Ebola: The economic impact


With more than 1,300 reported deaths from Ebola in West Africa, the hemorrhagic disease which can kill up to 90% of those it infects has provoked a mounting health crisis, but it is also having a devastating impact on the economies of Guinea, Liberia and Sierra Leone.

Ebola virus virion (Public Health Image Library)

All three West African nations are already poor, but the Ebola outbreak could make them even poorer. Sierra Leone and Liberia have both emerged from horrific civil wars and managed to rebuild their economies. Liberia has been trying to revive its mining sector which before the civil war accounted for more than half its export earnings. But now there are fears that all the good work that has been achieved since those conflicts could be destroyed.

Sierra Leone’s Agriculture Minister Joseph Sam Sesay told the BBC that the economy had been deflated by 30% because of Ebola, with the agricultural sector the most impacted in terms of Ebola because about 66% of people in Sierra Leone are farmers. Mr Sesay described how farms are being abandoned by people running away from the epicentres and going to areas that don’t have the disease.

Twelve out of 13 districts in Sierra Leone are now affected by Ebola, although the epicentres are in the Eastern Province near the borders with Liberia and Guinea. Road-blocks manned by police and military are preventing the movement of farmers and labourers as well as the supply of goods.

Although the United Nations Development Programme (UNDP) chief co-ordinator David McLachlan-Karr thinks that the road-blocks are absolutely crucial to containing the outbreak, he admits agriculture in Sierra Leone has been brought to its knees.

“We are now coming into the planting season which means a lot of agriculture is not happening, so down the line that will create food shortages and pressures on food prices. We are starting to see a rise in inflation and pressure on the national currency as well as a shortage of foreign exchange,” he told the BBC.

The UNDP has appealed for $18m to bolster Sierra Leone’s health system but the UN’s Food and Agriculture Organisation (FAO) and World Food Programme (WFP) will also be asking for a further $60m to help the government deal with food shortages and its farmers cope with the crisis.

In Guinea and Liberia the economic predictions are also causing concern. The World Bank said it was expecting GDP growth in Guinea to fall from 4.5% to 3.5%.

The Liberian economy had been expected to grow by 5.9% in 2014 but the country’s Finance Minister, Amara Konneh, said this was no longer realistic due to a slowdown in the transport and services sectors and the departure of foreign workers because of Ebola. Steel giant ArcelorMittal has halted work at its iron ore mines in Liberia after some of its staff were evacuated. The mining firm said contractors working to expand its Yekepa and Buchanan mines had declared “force majeure” and were moving people out of the country.

The closure of borders in West Africa and the suspension of flights are also having a detrimental effect on trade, severely limiting the ability of countries to export and import goods.

Recent examples are the closure of Cameroon’s border with Nigeria and the announcement by Kenya Airways that it is suspending flights to and from Sierra Leone and Liberia. Equatorial Guinea’s  national airline Ceiba International has suspended until further notice all of its flights to Accra, Ghana, Lome in Togo, Abidjan in Cote d’Ivoire, Dakar in Senegal and Cotonou in Benin. The Equato-Guinean government has also stopped issuing visas to West African citizens wishing to visit until further notice. Arik Air, Asky, British Airways and Emirates have suspended flight operations to and from any of the Ebola affected countries. Saudi Arabia also suspended the issuing of visas to Muslim pilgrims from West African countries. Serious screening for Ebola has also begun at several international airports before passengers are allowed to board an airplane.

In Sierra Leone, commercial banks have reduced their hours of business by two hours to reduce contact with clients and the country’s tourism industry has taken a severe knock – some hotels are empty and are laying off staff.

Impact on Tourism

Tourism elsewhere is feeling the effects too. According to Reuters, the outbreak is putting off thousands of tourists who had planned trips to Africa in 2014, especially Asians, including to destinations thousands of miles from the nearest infected community such as Kenya and South Africa. Visitors from the United States, Brazil and Europe have also scrapped their plans altogether or delayed their trips.

There is a problem of perception – and geography. Hannes Boshoff, managing director of Johannesburg-based ERM Tours, says. “A lot of consumers just see Africa. They see it as one country … I try and tell people that Europe and America are closer to the Ebola outbreak than South Africa”.

This month, one Brazilian business delegation cancelled a trip to Namibia, in southern Africa.

Thompsons Africa said it had also seen the biggest cancellations from Asian clients but recently had a luxury group of US tourists withdraw, which will cost the South African travel firm 500,000 rand.

Intense media cover has magnified fears, although no current Ebola cases have been confirmed anywhere in the world outside Sierra Leone, Liberia, Guinea and Nigeria. Two suspected Ebola cases in South Africa in August tested negative.

The national tourist agency South Africa Tourism sought to reassure travellers.

“Any contagious disease will have an impact anywhere in the world, whether it was happening in Asia or in America it would have been the same thing,” chief executive Thulani Nzima told state television.

“The message is: come enjoy South Africa, it is definitely Ebola free.”

Lagos-based financial advisory and research firm, Financial Derivatives Company Limited (FDC), has forecast that Nigeria – now the continent’s largest economy – may lose about $2bn to the Ebola outbreak, Nigerian newspaper This Day reported on August 18th.

In a report entitled: “Making Economic Sense of the Ebola Scare,” it listed sectors that would be impacted to include aviation, hospitality and tourism, trade, medical and agriculture. Analysing these sectors’ contribution to the country’s GDP, it stated that though the chance of the outbreak going into a second quarter was very slim, it could extend the loss to $3.5bn.

Ratings agency Moodys said, “Whilst a small part of the Nigerian economy is already benefiting from the Ebola scare such as shop owners selling sanitisers, a larger part is experiencing losses”.

“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, etc.),” the report also stated.

Commenting on the impact on the hospitality and tourism sector, it said preliminary information showed that many hotel and airline bookings in Lagos had been cancelled by in-bound travelers.

“This is not surprising since India and Greece have openly advised their citizens to avoid non-essential travel to Nigeria and other Ebola-affected countries. It is estimated that restaurant visits in Lagos have already declined by 50%. The accommodation and food services sector was approximately one per cent of total GDP in first quarter 2014.

Dianna Games, chief executive of Johannesburg-based consultants Africa@Work, thinks Nigeria is the only affected country that has the health system and infrastructure to deal with Ebola. At the moment there have only been 12 confirmed cases, all of which were linked to the death of one man from Liberia in July.

She says fears about the virus could damage Africa’s economic revival of recent years.

“Ebola has made a dent in the Africa Rising narrative,” she told the BBC. “The stereotypes of Africa as a place of poverty and disease have started to re-emerge again.”

However, In the long run, Ms Games believes history will view the 2014 Ebola outbreak as a temporary blip rather than a permanent U-turn in the continent’s fortunes.

“The fundamentals pushing this Africa Renaissance are still there,” she said.

Meanwhile, the African Development Bank (AfDB) has given $60m in budgetary aid to the affected countries, Radio France Internationale on August 19th. Bank president Donald Kaberuka told a news conference the aid would go towards making it possible to pay health personnel and equip monitoring systems.

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Egypt: New Suez Canal project is launched


Multi-billion dollar infrastructure project expected to boost Egyptian economy

President Abdel Fattah al-Sisi launched the construction of a US$4 bn “new Suez Canal” on August 5th that aims to speed up traffic along the existing waterway and boost Egypt’s battered economy.

The project foresees the creation of one million jobs at a time when Egypt is struggling to recover from more than three years of political turmoil since the ouster of long-time autocrat Hosni Mubarak.

Sisi, accompanied by government ministers and army generals, set an ambitious target of digging the new canal, which would run parallel to the original Suez Canal built 145 years ago.

“No matter what it takes, this project must be finished in a year. That is what Egyptians expect,” Sisi said at an inauguration ceremony in the Suez Canal city of Ismailiya.

Officials said the new waterway would be funded by Egyptian and foreign investors.

Sisi said 500m shares in the project would be offered to domestic investors at a rate of E£100 (about $14) each, and $100 per share for expatriates.

The canal would be constructed by 17 private Egyptian companies under “the direct supervision” of the armed forces, said Sisi.

In a colourful ceremony broadcast live on state television, Sisi was accompanied by men, women and children as he blasted away a mound of sand symbolising the start of work on the canal. Shortly afterwards, hundreds of men were seen digging with shovels to loud music playing in the background.

The project was initially to be constructed during the rule of now deposed president Mohamed Mursi, backed by funding from Qatar, whose ties with Egypt have deteriorated since the Islamist’s ouster in July 2013.

Dubbed the Suez Canal Axis, the new 72-kilometre project would run part of the way alongside the existing canal that connects the Red Sea to the Mediterranean.

It will involve 37 kms of dry digging and 35 kms of expansion and deepening of the existing Suez Canal, which will help to speed up the movement of vessels.

“The total cost of digging the new canal is E£29 bn ($4 bn),” said Mohab Memesh, head of the Suez Canal Authority. “It is expected to provide more than one million job opportunities and will turn Egypt into an industrial, mercantile and logistics centre.”

Construction of the existing Suez Canal, which is 193 kms long, took 10 years and ended in 1869.

One of the world’s most heavily used shipping lanes, the Suez has been a key source of international trade, earning Egypt billions of dollars in annual revenues. Around 16,600 ships passed through it in 2013.

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Kenya: Lamu port project launched


Kenyan President Uhuru Kenyatta launched a construction deal for the first berths in a proposed multi-billion dollar port on August 1st.

The planned US$24 bn Lamu port project, due to be finished by 2030, is intended to serve much of east Africa, with oil pipelines to South Sudan and railways to Ethiopia and Uganda from the Indian Ocean coast.

But the area has been hit by a recent wave of deadly attacks, largely claimed by Somalia’s Al- Shabaab militants but which Kenyatta has blamed on “local political networks”.

Kenyatta said he had approved a $480m deal with a Chinese company for the first phase of construction of three of the 32 berths planned for the flagship project.

“The signing of this contract… is a major milestone,” Kenyatta said in a statement, claiming it would make Kenya the “most attractive transport and logistics hub” in the region.

The project, known as LAPSSET — the Lamu Port South Sudan-Ethiopia Transport Corridor — includes not only a giant seaport to complement Kenya’s hugely overstretched main port in Mombasa, but also a railway, airport and refinery project.

Kenya has set aside $50m “to immediately commence” building by state-run China Communication Construction Company, Kenyatta said.

Officials said construction at the port — which has seen little activity since it was formally launched in a ceremony in March 2012 — would begin as soon as September. The port alone is projected to cost $3 bn.

Under the plans, the port will be able to handle some 24m tonnes of cargo a year from giant container ships, as well as provide infrastructure to support oil discoveries made in Kenya’s arid north.

“Our country must develop the additional transport and infrastructure capacity to harness the immense mineral wealth that our country is now discovering,” Kenyatta added.

The port zone is close by the UNESCO-listed tourist island of Lamu, once popular with high-paying visitors and Hollywood celebrities, but now off limits according to most travel warnings issued by Western nations.

Kenya’s Mombasa port currently serves the landlocked nations of Burundi, Rwanda, Uganda and parts of the Democratic Republic of the Congo.

But the port is overstretched and businesses complain of delays to clear cargo, a particular problem as it is facing growing competition from ports in neighbouring Tanzania.

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Ugandan Court invalidates homosexuality law


A Ugandan court on August 1st annulled tough anti-gay legislation signed into law by President Yoweri Museveni in February. Activists erupted in loud cheers after the court ruled the law is now “null and void.”

Ugandan lawyer Ladislaus Rwakafuuzi, an attorney for the activists, said the ruling “upholds the rule of law and constitutionalism in Uganda.”

The anti-homosexuality law punished gay sex with long jail sentences. Homosexual acts were already illegal in Uganda, but the new law also banned the promotion of homosexuality and covered lesbians for the first time. Ugandans opposed to the law filed a constitutional petition alleging that the law violated fundamental rights.

“I can confirm the anti-homosexuality law has been struck down. The judge said there were irregularities in the process of its enactment and also there was no quorum in parliament,” said Nicholas Opio, a lawyer for the petitioners.

The panel of five judges at the Constitutional Court said the speaker of parliament acted illegally in December when she allowed a vote on the measure despite at least three objections over lack of a quorum.

Although the legislation has wide support in Uganda, it has been condemned in the West and rights groups have described it as draconian. Several donors cut aid to Uganda after the law was adopted.

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Sudan: Meriam Yahia Ibrahim flies to Italy


A Sudanese Christian woman who was sentenced to death for renouncing Islam, then acquitted after intense international pressure, arrived on July 24th in Italy with her family en route to the United States.

Meriam Yahia Ibrahim Ishag was greeted in Rome by Italian Prime Minister Matteo Renzi and his wife as well as Foreign Minister Federica Mogherini.

“Today is a day of celebration”, Renzi said.

Italian Deputy Foreign Minister Lapo Pistelli, who accompanied the family on the flight to Rome, tweeted a photo of the young mother aboard the plane cradling her infant daughter as her toddler son drank from a bottle.

“Mission accomplished,” he wrote.

Pistelli said Pope Francis had been informed of Ishag’s arrival, and that a meeting between the pontiff and the Sudanese woman was possible.

A global outcry erupted in May after Ishag was sentenced under Sharia law to hang for apostasy.

Days after her conviction, the 26-year-old gave birth to a second child in prison.

Ishag’s conviction was overturned in June, but she was immediately rearrested while trying to leave Sudan using what prosecutors claimed were forged documents.

Two days later, Ishag was released from prison and she and her family — including her American husband Daniel Wani and the two infant children — took refuge in the US embassy.

Ishag was born to a Muslim father who abandoned the family, and was raised by her Ethiopian Orthodox Christian mother. The Roman Catholic Archdiocese of Khartoum says Ishaq joined the Catholic church shortly before she married in 2011.

She was convicted under Islamic Sharia law that has been in force in Sudan since 1983, and that says Muslim conversion to another faith is punishable by death. The court had also sentenced her to 100 lashings because under Sharia law it considered her union with her non-Muslim husband to be adultery.

Ishag’s case raised questions of religious freedom in mostly-Muslim Sudan and sparked vocal protests from Western governments and human rights groups.

Ishag’s husband Wani said her family had sought protection at the US embassy because of mounting death threats.

Ishag, Wani and their children are being hosted by the Italian government in Rome for a few days before they fly to New York.

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Egypt: Journalists accused of terrorism


A group of bloggers and journalists have been accused of plotting ‘to destabilise the nation’ for having ties with the outlawed Ginbot 7 group


A court in the capital, Addis Ababa has charged 10 Ethiopian journalists and bloggers belonging to the social media activist group Zone 9 with terrorism. They have been held in detention since April, and all deny receiving financial aid and instructions from terrorist groups to destabilise the country.

Nine of the accused – one is charged in absentia – smiled and waved to friends and family as they entered the packed courtroom.

The judge said the group’s work was a cover for clandestine activities and accused it of plotting “to destabilise the nation”.

“They took training in how to make explosives and planned to train others,” the AFP news agency quoted Judge Tareke Alemayehu as saying.

The bloggers are accused of working in collusion with the banned US-based opposition group Ginbot 7, which calls for the violent overthrow of the ruling party in Ethiopia.

New York-based Committee to Protect Journalists (CPJ) said the government was trying to stifle opposition and media freedom in the country, and called on the authorities for the group’s immediate release, saying they had been doing their jobs.

Correspondents say Ethiopia has increasingly faced criticism from donors and human rights groups for jailing its critics – many of whom have sought asylum abroad in fear of being arrested and tortured in jail.

“Expressing critical views is not a terrorist act. Once again, the Ethiopian government is misusing anti-terrorism legislation to suppress political dissent and intimidate journalists,” Tom Rhodes, CPJ’s East Africa representative, said in a statement.

The lawyer for some of the accused said the charges had no “credible substance”.

Zone 9’s website, which often has pieces that are critical of the government, has the strap line “we blog, because we care”.

In June, one of the leaders of Ginbot 7 facing the death penalty was controversially extradited from Yemen to Ethiopia. Andargachew Tsege was sentenced to death in absentia in 2009 for plotting a coup.

In an interview with the BBC, Ethiopian Prime Minister Hailemariam Desalegn denied that the authorities were being heavy handed in applying anti-terror laws which came into force five years ago. He warned that those found to be linked to “terrorist groups” would be dealt with. “If you have any connection with terrorists don’t think that the Ethiopian government will let you [go] free”, he said.

Human Rights Watch (HRW) condemned the decision, accusing Ethiopia of making a “mockery of its own judicial system”, according to deputy Africa director, Leslie Lefkow.

“Hiding behind an abusive anti-terrorism law to prosecute bloggers and journalists for doing their jobs is an affront to the Ethiopian constitution,” she said.

HRW accuses Ethiopia of using the anti-terrorism laws to silence dissent and jail critics. Several journalists have been jailed under the law, including two Swedish journalists jailed for 11 years in 2012. They were pardoned after serving 15 months. Two years ago, prominent Ethiopian journalist and blogger Eskinder Nega was sentenced to 18 years in jail for having links with Ginbot 7.

The trial for the bloggers and journalists is expected to resume on August 4th.

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Ethiopia: First wines to attract fresh investment


The first wines at the Ziway vineyard are to be bottled this year, bringing the promise of attracting new foreign investment.

In Ziway, southern Ethiopia is an unexpected sight — vineyards bursting with merlot, syrah and chardonnay grapes ripening in the African sun.

The scene is more reminiscent of France’s Beaujolais region than this corner of the Horn of the Africa, but the French beverage giant Castel, which bottled its first batch of Ethiopian wine in 2014, is helping change the way outsiders view the country. It is also boosting government hopes of attracting foreign investment, key to its plans to reach middle income status by 2025.

The country’s growth rates are already among the highest in Africa, hitting 11.2% in 2013, according to the government, although the International Monetary Fund (IMF) puts the figure at 8.2%.

For Castel, the ambition is merely to produce good wine, and Ethiopia is an ideal, if surprising, place to do that.

“We don’t find it difficult because the climate is good, it’s not too hot,” said Castel’s Ethiopia site manager Olivier Spillebout, at its vineyards in Ziway, 160 kilometres south of the capital Addis Ababa.

The sandy soil, short rainy season, cheap land and abundant labour were what drew the company’s billionaire president Pierre Castel. The company has been working in Africa for half a century, and in Ethiopia since 1998 when it purchased a state-owned brewery, St George.

But the late prime minister Meles Zenawi thought a vineyard would boost Ethiopia’s image abroad, and asked Castel if it would be interested. So in 2008 the firm spent $27m setting up Ethiopia’s first foreign-owned vineyard.

Castel aims to sell half of the 2014 production of 1.2m bottles on the domestic market, and half to Ethiopian diaspora communities in North America, Europe and elsewhere in eastern Africa.

In Ethiopia, a bottle of Castel wine sells for $10 dollars, and is of better quality than comparably priced imported wines from South Africa or Italy.

The bottle’s design echoes Ethiopian traditions, showing the bulbous carafe traditionally used to serve the still popular, and potent, honey wine.

Even so Spillebout claims his wines are popular with drinkers of sweet and syrupy traditional wines, which are often served with raw meat, a local delicacy.

Castel said it does not expect to earn profits from its Ethiopia vineyard until 2016, eight years after it set it up; its main concern is keeping up with demand, having sold nearly a quarter of its first batch of wine since April, and said it plans to expand the vineyard to eventually boost production to three million bottles a year.

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