Yahoo Finance Moody's: Ebola Risks Economic Ramifications
A report from a leading ratings agency today has warned that Ebola could have "significant economic and fiscal ramifications" for a number of west African countries.
Over 1000 people have died since February in west Africa's Ebola outbreak, as the World Health Organisation announced 56 deaths and 128 new cases in the two days to August 11th.
As West African governments and global healthcare organisations fight the disease, concerns were raised about the economic threat of the epidemic on Thursday by credit rating agency Moody's.
Combined with increased health expenditure, it predicts the pressure on government budgets could jeopardise economic growth across the region.
Last week, Nigeria became the latest country in the region to declare a state of emergency, following the second death from 11 confirmed cases within its borders.
Nigeria is the largest oil producer on the continent and the twelth-largest producer in the world, with international companies such as Exxon, Chevron, Shell (LSE: RDSB.L - news) , ENI (NYSE: E - news) and Total (NYSE: TOT - news) operating there.
Senior (Other OTC: SNIRF - news) credit officer at Moody’s in London Matt Robinson, who wrote the report, warned: "If a significant outbreak emerges in the Nigerian capital of Lagos, the consequences for the West African oil and gas industry would be considerable."
Mr Robinson said: "Any material decline in production would quickly translate into economic and fiscal deterioration."
Moody’s expects commercial and transport disruptions in the wider West African region to last for at least the next month.
The US Centers for Disease Control and Prevention advised against all non-essential travel to Guinea, Liberia and Sierra Leone last month.
British Airways and Emirates are amongst the international airlines to have suspended flights to West Africa.
The Moody’s report warned that it expects Ebola to have an impact on revenue generation in the region “where budgets are already hindered by low tax collection”.
An assessment from the World Bank and International Monetary Fund in June predicted that GDP growth in Guinea will fall from 4.5% to 3.5% as a result of the epidemic.
The Liberian Minster of Finance Amara Konneh has said that Ebola-related expenses in the second quarter cost $12 million, a figure which will increase in line with the epidemic’s escalation.
Sierra Leone is extremely reliant on its mining sector. Should Ebola have an impact on production, Moody's has said GDP growth could fall from the 16% recorded in 2013.
The report comes as the World Health Organisation classified Kenya, in East Africa, as a "high-risk" country for the spread of the virus due to its transport links with West Africa.
Ebola Virus Disease has a case fatality rate of up to 90%, according to the World Health Organisation. Severely ill patients require intensive supportive care, and no vaccine is available for use.
