According to the macro research conducted by the Standard Chartered Bank, Sierra Leone, Liberia, and Guinea, the worst-hit countries were facing economic headwinds.
“Even African countries where there are no Ebola cases are experiencing economic effects, owing to visa, travel and border restrictions on citizens of countries where Ebola has been found,” Standard Chartered noted.
“We estimate 2-5ppt output reductions in the three countries addressed here. As these countries are mining-dependent, growth revisions come on the back of expected production shortfalls. Disruptions to agricultural value chains are also considerations.”
According to the bank’s report, Sierra Leone’s mining and agricultural output were likely to be significantly affected by Ebola emergency measures.
“Iron ore production, which accounted for more than two-thirds of Sierra Leone’s 20 per cent real GDP growth in 2013, is expected to take a significant hit in 2014,” read part of the report.
The country’s fiscal deficit is expected to increase to at least 4.62 per cent of 2014 non-iron ore GDP.
Liberia is also likely to face slower mining growth in 2014 due to the outbreak that has claimed over 400 lives.
“The Liberian economy grew 8.7 per cent in 2013 on the back of increased iron-ore production. Although at least 50 per cent of real GDP growth in 2013 came from iron-ore output, a similar impact was not expected until 2017 when new iron-ore production was planned to come on-stream,” read the report.
Guinea, where the West African Ebola epidemic originated, is also expecting real GDP growth to drop two percentage point in 2014.
The report noted that the Ebola outbreak was not entirely to blame for revisions to Guinea’s real GDP growth forecasts.
“Political uncertainty and energy shortages were already constraints. Medium-term expectations of improved growth rested on the Simandou iron ore project, the investment framework for which was recently approved. The Guinean economy grew by a lacklustre 2.3 per cent in 2013 because of lower-than-expected mining and electricity production.”