Ebola operates with horrifying rapidity and tragic loss of life, and for obvious reasons it has captured the attention of people around the world. The epidemic’s effects are not, however, limited to the loss of human life and cost of treatment.

The true effects of Ebola come from two sources: the actual medical costs of illness and the loss of human life, and the insidious costs of fear, which reduces purchasing, work participation, and the movement of goods and services.

As Max Bankole Jarrett, deputy director of the Africa Progress Panel, notes, “The biggest impact of the crisis may not actually be due to the actual direct result of the disease but due to fear and other behavioral effects.”

Taken together, the World Bank estimates that the economic costs of Ebola could climb to the billions in the three most heavily-affected nations, Liberia, Sierra Leone, and Guinea.

For example, in Liberia, major investments to triple mining capacity have been put on hold by ArcelorMittal, while China Union, a second key mining firm, has shuttered operations entirely. Rubber exports from the nation are expected to drop up to 20 percent, and cement sales fell “nearly 60 percent between July and September,” according to World Bank estimates.

Jobs and economic activity aside, another looming problem is agriculture. The World Bank estimates that Guinea’s coffee production has dropped by 50 percent, cocoa by 33 percent, and palm oil by 75 percent. Sierra Leone is facing a cultivation rate of only 10 percent in the “certain key agro-ecological areas,” and rice prices have risen by up to 30 percent in affected areas.

Overall, it is estimated that over “1 million people are likely to be in dire need of food due to the direct and indirect impact of Ebola” in Sierra Leone.

The key to minimizing these attendant costs is to aggressively limit the spread of the disease.

If Ebola can be contained swiftly, “The short term impact will be lessened and so too should the time it takes for [Liberia, Sierra Leone, and Guinea] to bounce back,” says Jarrett. “The international community’s approach to the affected countries and the sub-region will also play a significant role.”

If the reemergence of economic activity and trade is prompt, says Jarrett, it could spur a swifter recovery and help the three nations to continue a recent track record of impressive growth. If not, the results could be dire.

Reversing Post-Conflict Achievements

Indeed, Emanuale Santi, chief regional economist of the West Africa Region Department of the African Development Bank, says that the crisis already has the “potential to reverse the countries’ remarkable post-conflict achievements.”

“The more time goes by, the harder will be the impact,” he continues. “Many people have stopped planting seeds, maintaining roads, going to school. Production will be affected as lands are not cultivated, roads will be washed away, and kids will lose years of education. Kids’ nutrition will ultimately be affected.”

“While the first wave of the crisis is predominantly a health crisis, the second wave of impact will be multi-dimensional and even harder to tackle.”

In terms of regional impact, however, Santi emphasizes the importance of a “sense of proportions.”

“Guinea, Sierra Leone, and Liberia… only make up 2 percent of West Africa’s GDP and less than 1 percent of the continent’s economy, with very limited intraregional trade. If the disease is contained, the economic impact at the continental level will be much more short-lived and linked to possible panic behaviors, [rather] than to the direct impacts.” 

Nigeria and Senegal, for example, were able to “break the chain of Ebola” quite rapidly, and as a result other countries are on alert to react quickly should the virus penetrate their borders. “Such prevention plans will certainly have a large payoff,” he says.

Of course, this doesn’t mean that Ebola has not been without its costs for neighboring countries. The World Bank estimates that demand in shopping centers and commercial businesses in Lagos has dropped up to 20 to 40 percent in some areas as a result of the crisis. However, the Nigerian economy is robust, its key industries generally insulated, and its response to the outbreak of the disease in Lagos rapid and effective.

“In both [Senegal and Nigeria],” says the World Bank report, “The price tag has been high in terms of treatment, contact tracing, and enhancing surveillance systems and community outreach. But based on the massive estimated economic cost of the large-scale outbreaks in other countries with much smaller economies, these are resources very well spent.”

Investing In Public Health Services

Speaking at a World Bank conference, Tom Frieden, director of the Centers for Disease Control and Prevention, said of the Ebola crisis, “This is controllable and this was preventable. It’s preventable by investing in core public health services, both in the epicenter of the most affected countries, in the surrounding countries, and in other countries that might be affected.”

For countries like Liberia, Guinea, and Sierra Leone, which are rich in natural resources, improving food security and health infrastructure could thus reduce vulnerability to these kinds of emergencies and their wider-spread economic impact.   

Jarrett says, “The Africa Progress Panel is convinced that Africa can better manage its vast natural resource wealth to improve the lives of the region’s people through long-term investments, particularly in agriculture… and in health.”

For example, he continues, “A recent study, which calls for an increase in domestic financing, notes that an average increase in per capita health spending on $21 to $36 over a five year period could, in year five alone, save the lives of 3.1 million Africans, prevent 3.8 and 5.1 million children from stunting, and yield economic benefits of as much as $100 billion.”

Ebola has thus not only torn its own path of destruction but has highlighted a greater need for a serious investment in health all around — after all, long after Ebola has come and gone, issues of nutrition and basic healthcare will remain. 

“The countries at the epicenter of the Ebola crisis should seek to emerge from this experience with programs and policies that address this transformation agenda,” says Jarrett. With help from organizations like the World Bank and individual nations, hopefully the crisis can be contained in time to minimize the long-term costs of Ebola and open the door to precisely such policies and programs.