World Economy

Ebola: Out of the news but still hitting Africa

Ebola: A survivor's story
Ebola: A survivor's story

Ebola briefly returned to the headlines this week with a scare at a hospital in New York, but the deadly virus continues to claim victims in West Africa, dealing a devastating social and economic blow to some of the world's poorest countries.

However, the epidemic, which is now in its second year, has also highlighted the surprising resilience of other nations in the region.

"The public is not always aware of what's happening in West Africa, but we're still seeing 20 to 30 new cases of the disease in Sierra Leone and Guinea every week and Liberia had a resurgence recently," Kent Brantly, an American doctor who survived Ebola after contracting it from patients in West Africa, told CNBC on Tuesday.

Although the epidemic has waned from its peak at the end of last year, when hundreds of new cases were diagnosed every week, it has so far proved impossible to eradicate completely. Concerns exist that the epidemic may never be fully eliminated.

John Moore | Getty Images

The World Health Organization (WHO) estimates that over 27,000 people have contracted Ebola since December 2013, of which more than 11,000 have died. Symptoms include bleeding from multiple orifices, severe weight loss and red eyes. There is currently no cure.

The vast majority of victims are from the three countries at the center of the epidemic, namely, Sierra Leone, Guinea and Liberia. Thirty news cases were reported in total in these countries in the week to July 12, 2015, with Sierra Leone posting a one-month high of 14 new sufferers, according to the WHO.

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"What we really learnt from this is that the healthcare apparatus, particularly in the most affected countries was very poor and unprepared and unready to cope," Charles Laurie, head of Africa at risk consultancy Verisk Maplecroft in the U.K., told CNBC.

Notably, Ebola reappeared in Liberia at the end of June, with six cases reported in the two weeks to July 12—even though the WHO designated the country free from the epidemic in May.

Low income, middle income chasm

Analysts and investors in the region said that the epidemic—by far the worst on record—had highlighted the gap in healthcare systems between richer and poorer countries in Africa. One example of a richer country recovering quickly from an outbreak is Nigeria.

Ebola arrived in Nigeria in July last year in a Liberian-American whose sister had recently died of the disease.

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However, despite fears of cases proliferating across sprawling, overcrowded Lagos, authorities in Nigeria quickly identified people who had been in contact with the victim and physically monitored them on a daily basis for the 21 day incubation period. The result was that only 20 Nigerians caught the virus.

A pharmacist searches for drugs in a pharmacy in Lagos, Nigeria, July, 2014.
Pius Utomi Ekpei | AFP | Getty Images

Laurie said that Nigeria had emerged from the outbreak "relatively unscathed, with very few long-term implications for its economy."

Melissa Cook, managing director of U.S.-based African Sunrise Partners, said that business had been relatively unaffected during the crisis in Nigeria, as well as in Ghana, where a suspected Ebola case proved a false alarm.

"In our trips to Nigeria and Ghana last month and last year, we saw caution in the form of airport temperature checks and lots of hand sanitizer dispensers—but otherwise business is proceeding normally (and did so throughout the crisis)," Cook told CNBC.

Both Nigeria and Ghana are categorized as lower-middle income countries by the World Bank, with gross national incomes per capita of $2,950 and $1,620 respectively in 2014. In comparison, the three countries worst hit by Ebola—Liberia, Guinea or Sierra Leone—had gross national income per capita of between $400 and $720 in 2014—making them among the poorest in the world.

Cook suggested that Nigeria and Ghana might be more representative of African countries' public health systems than Liberia, Guinea or Sierra Leone.

"Most African countries have stronger public health systems than those in the Ebola-affected countries, and have been able to contain any spread to a very limited group of people," she told CNBC.

Sierra Leone GDP to shrink by a quarter?

In April, the World Bank estimated that Ebola would knock a total of $2.2 billion off the gross domestic product (GDP) of Sierra Leone, Guinea and Liberia through 2015. This is a staggering blow given that the three countries' economies were only worth respectively $4.1 billion, $6.1 billion and $2.0 billion in 2013.

"These are small, highly vulnerable economies… with very little elasticity to absorb these kinds of unanticipated costs," Laurie told CNBC.

Sierra Leone is seen as worst hit economically, with the World Bank forecasting a $1.4 billion knock to GDP.

It forecast Sierra Leone's economy would shrink by nearly one-quarter in 2015, with its crucial mining sector "mostly shut down" and contracting by 95 percent.

In contrast, Guinea's economy was seen in a far milder contraction of 0.2 percent, while Liberia's economy was forecast to grow by 3.0 percent.

"Important differences among the three countries are emerging. Liberia is gradually returning to normalcy, Guinea's economy is stagnating, and Sierra Leone is suffering a severe recession," the bank said.

Risk of waning aid, future epidemics

The disease's visceral symptoms, plus the backing of big names on the development scene such as former U.K. Prime Minister Tony Blair, have helped propel it to the attention of international media, governments and aid organisations.

As of July 7, 2015, the World Bank has mobilized $1.62 billion to fight Ebola, including $260 million for Guinea, $385 million for Liberia and $318 million for Sierra Leone. The funding is to help pay for supplies, drugs and staff, and assist governments.

"We believe these three countries will need to continue to rebuild their healthcare system and may have to deal with some collateral damage from the disease, such as disruptions in food supply and trade flows, in the short term," Andy Chen, principal at Nile Capital Management, an asset management firm specializing in Africa in Princeton, NJ, told CNBC.

Laurie warned that the countries concerned remained vulnerable to further outbreaks and could face more difficulties once the epidemic fell off the global radar.

"Through the major intervention of international organizations, these healthcare systems have somewhat improved and have been able to largely contain the disease. But they are also severely battered… Do they have resources to properly equip their healthcare should it reoccur?" he said.

"To what extent will these healthcare systems be prepared down the road?" Laurie added.

Tourism blow spans eastwards

Chen told CNBC that countries with no active Ebola cases, such as Nigeria, could expect no further economic impact this year. However, other experts suggested that countries as far afield as Kenya on the east coast of the continent could feel the heat via falling numbers of tourists, who mistakenly viewed the epidemic as Africa-wide rather than localised.

"Many other African countries have seen a drop in tourist arrivals—despite the fact that they are thousands of miles away from the affected countries and have had zero cases of Ebola during this outbreak," said Cook.

Laurie warned that the drivers of an epidemic of Ebola or another contagious disease were still in place, namely low-grade health systems, very porous country borders and highly interconnected regional infrastructure.

"The risk of a future epidemic is still very much a regional issue that could occur further down the line," he said.

—By's Katy Barnato. Follow her on Twitter @KatyBarnato.