Socio-economic impact of the Ebola Virus Disease in Guinea, Liberia and Sierra Leone - Policy Notes Volume 1, Numbers 1-5
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Socio-economic impact
of the Ebola Virus Disease in
Empowered lives.
Resilient nations.
Guinea, Liberia and Sierra Leone
Policy Notes Volume 1, Numbers 1-5
Cover photo: Congo market, In Freetown, (Photo: Lesley Wright/UNDP) Design, layout and production by Phoenix Design Aid A/S, Denmark. ISO 14001/ISO 9000 certified and approved CO2 neutral company – www.phoenixdesignaid.com. Printed on environmentally friendly paper (without chlorine) with vegetable-based inks. The printed matter is recyclable.
Socio-economic impact
of the Ebola Virus Disease in
Guinea, Liberia and Sierra Leone
Policy Notes Volume 1, Numbers 1-5
A farm in Faranah, Guinea. The country is a breadbasket in West Africa but some of its regions’ agricultural exports have been hard hit by the Ebola crisis (Photo: UNDP).
Table of Contents Vol. 1, No. 1, 3 October 2014 The Economic Impact of Ebola in Guinea, Liberia and Sierra Leone 8 Vol. 1, No. 2, 10 October 2014 Ebola Virus Disease (EVD) imposes substantial loss in household incomes in Guinea, Liberia and Sierra Leone 12 Vol. 1, No. 3, 24 October 2014 Ebola Virus Disease Outbreak (EVD) is overstressing the fiscal capacity of Governments in Guinea, Liberia and Sierra Leone 18 Vol. 1, No. 4, 9 November 2014 Ebola Virus Disease (EVD) Outbreak and Price Dynamics in Guinea, Liberia and Sierra Leone 26 Vol. 1, No. 5, 28 November 2014 Livelihoods are threatened in Guinea, Liberia and Sierra Leone by Ebola Virus Disease (EVD) 32
A motorcycle driver raising awareness of Ebola in Freetown. (Photo: Lesley Wright/UNDP)
Overview
The Ebola health crisis has become a complex de- With the strong commitment of governments, the
velopment challenge for Guinea, Liberia and Sier- international community and the private sector,
ra Leone. In eight months, the outbreak has caused ending the outbreak and resuming growth and
more cases and deaths than all previous epidemics development are possible. That effort will require
combined. In the affected countries, weak capaci- building community resilience, reviving formal
ties, human resources and health systems; uncon- and informal loan and microfinance programmes,
trolled migration flows; poor social cohesion; and supporting food production in the next planting
the persistence of traditional beliefs and practices season, promoting value chains in export-oriented
have contributed to the crisis. primary commodities, as well as resuming initia-
tives to strengthen skills. In addition, containing
Ebola is hurting economies and livelihoods, slash- the disease must go hand in hand with rebuild-
ing gross domestic output, threatening food se- ing and strengthening the health systems in these
curity, reducing opportunities for jobs and live- countries.
lihoods, and slowing down foreign investment.
All of these consequences are robbing people of a UNDP is working on providing concrete evidence
well-deserved peace and promising development that will help to accelerate recovery efforts. Work-
gains. ing with the UN Mission for Ebola Emergency
Response (UNMEER) which is leading the UN’s
Through its impact on prices, the epidemic is re- overall response, UNDP is leading early recovery
ducing people’s purchasing power and increasing efforts, and supporting nationally-led efforts to ad-
their vulnerability, even more so in rural areas. The dress the crisis. UNDP’s response to the crisis is
most active and productive segments of the labour focusing on three priorities: Stronger coordination
force, including women, are being decimated by and service delivery; community mobilization and
the virus. Income-generating opportunities are be- outreach; socioeconomic impact and recovery.
ing reduced, especially for those in vulnerable em-
ployment. All in all, household incomes in affected The international community can help the affected
countries have suffered, plummeting by around 12 countries limit the socio-economic impact of this
percent in Guinea and 35 percent in Liberia and crisis. By stepping up recovery efforts even as the
posing a potential threat to peace and stability. immediate response is on-going, these countries
will be in a better position to reset their economies
The crisis is also stressing the fiscal capacity of and embark on sustainable development paths.
governments in Guinea, Liberia and Sierra Leo-
ne. Overall shortfalls in tax and non-tax revenues
resulting from the outbreak are continuing to in-
crease. Fighting the disease is blowing up recurrent
expenditures, often at the expense of infrastruc-
ture spending, and in the midst of low absorptive
capacities. Meanwhile, government financing gaps Abdoulaye Mar Dieye
are widening and increasing public debts. UNDP Regional Director for Africa
7
Vol. 1, No. 1, 3 October 2014
A little girl after washing her hands in the neighborhood of Mabella, Sierra Leone. (Photo: Lesley Wright/UNDP)
The Economic Impact of
the Ebola Virus Disease (EVD) in
Guinea, Liberia and Sierra Leone
EVD is posing serious development
challenges in the epicenter countries
West Africa is experiencing the worst-ever out- Economic impacts cut across loss
break of Ebola Virus Disease (EVD) globally. In of gross domestic output, threat to
less than five months, what looked like a confined food security, fall in employment and
outbreak in a remote community in Guinea in livelihoods, and decline in foreign
March 2014became a complex development chal- investment
lenge in Guinea, Liberia and Sierra Leone, and a The nature of the outbreak imposes serious im-
threat to economic activities and public health in pacts on the economy. The restrictions on the
the Democratic Republic of the Congo, Nigeria movement of goods and people have threatened
and Senegal. As at 22 September 2014, the total the food chains from production to market access
number of confirmed cases and deaths stood at and commerce. Most countries bordering Guinea,
5,800 and 2,800:1 Liberia was the worst hit, with Liberia and Sierra Leone have closed their borders
1,698 cases and 871 deaths, followed by Sierra – with thousands losing access to their livelihoods
Leone (1,216 cases and 476 deaths) and Guinea and sources of income, including farmers who can
(771 cases and 498 deaths). The average EVD fa- no longer harvest their produce. Even banks in Si-
tality ranged from 39.14 percent in Sierra Leone erra Leone have been closing business at 1.00p.m.,
to 64.59 percent in Guinea, and in less than eight thereby restricting access to financial resources for
months, it surpassed the cumulative sum over 32 investment and consumption activities. The limit-
years (1976-2008). ed supply of goods and services has started to take
its toll on prices: the prices of oil, rice and pota-
The outbreak and the inability to contain it are a toes doubled in Liberia, and the price of rice was
reflection of weak institutional and infrastructural marked up by at least 30 percent in Sierra Leone.
capacities, which include, inter alia: weak human In April alone, inflation rose from 6.39 to 7.8 per-
development outcomes; weak health systems; free cent in Sierra Leone.2 Since July and August is the
migratory patterns of people; the persistence of planting season in the region, a food crisis in early
fragility characterized by weak social infrastruc- 2015 is imminent in these countries and beyond.
ture; and socio-cultural practices such as tradi-
tional funerals. Efforts are still ongoing to mobi- Substantial resources devoted to development
lize experts and resources towards controlling this work are now diverted to addressing public health
outbreak from, among others, the United Nations, implications of the outbreak. For instance, most
non-governmental organizations (NGOs) and the United Nations development resources in these
United States’ Centers for Disease Control and countries have been reprogrammed to address this
Prevention. emergency; the World Bank is also reprogram-
ming along this line.
The loss of lives, morbidity, restrictions, panic as
well as the risk aversion behaviour of investors The risk aversion behaviour of trade, business and
have serious economic impacts. tourism partners could exacerbate the risk aver-
sion behaviour of foreign investors, which could
result in short- and medium-term economic im-
pacts. British Airways, Emirates Airlines, Kenya
Airways and Air Côte d’Ivoire have already halted
flights to some affected countries. As tourists can-
Vol. 1, No 1, 3 October 2014 9
cel their bookings and movements within coun- tively contained, the effects on GDP growth could
tries, local hotels and restaurants suffer a slump be devastating by 2015, ranging from 2.3 percent
in their business, which results in lay-offs and in Guinea, 8.9 percent in Sierra Leone, and 11.7
slowdowns in economic activities of other sectors percent in Liberia. This could cause a drop in Li-
that depend on the hospitality sector. The popular beria’s net growth of 6.8 percent to -4.9 percent in
Lumley Beach in Sierra Leone, known for its expa- 2015.
triate patronage, is now completely deserted.
Enhanced and coordinated
Some mining companies, the main source of for- international community support
mal employment and government revenues, have is critical for containing the disease
closed down part of their operations. The China and reversing economic hardships
Union,3 a firm that ships iron ore in Liberia, Dan- imposed by EVD
gote Cement company in Liberia, Vale, the world’s The economic impacts of the outbreak are strong–
largest iron ore producer, operating in Guinea4 and from job losses and low revenue to low productiv-
Marampa iron-ore mine in Sierra Leone have all ity and low growth. These impacts could reverse
sent their workers home.5 Sime Darby, the world’s the gains achieved on the Millennium Develop-
largest palm oil producer, also reduced output in ment Goals (MDGs), especially on poverty, food
Liberia, and Sifca Group, a Côte d’Ivoire agribusi- security, and child and maternal health. Greater
ness, halted rubber production in Liberia. community engagement in the preparedness and
response is imperative. Enhanced and coordinated
The close-down or lull in business operations not international community support is critical, with
only results in losses in jobs and profits to compa- aroundUS$1 billion estimated as the resource re-
nies, but also limited fiscal space of governments. quirement over the next few months. To this end,
The largest fiscal impact is felt in Liberia US$93.00 the United Nations has set up the United Nations
million (4.7% of GDP), followed by US$79.00 Mission for Ebola Emergency Response (UN-
million in for Sierra Leone (1.8% of GDP) and MEER), which is aimed at stopping the outbreak,
US$120.00 million for Guinea (1.8% of GDP). This treating the infected, ensuring essential services,
could worsen if the EVD is not quickly contained.6 preserving stability and preventing further out-
breaks. Further, the United Nations has also es-
The potential loss in production and short- and tablished the Ebola Multi-Partner Trust Fund to
medium-term productivity due to slackened eco- ensure a coherent United Nations system contri-
nomic activities induced by the EVD has tell- bution to the overall response. The support should
ing effects on the countries’ GDPs. Bloomberg not be restricted to humanitarian response, but
has projected the combined losses in the GDP of rather, it should also include fiscal support, in-
Guinea, Liberia and Sierra Leone at around US13 frastructure support including withdrawal of the
billion. The estimates from the World Bank show economic blockage, and strengthening the sur-
that the fall in GDP in 2014 could range from 2.1 veillance, detection and treatment capacity of the
percent (Guinea) to 3.3 percent (Sierra Leone) and health system.
3.4 percent (Liberia). If the outbreak is not effec-
10 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra LeoneA business owner from Waterside Market in Monrovia, Liberia (Photo: Carly Learson/UNDP)
Vol. 1, No 1, 3 October 2014 11Vol. 1, No. 2, 10 October 2014
Vendors struggle with plummeting sales and rising cost of transporting goods to the market in West Point after the Ebola Outbreak and qurantine took effect in Liberia. (Morgana Wingard/ UNDP)
The Ebola Virus Disease (EVD) imposes
substantial loss in household incomes
in Guinea, Liberia and Sierra Leone
12 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra LeoneContext
Ebola has become one of the most complex devel- capacities, including weak health systems, free
opment challenges in Guinea, Liberia and Sierra migratory patterns, the persistence of fragility
Leone. As at 22 September 2014, the total number characterized by weak social infrastructure, and
of confirmed cases and death stood at 5,800 and socio-cultural practices. Although national and
2,800, respectively,1 and the trend is rising. Liberia global efforts to tame the disease have increased,
is the worst hit (1,698 cases and 871 deaths) fol- EVD is yet to be contained. And it has continued
lowed by Sierra Leone (1,216 and 476) and Guinea to threaten economic activities, productivity, live-
(771 and 498). The average fatality ranged from lihoods and employment in the three epicentre
39.14 percent in Sierra Leone to 64.59 percent in countries. The loss of lives, morbidity, restrictions,
Guinea, and health personnel are also affected. The panic, and aversion behaviour of households, mar-
EVD fatality in less than eight months surpassed ket agents and investors have serious effects on
the cumulative sum in 32 years (1976-2008). Over- households’ incomes.
all fatalities were over 54 percent of the confirmed
cases in these three countries; interdependence Loss in households’ incomes
across countries makes containment challenging. The outbreak, if not effectively contained and
EVD is not only confined to these three countries, managed, could reverse much of the economic and
but has also spread to the Democratic Republic of social gains achieved (including the Millennium
the Congo, Nigeria, Senegal, Europe and America. development Goals, or MDGs) over the past dec-
ade. The annual growth in these three countries,
The outbreak and inability to contain it are a re- between 2000 and 2013, averaged 2.79 percent
flection of weak institutional and infrastructural (Guinea), 8.21 percent (Sierra Leone) and 10.18
Figure 1: Correlation between per capita income and Ebola-related deaths
Guinea Liberia Sierra Leone
0.0
-0.2
-0.4
-0.6
-0.8
-1.0
Vol. 1, No. 2, 10 October 2014 13Figure 2: The impact of EVD on household incomes
800
Liberia Sierra Leone Guinea
700
600
500
400
300
200
100
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
percent (Liberia). They have started to feel the del- especially when the ‘bread winner’ or head of
eterious impact of EVD on economic growth. The household dies or is seriously sick. This not only
short-term impact on gross domestic output has leads to loss of productivity, but also breeds a high
been estimated at 2.1 percentage points in Guinea dependency ratio. This increases the level of vul-
(reducing growth from 4.5 to 2.4 percent); 3.4 per- nerability and could increase the number of peo-
centage points in Liberia (reducing growth from ple falling below the poverty line. Some indirect
5.9 to 2.5 percent); and 3.3 percentage points in effects further compound this reality. Stigmatiza-
Sierra Leone (reducing growth from 11.3 to 8 per- tion in these three countries creates discrimina-
cent). This forgone output corresponds to US$359 tion against households and communities with
million in 2014 prices. However, if EVD is not Ebola: neighbours, drivers and traders avoid them.
contained, these estimates could rise to US$809 In turn, to a large extent, this reduces their access
million in the three countries alone. In Liberia, to food and basic services.
the hardest hit country, the impact of a high Ebola
scenario could reduce output by 11.7 percentage The strength and direction of the linear relation-
points in 2015 (reducing growth from 6.8 percent ship between household incomes (using per capita
to -4.9 percent).2 income), and mortality and morbidity associated
with EVD is strong across the three countries.3 The
The potential loss in production and short- and direction of relation in the countries is negative
medium-term productivity due to slackened eco- and it is strongest in Liberia; followed by Sierra
nomic activities induced by the EVD has telling ef- Leone (Figure 1). High incidence of EVD is asso-
fects on households’ livelihoods, jobs and income. ciated with a substantial reduction in household
This could pose some negative impact on their incomes. For instance, Lofa Country, one of the
health, children’s and wards’ education attendance heavily affected areas in Liberia, is self-sufficient in
and performance as well as the overall poverty and rice and produces 20 percent of rice in the coun-
MDG situation. Morbidity and mortality could try.4 With the high rate of morbidity, mortality and
also pose serious threats to households’ incomes, restrictions of movement, most farmers could not
14 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra LeoneFigure 3: Household income loss
250
% loss US$ loss
200
150
100
50
Guinea Liberia Sierra Leone
0
-50
harvest their produce. This cuts the farmers off loss in per capita income in the three countries
from their livelihoods and incomes. is more revealing. For people already living at the
margin of absolute poverty line ($1.25 per day),
The gains in household income over the past one this results in not having income for the basics for
and a half decades are being destroyed by EVD 54 days (Guinea), 138 days (Liberia) and 169 days
(Figure 2). Guinea, Liberia and Sierra Leone have (Sierra Leone).
consistently experienced an improved level of per
capita income since 2001, averaging an annual The loss of farm harvest to farmers, reduced pas-
growth rate of 4.33 percent in Guinea, 8.74 per- sengers for transport operators, temporary and
cent in Liberia and 13.50 percent in Sierra Leone. occasional closure of markets, partial operations
The outbreak of EVD, in just six months, has led to of banks, total restrictions of movements to ar-
severe loss in household incomes – 35.13 percent tisans, closure of government offices and laying
(Liberia), -29.67 percent (Sierra Leone) and -12.73 off of workers in mines and other companies all
percent (Guinea) (Figure 3). contributed into substantial loss in households’
incomes. The rising trend in price movements in
The shocks to income could make people more these countries also has some telling effects on
vulnerable and could reverse the gains made in households’ real income arising from weak pur-
poverty reduction in some of these countries. For chasing power.
instance, the reduction in poverty from 92.61 per-
cent in 1991 to 43.31 percent in 2007 in Guinea Key Conclusions
could be reversed. A similar trend is also observed The income effects of EVD is high and could un-
for Sierra Leone. The impact of loss in per capi- dermine the achievements made on the MDGs
ta income varies from one income group to an- over the past decade, especially in poverty, food
other; the most severe burden is on people in the security, education, child and maternal health. A
lowest quintile. Using the absolute poverty line of sharp drop in income, ranging from around 12.00
US$1.25 as a benchmark, the ‘day equivalent’ of to 35.00 percent, is a recipe to restiveness, which
Vol. 1, No. 2, 10 October 2014 15could further reverse the progress made in peace to identify direct and indirect channels through
building, national building and stability in Guinea, which EVD affects household incomes (includ-
Liberia and Sierra Leone. This calls for urgent ac- ing stigmatization) and should institute proactive
tions to stop the outbreak and address the serious awareness-raising programmes to educate and
hardship it is imposing on communities and peo- re-orientate communities and investors on these
ple, including loss of income, livelihoods and jobs. issues. This must be complemented with enhanced
Livelihood regeneration, income support and safe- capacity to treat affected people, provide essential
ty net programmes must be institutionalized in se- services, and prevent the spread of EVD to other
riously affected communities. Government needs areas.
16 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra LeoneA former teacher in Monrovia on losing his job after school closures due to the Ebola Virus. (Morgana Wingard/ UNDP)
Vol. 1, No. 2, 10 October 2014 17Vol. 1, No. 3, 24 October 2014
In Freetown, Okada taxi riders are using their business to raise awareness of the disease (Photo: Lesley Wright/UNDP)
The Ebola Virus Disease Outbreak (EVD)
is overstressing the fiscal capacity
of Governments in Guinea,
Liberia and Sierra Leone
18 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra LeoneContext
The Ebola virus disease (EVD) outbreak in the to meet national health, social and development
Mano River Union countries of Guinea, Sierra Le- obligations without jeopardizing macro-econom-
one and Liberia is one of the most complex devel- ic stability. How has the Ebola crisis affected the
opmental challenges in recent times. In addition revenue generation, expenditure expansion, infra-
to truncating the appreciable economic growth structure spending prioritization, and public debt
of the past decade and worsening the unemploy- positions in Guinea, Liberia and Sierra Leone?
ment situation in these countries, it is particularly This Policy Brief looks at the impact of EVD on
imposing a serious stress on the fiscal capacity of the fiscal space in these countries.
governments.
How has EVD crisis affected revenue
The new waves of EVD are completely different in generation, spending priority and
scope and in depth, partly because of cultural and public debts?
institutional interplay, and partly because these The Ebola crisis weakens the capacity to optimally
countries are socially and economically integrated generate revenues and puts pressure on public ex-
with their neighbours. There are more cases and penditures. It reduces revenue through cuts in eco-
associated fatalities in eight months than the com- nomic activities and employment, and a reduction
bined 20 episodes of EVD outbreak since 1976. in tax compliance. It also increases expenditure,
What looked like a manageable phenomenon on especially through awareness raising and sensitiza-
25 March (86 cases and 60 deaths and localized tion, logistics and supplies, sanitation, and incen-
in Guinea) has become an issue of monumental tives to health workers as well as social protection
proportion (9,062 cases and 4,542 deaths – now responses from governments. Arising from the
spreading beyond borders) as of 12 October, with widening gap created between declining revenue
Guinea, Liberia and Sierra Leone as the epicen- and rising expenditures, public debt increases and
tres.1 the ability of these countries to grow out of aid is
further weakened.
The fatality rate ranges from 36.4 per cent in Sierra
Leone to around 58.0 percent in Guinea and Li- Capacity to generate tax and non-tax
beria. The improved management of the outbreak revenues is weakened
over the past months has substantially reduced the The decline in production and related economic
fatality rate from an average of about 70.0 percent activities, the resultant job losses and evacuation
over the past three months. Most of the dead are of expatriate workers take a substantial toll on the
women and around two-thirds of those infect- revenue collection of governments through a re-
ed are in the most economically active age group duction in personal income tax and company in-
(15-50 years). The disease has taken a toll on the come taxes. The uncertainty created by EVD has
health system, with four doctors and more than further weakened tax compliance in these coun-
30 nurses among the dead in Sierra Leone, and 92 tries. Government revenues from taxes, tariffs and
health workers in Liberia. As health workers fall ill customs from leading sectors such as tourism,
and die, and the EVD grows exponentially, these agriculture, manufacturing and mining are threat-
countries’ capacity to manage the disease becomes ened by risk aversion behaviour resulting from re-
overwhelmed. strictions on movement of people and goods.
EVD weakens the ability of governments to man- Tourism, an important source of government
age their revenues, expenditures and public debts revenues, has been seriously hit by EVD. In Si-
Vol. 1, No. 3, 24 October 2014 19Figure 1: Decline in major agricultural production by 1 September. In Liberia, the average hotel occu-
in Guinea, Jan-June 2013 and Jan-June 2014 pancy also dropped from over 70.0 percent before
the crisis to about 30 percent in September 2014,
while the number of weekly commercial flights
dropped from 27 between January and August
to only six from the beginning of September. A
similar trend is observed in Guinea: in Conakry,
Coffee, 53.4 the hotel occupancy rate fell by half to less than
Palm, 75.0
40 percent compared to an average of 80 percent
before the crisis. Because taxes are paid based on
rate of occupancy and number of visitors, this has
led to substantial losses in revenues.
Cocoa, 34.6
The disruptive impact on revenues accruing from
agriculture exports will be felt most in Sierra Le-
one, where agriculture accounts for 57.0 percent
of GDP, followed by 39.0 percent in Liberia and
20.0 percent in Guinea.2 In Sierra Leone, for in-
stance, cocoa and coffee production, which ac-
count for 90.0 percent of agricultural exports, has
erra Leone, the hotel occupancy rate dropped by stalled due to people abandoning their farms.3 In
50.0-60.0 percent and the number of visitors to the Liberia, production and shipment of rubber, the
country, which rose from around 5,500 in Febru- single most important agricultural export for the
ary to over 8,200 in April, fell considerably to less country, have been seriously affected by EVD be-
than 2,000 in August 2014. The number of weekly cause of the reduced mobility of the workforce and
flights dropped from 31 until August to only six the difficulty in getting the products to the ports
Figure 2: Tax and non-tax revenue prior to and during EVD (US$ million) in 2014
1500
1200
900
600
300
0
Guinea Liberia Sierra Leone
-300
Tax and non-tax revenue (Pre Ebola crisis) Tax and non-tax revenue (adjusted as a result of Ebola) Net Change
20 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra LeoneFigure 3: Trend in national revenue in Sierra Leone (SLL million)
400000
Total Revenue and Grants Domestic Revenue Grants
350000
300000
250000
200000
150000
100000
50000
0
FY2010 FY2011 FY2012 FY2013 FY2014 FY2014-Ebola
due to the quarantine zones. The initial projection tember 2014, revenue shortfall as a share of GDP
for rubber exports for 2014 (US$148 million) has varies from 0.77 percent in Guinea to 1.26 percent
been estimated to drop to $118.4 million, repre- in Sierra Leone and 2.04 percent in Liberia. This
senting a reduction of around 20 percent. Figure 1 could have serious implications on fiscal sustain-
shows how key export commodities such as cocoa ability of governments.
and palm oil have been badly hit in Guinea.
Revenue collection in Guinea in September was
The mining sector, an important source of reve- only 54.0 percent compared to the initial projec-
nue in Sierra Leone and Liberia, also faces a sig- tion of 67.0 percent. The low performance led to a
nificant disruption due to the repatriation of per- revision in revenue collection for 2014 from 19.7
sonnel and travel restrictions. In 2013, in Liberia, to 18.8 percent of GDP. Overall domestic reve-
this sector accounted for 17.0 percent of GDP and nues (taxes and non-taxes) in Sierra Leone, based
56.0 percent of total exports ($559.0 million). It on original projections for the 2014, fell by 10.39
contributed 16.0 percent to GDP in Sierra Leone. percent (Figure 3) – ranging from 10.07 percent
The potential additional revenues from the recent for personal income tax to 20.68 percent for im-
expansion of industrial and mining sectors are at port taxes5. Also, in Liberia, as of the first week of
risk due to the scaling down of operations by key September 2014, revenue collection fell short of
investors such as the China Union, Acerlor Mital, the pre-Ebola forecast by around $10.00 million,
as well as the Australia and Canada firms in Libe- which has made the Government to adjust its Sep-
ria and Sierra Leone.4 tember targets downwards – from $41.7 million to
$26.3 million for September 2014.6 Evidence from
The overall tax and non-tax revenues shortfall re- the Ministry of Finance, as of the first week of
sulting from the EVD outbreak appears relatively October, indicated that the projected revenue for
small in absolute figures – from $45.7 million in fiscal year (FY) 2014/2015 is expected to decline
Liberia to $58.0 million in Sierra Leone (Figure 2), by around 19.0 percent from the original projec-
but it is relatively big as a share of GDP. As of Sep- tion of $559.3 million to $453.2 million (around
Vol. 1, No. 3, 24 October 2014 21$106.1 million) due to an anticipated decline in ment of a response plan in August 2014 included
various taxes and other administrative fees. Sever- the allocation of $100 million to contain and pro-
al factors contributed to the decline in revenues in vide support to families affected by the epidemic,
these countries: closure of businesses, loss of jobs, of which $34.0 million was set aside for food aid
evacuation of expatriate staff, reduction in sales of and social protection.
goods and services, restriction of movement and
risk aversion behaviour, and a decline in major The Sierra Leonean Government also established
primary exports. 169 community holding centres for Ebola pa-
tients;8 and treatment centres with a total of 1,500
The epicentre countries depend on official devel- beds. The 1,500 additional treatment centre beds
opment assistance (ODA) as an important source will require a 5,250 healthcare staff;9 equipment
of revenue. Liberia has the highest dependence on and logistics,10 and more laboratories. At least five
ODA, at 50.0 percent of GDP in 2011 ($185 per additional ones are urgently needed since the cur-
capita), compared to 14.0 per cent ($71 per capita) rent four customized Ebola laboratories can only
in Sierra Leone and 4.0 per cent in Guinea ($20 handle about 150 samples per day.
per capita). The accelerated economic growth ex-
perience of the recent past that could have weaned The Government of Liberia also set up an Ebola
these countries out of ODA orphanage is being re- task force, established an Incidence Management
versed. If not effectively controlled, and given the Centre focusing on epidemiology, and opened a
impact of EVD on long term development, these national Ebola Command Centre to oversee coor-
countries are likely to be further enmeshed in dination and strategic planning, monitoring and
aid-dependency syndrome. evaluation, including tracking of contacted per-
sons. It also put in place an agricultural stimulus
EVD imposes exponential increase in ($30 million) and an unconditional cash transfer
recurrent expenditure, often at the expense of ($30 million) to people affected by EVD. The Min-
infrastructure spending, and in the context of istry of Health and Sanitation also developed a Na-
low absorptive capacity tional Response Plan in May 2014 and dedicated
Due to the rising trend of EVD in the epicentre $1.78 million, which was revised to $25.9 million
countries, an exponential increase in spending in July.
is inevitable. To stop the outbreak, treat infected
people, provide essential drugs, increase security Given the expenditure requirements enumerated
and prevent outbreaks in non-affected areas, sub- above, recurrent spending (such as salaries and
stantial resources are needed for communication other running costs) of the three countries have
campaigns and awareness raising, facilities and increased – by 6.4 percent in Guinea (around
equipment, training of health caregivers, and so- $70.0 million), by 6.5 per cent in Sierra Leone
cial protection mechanisms, among others. The (around $37.0 million) and by 15.2 percent in Li-
main challenge is that these countries are experi- beria ($67.2 million). Evidence from the Ministry
encing low absorptive capacity. For instance, cost of Finance of Liberia further reveals that addition-
overrun in Liberia is estimated to be about 20.0 al spending pressure resulting from the EVD is
percent7. Addressing the absorptive capacity issues estimated at $79.7 million. Generally, government
remains imperative. expenditure rose to between 27.4 and 30.7 percent
of GDP following treatment-related expenditures
In Guinea, the following were undertaken: three for the outbreak.
mobile laboratories were set up; two treatment
centres were established and are operating; 41 In these countries, the increase in spending arose
control checkpoints were opened at the borders; from payment for salaries, operations, mainte-
and a number of measures were institutionalized nance, logistics and public education. Spending
at the airport to check the outbreak. The establish- on development projects including infrastructure
22 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra Leonehas been sacrificed. The initial estimate of capital The overall fiscal deficit (spending gap, includ-
spending sacrificed was estimated to $20.0 mil- ing development expenditure and grants) is quite
lion (Liberia) and $16.0 million (Sierra Leone) to high. Overall deficit for Sierra Leone, as a result
accommodate the health and social responses. In of EVD, rose by 31.79 percent between April and
Sierra Leone, this has been revised to $44.7 million September 2014. By early October, this was re-
as opposed to the earlier $31.3 million proposed in vised from 4.2 percent of non-iron ore GDP to
the International Monetary Fund’s (IMF) revised 5.7 percent, while the estimated total grants and
augmentation programme. loans were also revised from 7.0 percent of non-
iron ore GDP to 7.9 percent as a result of the crisis.
Governments financing gap is widening and The Ministry of Finance estimated the financing
it is having a toll on public debts gap for 2014 at $100.3 million. There was a fund-
The gap between revenue collected and basic needs ing gap of $202.6 million in Liberia arising from
of government (excluding development spending) fall in revenue collection of $106.1 million and net
as a result of Ebola is around $113 million for Li- expenditure pressure of $96.5 million.
beria (5.1 percent of GDP), $95 million for Sierra
Leone (2.1 percent of GDP) and $120 million for The crisis is having a toll on public debts. In Sep-
Guinea (1.8 percent of GDP) in 2013 prices. tember 2014, the IMF granted additional emergen-
Vendor selling laundry hampers at Waterside Market in Monrovia, Liberia. (Photo: Carly Learson/UNDP)
Vol. 1, No. 3, 24 October 2014 23cy financial aid to Guinea, Liberia and Sierra Leo- sustainable debts in these countries, we call on the
ne amounting to $130.0 million to help respond international community to ensure all supports
to the Ebola outbreak – $41.0 million for Guinea, are in the form of grants, rather than loans. This
$49.0 million for Liberia and $40.0 million for Si- is important to boost their future economic and
erra Leone. The revised fiscal framework, under social development outlook.
the existing Extended Credit Facility with the IMF
also provided for additional borrowing of $17.0 Risk aversion behaviour, hysteria or panic, is an
million from the domestic financial market in ad- important channel through which EVD affects the
dition to $9.2 million previously borrowed. More- fiscal positions of government. The best antidote
over, there was an agreement to either further for fear or panic is urgent and effective response.
borrow $8 million in the domestic market or un- The international community must change the
dertake a cut in expenditures of the same amount. narrative that has started to stigmatized people in
The World Bank has also approved $40.0 million the Manu River Union.
for grants and loans for each of the three countries.
As of 10 October 2014, the African Development Sacrificing development spending, especially for
Bank (AfDB), committed $220.0 million – $60.0 roads, energy, building schools and hospitals,
million through the World Health Organization, could truncate peace dividends in these countries.
$150.0 million directly to the three countries, and The international community should translate
$10.0 million to mobilize African doctors and their pledges into commitment to halt the crow-
health practitioners. ing out of infrastructure spending. Development
partners’ efforts to refocus their programmatic
Conclusions interventions in containing is commendable and
EVD weakens the ability of the governments of should be continued. Efforts to beef up the absorp-
Guinea, Liberia and Sierra Leone to effectively tive capacity of government is also vital.
generate tax and non-tax revenues (mostly as a re-
sult of risk aversion behaviours). Efforts to contain Essential services are needed in quarantine areas
EVD, treat affected people and provide essential and treatment holding centres. It is crucial to in-
services have increased government expenditure vest in building institutional capacity of the health
phenomenally. system in order to address the underlying causes
and factors that have made it difficult to contain
The diverging trend in revenue and expenditures is the outbreak. This includes renovating health in-
exposing governments to unanticipated domestic frastructure, increasing the quantity and quality of
and external debts, which should be guarded effec- healthcare staff, and investing in the decentraliza-
tively to avoid fiscal unsustainability. To avoid un- tion of health system management.
24 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra LeoneA woman sells oranges in a Monrovia neighborhood (Photo: Carly Learson/UNDP)
Vol. 1, No. 3, 24 October 2014 25Vol. 1, No. 4, 9 November 2014
A market street in Monrovia (Photo: Carly Learson/UNDP)
The Ebola Virus Disease (EVD) Outbreak
and Price Dynamics in Guinea,
Liberia and Sierra Leone
26 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra LeoneEbola, through its impact on prices, is
reducing people’s purchasing power and
is increasing their vulnerability
Containing the EVD in Guinea, Liberia and Sier- ea and Liberia, but continues to rise exponentially
ra Leone still remains a serious concern. The total in Sierra Leone.2
number of confirmed cases was 11,428, with Li-
beria accounting for more than half of the cases, EVD could affect prices in several ways. The most
Sierra Leone, one third, and Guinea, just above affected communities and regions are the food
one tenth – as of 27 October 2014. Figure 1 pro- baskets of the epicentre countries; which result
vides the breakdown of cases, deaths and fatalities. in an impending agricultural production short-
The average fatality rate is around 41.6 percent fall, which could cause a dramatic drop in food
(compared to 70 percent of infected people three prices. Also, the closure of ports with an associ-
months ago); it is highest in Guinea, at around ated decrease in the number of containers and
57.4 percent. The fatality rate among health work- vessels, and the increase in marine insurance pre-
ers is highest in Sierra Leone (79.5 percent) and miums affected the landed costs of imported food
lowest in Guinea (53.1 percent),1 which calls for an and non-food items. Moreover, foreign aid from
urgent need to ensure that they are adequately pro- the international community could lead to a de-
tected against the disease. There is evidence that preciation of local currencies, thereby raising the
the rate of infection has started to decline in Guin- local prices of imported goods and services. And
Figure 1: Confirmed cases, deaths and fatality rates as of 27 October 2014
8000
No. of confirmed cases Confirmed deaths
7000
6000
Fatality rate
5000
= 29.1%
Fatality rate
4000
= 38.1%
Fatality rate
3000
= 57.4%
2000
1000
0
Guinea Liberia Sierra Leone
Vol. 1, No. 4, 9 November 2014 27finally, the risk of fiscal deficit financing arising As a result of the EVD in Liberia, the annual over-
from pressure on spending and a decline in rev- all price movement (headline inflation rate) rode
enue collection could also put pressure on prices. from 8.0 percent at the end of the fourth quarter
The combined effects of the above together with of 2013 to 8.2 percent at the end of March 2014.
epidemiology and risk aversion behaviours could This further jumped to 10.3 percent at the end
weaken the purchasing power of the populations of the second quarter. A similar trend was also
and reduce their income. This could have a serious observed in Sierra Leone. As shown in Figure 2,
impact on their living conditions and livelihoods, in contrast to the downward trend since the last
thereby increasing poverty and vulnerability. quarter of 2011, the overall price level increased
consistently from 6.39 percent in April to 7.51
This Policy Brief examines the depth and dimen- percent in September 2014. With income remain-
sion of the impact of EVD on price movements in ing constant, the quantity of goods and services
Guinea, Liberia and Sierra Leone. that could be purchased fell by about one fifth in
Sierra Leone and by more than one quarter in Li-
The reduction in purchasing powers beria. The rising trend of prices in these countries
is stronger in Liberia and Sierra can be explained by: the disruption in agricul-
Leone than in Guinea tural activities (Kailahun and Kenema in Sierra
The response to the outbreak of the Consumer Leone and Nimba, Bong, Grand Bassa and Lofa
Price Index, a measure of overall price changes, in Liberia); the closure of Guinea’s borders where
varies across the three countries. Due to different substantial food imports originate; less commer-
policy initiatives and responses of governments cial trade flows from the main trading partners;3
and the reaction of international communities to pressure on the national currency resulting in a
the affected countries, the Index was relatively depreciation of the exchange rate; and partly due
volatile in Liberia and Sierra Leone, yet relatively to the fiscal deficit.
stable in Guinea.
Figure 2: Overall inflation and seasonally adjusted inflation in Sierra Leone
20
H eadline inflation
seasonally adjusted
18
H eadline inflation not
seasonally adjusted
16
14
12
10
8
6
01 04 07 10 01 04 07 10 01 04 07 10 01 04 07
2011 2012 2013 2014
28 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra LeoneFigure 3: Monthly price change in Guinea
1.4
2013 2014
1.2
1.0
0.8
0.6
0.4
0.2
0
Jan/ Feb/ March/ April/ May/ June/ July/ Aug/
Feb March April May June July Aug Sept
The aggregate money supply also rose, including Rural communities felt the burden
credit to governments to finance the deficit. For of price movements more than their
instance, money supply rose by 121.6 percent in urban counterparts
Sierra Leone between May and September 2014. Rural communities feel the effects of price move-
Furthermore, depreciation of the national cur- ments due to the impact of EVD on prices more
rency became pronounced from March in Liberia than urban communities. For instance, the overall
and from June in Sierra Leone.4 To a large extent, price change was less than 10.0 percent in Free-
this reduces the purchasing power of the local cur- town compared to almost 18.0 percent nationally
rencies in these countries. The cost of transport, – an indication that the situation in rural areas is
which more than doubled in affected regions, also worse than the national average. In Sierra Leone,
contributed to the hike in prices. there is also regional variation: the trend of price
movement was upward in the northern, eastern
In Guinea, the general Consumer Price Index rose and southern regions, whereas it declined in the
by 4.1 percent between March and September western region. Figure 4 shows that the increase
2014: the decline in purchasing power was mar- in prices is highest in the southern region – the
ginal. This trend is consistent with the seasonal province with the least number of infected cases.
rise at this time of year (Figure 3) and is within the Quarantine actions and restrictions of movements
projected annual inflation rate set at 8.5 percent, have weakened access to food. Depressed demand
which is also consistent with the macro-economic partly accounts for deflation (i.e. fall in prices) in
targets for 2014. Between January and September, the western region in the context of a supply of ag-
the corresponding monthly inflation rates in 2013 ricultural products that surpasses what could be
were generally higher than in 2014. This is an in- locally consumed due to a restriction of movement
dication that EVD has no discernible impact on of goods and people – lack of market access creates
prices in Guinea. a glut. A similar trend was also observed between
Monrovia and other parts of Liberia. For instance,
Vol. 1, No. 4, 9 November 2014 29Figure 4: Changes in prices (%) between February and September 2014 across regions in Sierra Leone
30
25
20
15
10
5
0
Western Northern Southern Eastern National
-5
-10
the price of a 25 kg bag of Bellaluna rice in Mon- ed between January and September 2014 against
rovia, which was US$17.5 in October, was sold for 396,000 tonnes for the corresponding period for
US$21.28 in the southeastern region. This implies 2013. This stemmed the possible impact of a short-
that the price that southeasterners paid for 25 kg fall in local production on prices. In Sierra Leone,
of Bellaluna rice was enough to secure Monrovi- there was mere 1.21 percent rise in the amount
ans around 30 kg of the same rice. Most remote spent on food items between May and September.
communities were quarantined, and the restricted The closure of Liberia’s and Sierra Leone’s borders
movement of goods and people did not allow im- also substantially reduced export of local rice from
ported items to reach marginalized communities, Guinea to these two contiguous countries. How-
which resulted in a high impact of EVD on prices ever, the heavy imports of food items are taking
in rural areas. The increase in prices has worsened a toll on Guinea’s foreign reserves, which requires
livelihoods, increased vulnerabilities and deep- some policy attention. Is the impact of EVD on
ened inequalities among individuals, groups and prices similar across commodities in these three
communities. countries?
Proactive management matters in The price effect is more severe on
reducing the impact on the people food items than on non-food items
The domestic production of rice, the most con- Price changes are more pronounced on food items
sumed staple, dropped by 10.0 percent, largely than non-food items in the three epicentre coun-
due to a 35.0 percent decline in harvest from the tries. Sierra Leone serves as an interesting example
Guinea Forest region, where around three quarters of diametrically opposed trends in price move-
of EVD infection cases occurred. Domestic rice ment for food and non-food items; in contrast
production covers 80.0 percent of national rice to the rise in prices of around one fifth for food
production. How did the Government of Guinea items, non-food items (excluding fuel) such as
respond to such a heavy drop in local produc- tobacco and narcotics, clothing and footwear de-
tion? Importing large quantities of rice was the clined by more than one quarter. During the EVD
winning strategy: 512,000 tonnes of rice import- outbreak, people focus more on basic items, thus
30 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra Leonedepressing demand for non-essential items such as active labour force narrows people’s consumption
electronics. For instance, in Sierra Leone, the price choices and reduces the quality of their standard
of an imported brand of rice (50 kg) rose from of living.
Le130,000.00 before the outbreak to Le170,000.00
during the outbreak, i.e. approximately a 30.8 per- Stemming the tide of EVD on future
cent increase. prices is doable
Some of the strategic interventions to achieve this
A similar trend was observed in Liberia. Prices include:
of food items between March and June increased
by 67.3 percent compared to just 13.1 percent for • In Guinea, Liberia and Sierra Leone, price
non-food items. The price of a 25 kg bag of Bellalu- shocks increase the vulnerability of the poor
na rice in Monrovia increased from $US14.5 by and the marginalized communities, especial-
the end September to US$17.5 in October, a 20.68 ly rural areas experiencing the outbreak. This
percent increase in just one month. The prices of calls for a well-targeted social protection for
local staples such as cassava, farina (gari) and oil people and communities heavily affected by
rose by 150 percent, 100 percent and 53.8 percent, price hikes.
respectively, from September to October alone.
There has been a similar trend for meat, flour and • The closure of borders reduces the supply of
sugar, and the prices of health items are also on a imported commodities that could compensate
rising trend. for the shortfall in domestic production. Coun-
tries should desist from closing their borders to
In Guinea, although price changes are marginal, in avert the inflationary impact of such actions on
general, when they do occur, the changes in pric- the epicenter countries.
es of food items are higher than non-food items.
Several factors account for the relative stability in • The Governments of these three countries
prices in Guinea: the decline in trade with the rest should strategically support local farmers to
of the country, the restriction of trade with the prepare for the next planting season to avoid
countries of the sub-region, and the distribution food shortages in 2015 and beyond. This in-
of large quantities of food to affected households cludes the provision of improved seedlings,
and communities by the international community. fertilizers and finances. It is also important to
In spite of the price stability, the high cost of local address all impediments that make locally pro-
rice relative to imported rice, which almost dou- duced rice more expensive than imported rice.
bled, deserves some policy consideration.
• The ministries of finance and central banks of
In these three countries, the panic purchase of these countries should effectively coordinate
food items and non-food products often used to fiscal and monetary policies to ensure that ex-
fight against EVD, such as chlorine, buckets and change rates and domestic borrowing do not
infrared thermometers, also contributed to the distort the price system.
diametrically opposed inflationary trends in Li-
beria and Sierra Leone. The opposite is the case • Given that EVD affected the planting seasons
for non-essential items such as electronics, which of these countries, the international communi-
declined by 40.0 percent in Liberia between June ty should scale up support for the provision of
and September 2014. The effect of rising prices food and related items to cushion the effect of
vis-à-vis constant or plummeting incomes of the food shortages and the associated price hikes.
Vol. 1, No. 4, 9 November 2014 31Vol. 1, No. 5, 28 November 2014
Vendors struggle with plummeting sales and rising cost of transporting goods to the market in West Point after the Ebola Outbreak and qurantine took effect in Liberia. (Photo: Carly Learson/UNDP)
The Ebola Virus Disease (EVD)
is threatening livelihoods
in Guinea, Liberia and Sierra Leone
32 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra LeoneA substantial reduction in EVD transmission
rate, but new outbreaks in previously
unaffected areas remain serious a concern
There has been mixed progress over the past two The knock-on-effect of EVD on livelihoods
months on the containment of EVD. The substan- is complex – from the loss of jobs and rising
tial reduction in the transmission rate, especially under-employment to low productivity and
in Guinea and Liberia, is a welcomed develop- reduced incomes
ment; yet new outbreaks in areas not previously The EVD impact on livelihoods takes many
heavily affected are damaging the gains made. For forms. EVD mortality and morbidity as well as
instance, there have been no new cases over the the associated restriction of movement of people
past three weeks in Guéckédou in Guinea, or in the and goods, and the closure of borders and mar-
district of Lofa in Liberia over the past two weeks, kets have disrupted households’ economic activi-
and a substantial decline has been witnessed in the ties, jobs and incomes. People’s primary sources of
last two weeks in Kenema and Kailahun in Sierra incomes and savings and loans schemes have been
Leone. However, the new transmission cases re- depleted, and food prices have been rising. Due
ported in south-eastern Guinea and in Montser- to limited or lack of access to jobs, livelihoods are
rado District in Liberia as well as the rising trend compromised. For example, many farmers cannot
in western and northern Sierra Leone remain a access their farms, and when they can, they lack
serious challenge. workers for planting and harvesting. The limited
supplies of goods and services as a result of the
The rising number of treatment facilities, the time- closure of borders and quarantine activities have
ly laboratory diagnosis of cases, and the capacity led to underemployment. Further, public health
to conduct safe and dignified burials play a crucial emergency by-laws prohibit certain activities,
role in halting EVD transmission. However, capac- including group farming in Sierra Leone and Li-
ity varies across countries. For instance, between beria; bars, night clubs and cinemas have been
20 October and 9 November, 72.0 percent of all re- closed; and the hunting of bush animals and the
ported patients with EVD were isolated in Guinea movement of motorbikes have been prohibited
compared to 20.0 percent in Liberia and 13.0 per- during specific times of the day, especially in Li-
cent in Sierra Leone. The bad condition of roads beria. The actively productive population are the
and highly centralized supply chain systems of Eb- most affected, particularly women, who earn most
ola facilities are serious impediments to effective of the household incomes and provide most of the
containment of the outbreak. As of 19 November family support. Finally, stigmatization is denying
2014, 15,145 confirmed, probable and suspected people access to jobs and new opportunities. Be-
cases of EVD were reported in six affected coun- cause of stigmatization, people find it difficult to
tries (Guinea, Liberia, Mali, Sierra Leone, Spain leave their communities to search for alternate
and the United States of America) and in two pre- sources of income. A photographer from Banjour
viously affected countries (Nigeria and Senegal), community, who opted to go to Monrovia because
with 5,420 reported deaths.1 Cases and deaths con- of lull in economic activities in his area, was de-
tinue to be under-reported in this outbreak. nied living his community.
Vol. 1, No. 5, 28 November 2014 33The most active and productive segment of had fallen since May 2014.3 The situation in Guin-
the labour force including women are being ea is similar – 83.0 percent and 99.0 percent of
decimated by EVD surveyed households from epicentre communities
The disease is unleashing havoc on the labour indicated, respectively, lower agricultural produc-
force. The economically active age group (15-49 tion and a decline in economic activities, includ-
years), which provides the largest proportion of ing agriculture, trade and transport. In the Guinea
household incomes and family support, has been Forest region, the drop in agricultural production
heavily hit by EVD. For instance, in Sierra Leo- is 30.0 to 75.0 percent depending on the various
ne, 65.13 percent of the affected people were in crops (rice, cassava, maize, palm oil, banana and
this group and there is a similar trend in Guinea. plantain). Moreover, around 50.00 percent of pota-
Women are important drivers of economic activity toes produced in Guinea are exported. The closure
in West Africa. The outbreak in Guinea, as in oth- of borders has denied farmers substantial incomes.
er countries, affects more women (53.0 per cent) This was further compounded by the glut in the
than men (47.0 per cent). Women’s special role market, which caused the price of potatoes to fall
in the family as caregivers at home and in health by approximately 33.0 percent. Vulnerability is
centres for sick people explains their vulnerability more pronounced in export-oriented agricultural
to EVD, which, however, varies across the regions. products.
For instance, 62.0 percent of the affected popula-
tion in Guéckédou and 74.0 percent in Télémilé Loan repayment is almost impossible –
are women. In Middle Guinea, 70 percent of the formal and informal loan schemes for women
people involved in the potatoes value chains are and local small business holders depleted
women. And in Liberia, women comprise over by EVD
half of the agriculture labour force and about two Women are more affected by EVD than men; the
thirds of the trade and commerce labour force.2 impact on their livelihoods is more severe. They are
Due to the strong contribution of women to eco- using their business capital and savings as a strate-
nomic activities in these countries, there is a pro- gy to coping with the hardship imposed by EVD,
nounced negative impact of EVD on productivity, which depletes their informal loans schemes.4 Evi-
jobs and income generation. dence from the Central Bank of Liberia confirmed
that access to microfinance loans or grants has
Income-generating opportunities proven daunting as result of EVD. For instance, the
are being eliminated, particularly in BRAC Microfinance Loan Disbursement, which
export-oriented sectors rose from LRD90.24 million in the first quarter of
The economies of these countries are decelerating. 2014 to LRD110.27 million in the second quarter,
Compared to earlier projections, real econom- was completely dried up in the third and fourth
ic growth between January and September 2014 quarters. This was caused by deaths, morbidity and
was estimated to fall by 2.1 percentage points in the loss of livelihoods, which made loan repayment
Guinea, 3.3 percentage points in Sierra Leone)ù practically impossible. Evidence from Loan Exten-
and 3.4 percentage points in Liberia. The recent sion and Availability Facility’s (LEAF) repayment
official adjustment in Sierra Leone was even more provides some illumination on the shrinking re-
precarious – a 6.3 percentage point decline. As payment capacities of loan recipients; it fell from
of September 2014, the Sierra Leonean economy LRD11.19 million in the first quarter of 2014 to
lost US$450.00 million. Agriculture, which con- LRD4.89 million, LRD1.78 million and nil in the
tributes around 57 percent to GDP, also declined second, third and fourth quarters, respectively
by 3.3 percentage points. Per capita income fell (Figure 1). People’s livelihoods are further threat-
by US$71.00 between January and October 2014. ened by the abolition of loan disbursement to lo-
Recent surveys reveal that around 97 percent of cal business owners. In Lofa County, for instance,
respondents surveyed indicated that their incomes women have not been able to repay their debts
from farming, petty trading and service delivery since July due to the fall in incomes, the loss of jobs
34 Socio-economic impact of Ebola Virus Disease in Guinea, Liberia and Sierra LeoneYou can also read
