The epidemic may persist for years in some areas, according to WHO, exacerbated by poor communications and healthcare facilities.
The human toll will damage the economy to some degree. In Hong Kong, for example, monthly retail sales fell 15 percent in 2003, at the height of the SARS epidemic. Trade in economically weaker West Africa will inevitably drop, and foreign investment could dry up as visitors and businesses avoid areas where the disease persists. Aid may never reach the people who need it most.
The consequences could be devastating. As population growth outpaces resources, more people can become trapped in poverty. And the natural brake that rising affluence puts on such growth will disappear.
The one note of optimism is that healthcare officials say they expect to avoid a worst-case scenario and get Ebola under control in a matter of months. That, more than anything else, could prevent a deadly health threat from becoming an economic one.