The outbreak was reported in March just when people begin to take their vacations and travel with their families
August 19, 2014: Owners of businesses are raising concerns over the economic impact of the Ebola virus, as business travelers cancel visits over fears of contracting the disease that have left more than 1,000 dead across Guinea, Liberia and Sierra Leone since the outbreak in March. Five persons have died of the disease in Nigeria.
With a fatality rate of up to 90%, the World Health Organisation (WHO) says Ebola is one of the world’s most virulent diseases. The infection is transmitted by direct contact with the blood, body fluids and tissues of infected animals or people, according to the WHO.
Africa’s most populous country joined the list of Ebola-hit nations when a Liberian-American flew into the country with the virus, infected health workers and died in a Lagos hospital on July 25. Nigeria now has 12 confirmed cases of Ebola.
As the government battles to contain the spread, travel to the affected west African countries have suffered a drop.
In Nigeria, that drop is affecting business owners like Hassan Zakare, a tour operator and tourism consultant. Zakare runs Leisure Afrique, a destination management company with focus on inbound travels.
“We had some investors who were supposed to do some projects in real estate, construction and hotel development. They were to come into Nigeria and look at sites for those projects. But unfortunately, it’s now on hold pending the outcome of the success or otherwise of the fight against Ebola.
“Now if this fight goes on for one year, it means we will be in limbo for the next one year. Those projects will not take off. Money that we are supposed to make from those projects will not be made. Those are revenue lost.”
If the investors’ trip had sailed through, Zakare would have made between $3,000 to $5,000 on commissions from hotel accommodation and other tour packages. That’s the kind of money he gets on a fairly regular basis, helping him to pay staff salary and maintain his offices in Lagos and Abuja.
But as the Ebola scare forces potential clients to cancel trips, Zakare is embarking on cost cutting measures to ensure he remains in business. Those measures include relocating to a cheaper Lagos office.
“Business has been slow,” Zakare said. “It’s part of the primary reason why we are moving. This office occupies a four bedroom duplex. But we don’t need it any more because of the huge cost. We are moving to a smaller two bedroom apartment. Business has dropped so I need to move with the tide.”
Travel and tourism worst hit
“It’s a disaster for us in the travel and tourism industry,” Lucky George, national publicity secretary of the Federation of Tourism Associations of Nigeria, said. “Don’t forget we are in the peak of the summer, the period when most people take their vacations and travel with their families. They stay in hotels and also patronise recreational facilities.”
The outbreak of Ebola in west Africa forced several airlines to suspend operations to the affected countries. Nigeria’s Arik Air, the dominant airline from the sub region, is one of them.
“We expect revenues in the aviation sector to plunge downwards, which would affect both the airlines and the support industry (handling companies, oil marketers, catering, duty free shops),” Financial Derivatives, a diversified financial services firm, wrote in its report.
According to the firm, the economic impact of the Ebola scare will be felt most in the aviation, hospitality and tourism, trade, medical and agriculture sectors. “An analysis of these sectors’ contribution to Gross Domestic Product (GDP) shows that Nigeria may lose about $2 billion in the first quarter of the outbreak.”
Hassan Zakare, who runs Leisure Afrique, is shifting his office from a four bedroom duplex to a two bedroom apartment
Impact on affected countries, trade and ECOWAS
The Economic Community of West African States (ECOWAS) supports and encourages the free movement of persons within the region. But the outbreak of Ebola has restricted movement. “Give or take, that will have a major impact on trade,” Jide Fadahunsi, a Lagos-based analyst with an investment banker, said. “There are people who, for instance, ship to neighbouring countries as they bring in their goods to Nigeria by road. If the crisis worsens, that’s going to cause a drag on the economy.”
Fadahunsi, however, believes the economic impact of the Ebola outbreak remains insignificant in Nigeria. “To have a significant impact, there will need to be thousands of cases, so many that the labour market will be affected,” he said. “For now, I don’t see that happening as Nigeria has been able to contain the situation.”
While the larger Nigerian economy appears unshaken by the Ebola scare, the situation remains different in Guinea, Liberia and Sierra Leone — fragile economies — where the World Bank said agriculture had been hit with workers abandoning farming areas in affected zones. A food crisis looms.
Mining firms such as Australia’s Tawana Resources have shut down non-essential operations because of risk from the Ebola outbreak. Liberia’s finance minister Amara Konneh wrote on Wall Street Journal: ”When this crisis ends, Liberia and her neighbours will need international assistance to rebuild their battered economies.”
Measures to contain spread
The Gambia, a major tourism hub in west Africa, has banned flights from the Ebola hit nations. A number of regional carriers have also been forced to cancel flights to capitals of the affected countries. In east Africa, Kenya suspended entry of passengers from Guinea, Liberia and Sierra Leone. Nigeria was excluded from that ban.
WHO is discouraging the imposition of blanket bans on trade and travel on Ebola-hit countries, as it maintains the transmission risk from flying is low. At the beginning of this week, the UN health agency called on Ebola-affected countries to begin screening of all passengers leaving through international airports, sea ports and major ground crossings. Authorities in these countries say they are implementing the measure.
Nigeria, Africa’s biggest economy, appears to be making progress in containing the spread of the Ebola virus disease.The health ministry on Monday said five patients have completely recovered and are now certified free of the disease. Government is, however, refusing to hold back. “Our strategy is to prepare for the worst by making plans to expand facilities to take any new cases while we hope for the best,” Lagos State governor Babatunde Fashola said.