UN: WB says Guinea, Liberia, Sierra Leone 'crippled' by Ebola impact

New York, US (PANA) - Although the Ebola epidemic has shown signs of slowing and confidence is growing about stopping the outbreak and reaching the target of zero new cases, a new World Bank Group report on economic impacts of the disease says its effects will continue to cripple the economies of hard-hit Guinea, Liberia, and Sierra Leone.

The report, entitled: "The Economic Impact of Ebola on Sub-Saharan Africa: Updated Estimates for 2015," was released on Tuesday ahead of the 2015 World Economic Forum in Davos, Switzerland.

Mr. Jim Yong Kim, President of the World Bank Group, said: "As welcome as these latest signs are, we cannot afford to be complacent. Until we have zero new Ebola cases, the risk of continued severe economic impact to the three countries and beyond remains unacceptably high."

He stated that, despite transmission rates in the three worst-affected countries showing significant signs of slowing, the Bank expected around US$1.6 billion of lost economic growth to be recorded in the three West African countries over the course of 2015.

The report pointed to a four per cent fall over 2014 in the 11.3 per cent growth rate projected for Sierra Leone before the crisis, while Guinea and Liberia are also expected to see large reductions, with the total fiscal impact for the three countries in 2014 topping US$500 million, about five per cent of their combined Gross Domestic Product (GDP).

It noted that, with investors steering clear, growth estimates for 2015 had also been revised down, stating that, Guinea and Sierra Leone were expected to see their economies contract by 0.2 per cent and two per cent respectively, while the predicted growth for Liberia had been reduced to three per cent.

It recalled that, pre-Ebola growth estimates for 2015 in Guinea were 4.3 per cent, in Sierra Leone were 8.9 per cent, and in Liberia were 6.8 per cent.

The three countries have a total forgone income in 2015 of around US$1.6 billion, with around US$500 million lost by Guinea, US$900 million by Sierra Leone and US$200 million by Liberia, which is more than 12 per cent of their combined GDP.

It, however, said that, despite its warnings, the new report revised the Bank's previous estimate of the probability of the epidemic's spread and the associated economic costs beyond the three most-affected countries.

The Bank gave thanks in large part to the intensive global and national responses over the past several months, noting that the projected downside scenario of US$25 billion in economic losses for 2015 no longer applied.

For sub-Saharan Africa as a whole, it said the range of downside risk extended from a low of US$500 million to a high of US$6.2 billion.

"Region-wide losses could be closer to the report's higher end estimate of US$6 billion if Ebola does spread beyond the three worst affected countries, while the minimum expected loss of US$500 million is attributed to eroded consumer and investor confidence since the outbreak, as well as disruption to travel and cross-border trade.

"Containment and preparedness efforts have dramatically limited the potential impact, as have public health improvements, such as safer burials, better detection, public awareness
campaigns, more health workers and facilities, and better contact tracing.

"At the same time, neighbouring countries have contributed to reduced risk of spread across borders having adopted fast and effective containment measures," the report stated.

Mr. Kim said the report demonstrated why all countries should make investing in pandemic preparedness a top priority for 2015.

He also noted that a major lesson from the outbreak was the need for much quicker global responses to disease outbreaks.

"It points to the need for a global pandemic emergency financing facility that will enable the world to respond much more quickly and effectively to any future deadly outbreaks, and avoid the tragic and unnecessary human and economic costs that have resulted from the Ebola epidemic," he added.

Meanwhile, the Bank Group is mobilizing nearly US$1 billion in financing for the countries hardest hit by the Ebola crisis.

This includes US$518 million from International Development Agency (IDA) for the epidemic response, and at least US$450 million from International Finance Corporation (IFC), a member of the World Bank Group, to enable trade, investment, and employment in Guinea, Liberia, and Sierra Leone.
-0- PANA AA/MA 20Jan2015

20 january 2015 20:32:14




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