Melbourne: Ebola’s economic devastation has worsened in West Africa, with the outbreak predicted to shrink gross domestic product next year in two of the three worst-hit countries, the World Bank said.
The bank cut its 2014 growth forecasts for Liberia, Sierra Leone and Guinea, and predicted only Liberia’s economy will expand next year as investors flee, construction projects are halted and agricultural production dips, according to an updated assessment of Ebola’s economic impact released on Tuesday.
The Washington-based bank reiterated a projection it made in October that the financial impact of the outbreak could reach $3.8 billion to $32.6 billion by the end of 2015 if the virus continues to surge in the three countries and spreads to neighbouring ones. Mali reported seven cases since November.
“As long as the epidemic continues, the human and economic impact will only grow more devastating," World Bank President Jim Yong Kim said in a statement. “As we accelerate the immediate health response, the international community must also do everything we can to help the affected countries back on the road to economic recovery and development."
Kim is on a two-day visit to West Africa to discuss with governments and international agencies the steps needed to end the outbreak. The estimates made in October of the scale of impact remain valid, given that the epidemic isn’t yet under control, the World Bank said.
Ebola transmission remains intense in Sierra Leone, especially in the capital, Freetown, and cases have increased in the Guinean capital, Conakry, it said.
The rising infections led the United Nations to miss its goal of ensuring by 1 December that at least 70% of Ebola cases in West Africa get proper medical treatment.
In Liberia and Guinea, the UN’s 70% goal has been met, while Sierra Leone missed that target, Bruce Aylward, the World Health Organization’s assistant director-general in charge of Ebola response, said on Monday. In all three countries, the goal of safe burial for 70% of those who died from the virus has been met.
The UN aimed to meet those benchmarks by Monday, 60 days after a plan was put in place. The WHO hopes to end the outbreak by the middle of next year, Aylward said.
The World Bank Group is mobilizing almost $1 billion in financing for the three countries, including funds to enable trade, investment and employment in Guinea, Liberia, and Sierra Leone.
All three nations had been growing rapidly in recent years and into the first half of 2014, before Ebola stifled investment, caused jobs losses and stoked inflation.
Liberia’s economy will expand 2.2% this year, the bank said on Tuesday. That’s down from a pre-crisis estimate of 5.9% and the 2.5% pace it predicted in October. Growth next year will be 3%.
Projected 2014 growth in Sierra Leone is now 4%, versus 11.3% before the crisis and 8% in October. The bank forecasts the economy will contract 2% in 2015.
Growth in Guinea is now projected to reach 0.5%, compared with a pre-crisis estimate of 4.5% and 2.4% predicted in October. It said the economy will shrink 0.2% in 2015.
“The key to avoiding the higher scale of economic impact is not only to eradicate the existing epidemic, but also to invest in preparedness in neighbouring countries," said Marcelo Giugale, a senior director with the World Bank, in the statement. “A full-fledged recovery effort could help the affected countries improve on growth estimates, and return to building their economies and reducing poverty." Bloomberg
Simeon Bennett in Geneva contributed to this story.