Nigeria’s finance minister Ngozi Okonjo-Iweala says the Ebola virus is having a negligible impact on her country’s economy, but the Boko Haram insurgency is eroding growth prospects.
“We’re anticipating about 6.5%, discounted for the impact of the insurgency in the northeast,” Ms. Okonjo-Iweala said in a recent interview. She said the conflict has taken off about half a percentage point of gross domestic product this year and is expected to drain a similar amount from the economy next year.
The International Monetary Fund had previously forecast gross domestic product to expand by 7.1% this year and 7% in 2015.
The militant Islamist group has taken over scores of towns and villages across the northeast corner of Nigeria, including Borno state’s second largest city, waging a campaign of bombings, abductions and killings that is crippling local growth.
The government in Abuja hasn’t been able to quell the insurgency despite launching a barrage of air strikes against the group.
But President Goodluck Jonathan has been far more successful at preventing the deadly Ebola endemic that has ravaged the nearby states of Sierra Leone, Liberia and Guinea.
“We’ve contained Ebola, so there’s minimal impact” on the economy, the finance minister said.
The three West African nations worst-hit by the virus are suffering from a death toll mounting well into the thousands. The IMF says the countries are on the verge of economic collapse as the crisis overwhelms their budgets and slams the economy. Fear of the virus has prompted farmers to abandon their fields, shop owners to shutter their stores and manufacturers to cut output.
But Nigeria has had only seven deaths out of 19 Ebola cases, the minister said. The U.S. Centers for Disease Control and Prevention Tuesday said the outbreak is nearing its possible end in the country. Africa’s largest economy has a health care system that was able to screen and isolate cases. A public information campaign using the country’s network of 125 million mobile phones has also proved effective.
Ebola’s having some economic impact beyond the borders where the virus has taken root. Antoinette Sayeh, IMF’s African department director, said countries neighboring the three worst-affected nations, especially Gambia and Senegal, are taking a hit to tourism because of cancellations driven by the virus. Transport hubs like Kenya and Ghana were also affected.
But provided the outbreak is contained as hoped, Ms. Sayeh said the baseline outlook for sub-Saharan Africa remains “very favorable.”
Still, Ms. Okonjo-Iweala is concerned about the potential fallout from the crisis as investors fear the epidemic’s reach across the region. There have been only a small number of cases outside of Sierra Leone, Liberia and Guinea. The three states represent 5% of the West African economy, and yet the Ebola crisis is often reported, at least in headlines, as the entire region’s problem.
“This kind of sweeping characterization is a danger,” Nigeria’s finance minister said. “We need some differentiation. West Africa is 18 or 19 countries.”
It could wipe out billions of dollars’ worth of investment as foreign investors are scared off, she said. “Some insurance companies are saying to foreign investors, ‘No, we won’t insure your staff if you go there because they’re telling us Africa has Ebola,’” Ms. Okonjo-Iweala said.
That’s why she argues it’s not premature for the U.S. to move ahead with plans to forge stronger commercial ties with Africa.
“It’s problem in three countries out of 54, so the partnership is still valid,” she said. “We still have great opportunities on the continent and the private sector should not lose sight of that.”
The World Bank, the CDC and World Health Organization officials warn that if authorities can’t get the Ebola epidemic under control in the coming months, it could metastasize.
“If it takes longer to contain, or even potentially spreads, then we’re in a different world,” the IMF’s Ms. Sayeh said.
Author: Chief Editor
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