African nations grabbed headlines last week for reasons both positive and negative.
At the White House, President Obama hosted a U.S. Africa Leaders Summit, which helped highlight some of the continent’s fast-growing economies.
At the same time, the Ebola outbreak in West Africa, which is concentrated mainly in Liberia, continued to worsen and received plenty of attention both nationally and locally in Atlanta. Two patients suffering from the virus were brought to Emory University Hospital for treatment.
Ray Hill, a Senior Lecturer in Finance at Goizueta Business School, provides some perspective on the potential impact the Ebola outbreak might have on sub-Saharan economies. Hill’s areas of focus include macroeconomic and monetary policy, energy economics and finance and he has been a member of the Council on Foreign Relations since 2000.
While the virus is of concern, Hill said there are other issues — including other diseases — that could have larger economic impacts.
“I want to be clear that Ebola is a serious humanitarian problem,” Hill said. “It’s just not a significant economic problem.”
On Wednesday the World Health Organization reported 932 people have died during the current outbreak in West Africa. In comparison, Hill noted the large and ongoing problems with AIDS and malaria on the continent.
In addition, the countries currently affected by Ebola have small economies. Hill cited World Bank statistics on the size of some of Africa’s fastest-growing economies relative to the United States: Kenya’s GDP equals 0.3 percent of the United States, Ghana is 0.3 percent, Mozambique is 0.09 percent and Sierra Leone 0.02 percent.
The Ebola outbreak is the largest in the past 30 years but Hill said, in terms of economic damage, its impact will likely be limited because of its location. Economic output is limited in these rural areas and isolation tends makes the spread of the virus to large population centers unlikely.
While some areas might need to be quarantined, Hill did not believe any potential disruptions in transportation would have major consequences. Liberia’s GDP represents one one-hundredth of a percent of the United States’, he said. Nigeria and South Africa are the major economies of sub-Saharan Africa.
“You can have all the hysteria you want in Liberia and you can cut off all the trade from Liberia with the rest of the world and it is not going to affect the rest of Africa, nor is it going to affect the world,” he said.
With 173 million people, Nigeria represents the continent’s most populous nation and last week it began reporting cases of Ebola.
Hill does not anticipate a disruption to economic activity, in part, because Nigeria is comprised of two economies: the north, which has limited mobility because of poor infrastructure, which he believed would limit the virus’ spread, and the south, which is more developed, economically speaking.
Before he went into academia, Hill worked for major power companies in Asia. He said Nigeria is set to privatize its electricity sector, the business in which he formerly worked. He said if, hypothetically, he were making a presentation to a corporate board to bid several hundred million dollars on privatization, he would view the Islamic terrorist group Boko Haram as a greater threat than Ebola.
“If I had an hour to present, I’d spend most of my time talking about other issues, then, perhaps, 15 minutes on Boko Haram,” he said, saying he would reserve Ebola for another conversation.