Ebola Threatens Nigeria’s GDP – Report

Ebola Threatens Nigeria's GDP
Ebola Threatens Nigeria’s GDP

The world’s worst-ever outbreak of Ebola will inflict economic damage on Nigeria and other the West African countries as companies scale back operations.

Commercial and transport disruptions that would probably last for at least the next month, along with increased health expenditure, might put pressure on budgets, jeopardising the nations’ economic growth, a senior credit officer at Moody’s Investors Service, Matt Robinson, said in a report on last week.

The world’s largest listed palm oil producer, Sime Darby, said it was slowing output in Liberia.
The world’s largest steel producer, ArcelorMittal, said the spread of the virus had delayed expansion plans at its Liberia plant, Bloomberg reported.

Sifca Group, the Ivory Coast-based agribusiness, said it halted rubber exports from Liberia. MTN Group Limited, the largest wireless carrier in sub-Saharan Africa, said five expatriate workers left Liberia as a precautionary measure.

“Ebola threatens to have significant economic and fiscal ramifications for a number of sovereigns in the region,” Robinson said. “The outbreak risks having a direct financial effect on government budgets via increased health expenditures that could be significant.”

The outbreak that has killed more than 1,000 people, the worst since the virus was first identified in 1976, has spread to Nigeria, Africa’s most populous nation of about 170 million. There is no cure for the disease, which is normally treated by keeping patients hydrated, replacing lost blood and using antibiotics to fight opportunistic infections.

The spread of the disease may have “an indirect effect arising from an Ebola-induced economic slowdown on government revenue generation in a region where budgets are already hindered by low tax collection,” Robinson said.

The economies of Sierra Leone, Guinea and Liberia may lose 1 percentage point of growth because of the disease, Aliko Dangote, Africa’s richest man, said in a Bloomberg TV interview recently.

Reduced agricultural production and trade might shave off as much as two percentage points of growth in those three countries, New York-based Teneo Intelligence had said on last week.

Sierra Leone’s Ministry of Finance said it would probably miss its growth target of 14 per cent this year and inflation is already quickening as trade slows. Guinea is set to expand about 4.5 per cent and Liberia about seven per cent, according to the International Monetary Fund.

 

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