Via The Globe and Mail, a report by Geoffrey York: Ebola fears dragging down African economies. Excerpt:
Ebola was one of the main reasons the International Monetary Fund reduced its growth estimate for Africa this week, forecasting 5-per-cent growth this year instead of the 5.5-per-cent expansion that it had predicted in April.
Trade, tourism and investment confidence in Africa are being “severely affected,” the IMF said this week. “A more protracted Ebola outbreak or a wider extension of the epidemic could have severe consequences for the economy of the region.”
Earlier this month, the World Bank warned that the Ebola crisis could inflict $33-billion (U.S.) in damage to West African economies by the end of next year if it continues to escalate. But its researchers now admit that the $33-billion figure could be an underestimation.
“The epidemic is moving faster than we economists can work,” said a blog last week by World Bank senior economist David Evans and Center for Global Development senior fellow Mead Over.
“The latest information suggests that even the World Bank’s ‘High Ebola’ scenario may be optimistic,” they said. They cited especially the effect of “aversion behaviour” – the fear factor that leads to closed borders, reduced trade, suspended airline flights and the curtailing of commercial activities by multinational companies in West Africa.
The latest Ebola cases in Spain and Dallas “generate aversion behaviour towards Africa which threatens to persist and damage African economic growth for years to come,” the two economists said.
Many multinational companies and foreign investors have cancelled visits to Africa or suspended activities and withdrawn employees from West Africa.
Perhaps the worst example of “aversion behaviour” is in the tourism industry. Hotel bookings have dropped in tourism-dependent countries such as Gambia, despite the absence of Ebola cases. And thousands of foreign tourists have cancelled safari vacations in East Africa and Southern Africa, even though those regions are far from the Ebola-afflicted countries and have not experienced even a single Ebola case in the current outbreak