Assessing and minimising the economic impact of the Ebola response

The Ebola virus is an urgent health crisis, but the economic impact is quickly demonstrating that it also merits close attention, writes Sasha Muench.

Liberia is one of three West African nations experiencing the most serious Ebola virus epidemic in history. So far over 3,000 people have died, nearly 7,000 are infected, and tens of thousands more are at risk. The economic costs are also significant. Since Liberia’s protracted civil war ended a decade ago, the country has achieved a measure of economic progress and stability; just prior to the outbreak of the Ebola crisis Liberia’s economy was growing at a rate of 5.9 per cent. A World Bank report (pdf) shows GDP growth has dropped to 2.2 per cent since the outbreak.

The bleak economic outlook is compounded in the short term by Ebola-containment protocols that are straining food security, market supply chains, and household incomes. In October, Mercy Corps conducted a rapid market assessment in Lofa and Nimba counties and parts of Monrovia to assess the economic impact. Key findings show:

• 66 per cent of households reported a decrease in household income
• 85 per cent of households reported eating fewer meals each day.

Agriculture activity has also dropped as the traditional labour-sharing system, known as kuu, has fallen apart. Traditionally, large groups of farmers exchange labour or pay for work on one another’s land. However, the government’s Ebola response plan included restricting gatherings of large groups of people. So, rather than the typical kuu of perhaps 50 people, some labour groups were reduced to just five or ten individuals at the height of the crisis in August.

Another significant finding showed that transportation restrictions limited the availability of goods in local markets. Liberia’s state of emergency, in effect over the past several months to deal with the Ebola outbreak, included restrictions on market days (particularly weekly markets in rural areas), border closures, curfews, checkpoints and reductions in the number of passengers allowed in vehicles. Night-time curfews meant that truckers could not get as far as they used to in a day and thus their productivity dropped. Restrictions on the number of passengers allowed in vehicles (both public and private) caused the per-person cost of taxis and transportation to rise, making it harder for farmers and small traders to carry their goods to market and still earn a profit.

Mercy Corps presented the assessment findings to the World Food Programme, the World Bank, and other agencies who were then able to use the hard data to advocate to Liberia’s government on the economic impact of the Ebola response. The advocacy paid off when Liberia’s government lifted the state of emergency on 13 November. While some controls, such as border closures, are still in place the vital rural weekly markets have reopened, easing the situation for vulnerable rural households. Curfew hours have also been reduced, increasing road traffic. This highlights the utility of conducting solid market assessments in crisis situations and the benefits of building coalitions for influence.

Read the assessment: Economic impact of the Ebola crisis on select Liberian markets, Mercy Corps, October 2014.

Sasha Muench is Director of Economic and Market Development for Mercy Corps, where she is responsible for strategic development of Mercy Corps’ global approach to market development, including institutionalizing systems thinking and spreading adoption of best practices across all programs.  Mercy Corps fosters appropriate economic development in some of the world’s most challenging places. Working in over 40 countries, with a total program value of over $440 million, the agency engages with public, private and civil-society actors to increase incomes, reduce expenses, and build resilience of the poor and most vulnerable.