September 11, 2014 / 3:02 PM / 5 years ago

IMF says Ebola hits economic growth in West Africa

WASHINGTON (Reuters) - Economic growth in Liberia and Sierra Leone could decline by almost 3.5 percentage points as the world’s worst outbreak of Ebola has crippled mining, agriculture and services sectors in the two West African states, the IMF said on Thursday.

Growth in Guinea, where industrial mining has been unaffected so far, could fall by more than 1 percentage point, said Bill Murray, spokesman at the International Monetary Fund.

“Particularly in the cases of Sierra Leone and Liberia, the largest sectors of these already fragile economies ... are being affected,” Murray said. “This is in turn engendering significant financing gaps for the fiscal and external accounts of these two countries, and triggering higher inflation.”

He said the crisis had exposed financing gaps totaling $100 million to $130 million in each of the three countries, and that the IMF was working with authorities to figure out additional funding. All three countries are already getting IMF loans under programs that predate the Ebola outbreak.

The IMF said economic growth in Sierra Leona was likely to fall to 8 percent from 11.3 percent this year, Liberia’s growth might decline to 2.5 percent from 5.9 percent, and in Guinea, economic output could fall to 2.4 percent from 3.5 percent.

Sierra Leone, Guinea and Liberia are among the poorest countries in the region and the hardest-hit by the worst Ebola epidemic on record, which has killed nearly 2,300 people.

Liberia’s Finance Minister Amara Konneh told a news conference in Monrovia the outbreak was threatening the country’s post-civil war recovery.

He said domestic food production, mining activities and the services sector were all declining and had led to a sharp fall in state revenues, while spending demands to fight the disease had increased.

“Companies have scaled down operations as expatriates depart the country for fear of Ebola; public and private institutions have also scaled down operations in order to maintain the lowest possible staff headcount and thereby avoid close contact in workplaces,” Konneh said.

“As a result, productivity in the various sectors of the economy is being adversely affected.”

A fan of Ivory coast holds a sign with a message against Ebola during the 2015 African Nations Cup qualifying soccer match between Ivory Coast and Sierra Leone at the Felix Houphouet Boigny stadium in Abidjan September 6, 2014. REUTERS/Luc Gnago

Konneh said proposals had been made to President Ellen Johnson Sirleaf, including spending cuts, to make funds available to fight the disease.

The IMF’s Murray said a large-scale and well-coordinated intervention by the international community was urgently needed to help bring the epidemic under control.

Additional reporting by James Harding Giahyue in Monrovia; Writing by Anna Yukhananov and Bate Felix; Editing by Chizu Nomiyama, Peter Galloway and Alison Williams

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