The risks of contracting Zika are much less severe than diseases such as Ebola. Still, a potential outbreak could have a huge effect on African economies, and the tourism industry in particular.
By the end of May, the World Health Organisation confirmed the first cases of Zika in Cape Verde, just off the western coast of Africa. While the virus is not new to the continent – it was actually discovered in Uganda in 1947 – it is the specific South-American Zika strain that has now been detected. This is certainly worrying as the West-African countries Liberia, Guinea and Sierra Leone have already suffered tremendously from the economic effects of Ebola and are only just now starting to recuperate. Moreover, it could affect other African countries and send them in the same downward direction. Will these countries be able to curb the spread of the Zika virus?
Ebola vs. Zika
With symptoms comparable to a severe flu, the effects of Zika are not comparable to the 60% mortality rate of Ebola infections, and about 80% does not even suffer from any symptoms. The main health risk is in the possibility of unborn children getting infected during pregnancy and being born with microcephaly or the Guillain-Barré syndrome. Yet the most pressing economic risk is in the spill-over effects related to excessive precaution measures and significant decrease in foreign investment, which would cause economic stagnation.
The World Bank estimated that the overall impact of the Ebola crisis on Guinea, Liberia, and Sierra Leone was about $2.8 billion ($600 million for Guinea, $300 million for Liberia, and $1.9 billion for Sierra Leone). Looking at the GDP growth; in Liberia, this slowed to 0.7 percent in 2014, from 8.7 percent in 2013 before the outbreak, and is predicted to be at 0.3 percent in 2016. Guinea had a real GDP growth of 4.0 percent before the outbreak and slowed to 0.1 percent in 2015, with a minor recovery predicted at 4 percent for this year. Sierre Leone has been hit hardest as GDP growth fell down from 20.7 percent in 2014 to -21.5 percent in 2015, with a prediction for 2016 of 0.1 percent growth.
The economic downturn is not only the effect of the health crisis, but is also a result of the shutdown of local mining activities, fiscal developments and an overall massive decline in foreign investment. While the health risks are not to be overlooked, the longer-term risks are in the spill-over effects to the economy and local markets.
Is this enough to fight Zika?
Not everything is bad news, as the local health infrastructure has been boosted immensely by international aid. The latest Ebola flare-up in January 2016 was brought quickly under control, showing that Sierra Leon is in a better position to face another outbreak. Whether this would be sufficient to deal with a new virus is highly questionable, especially in the higher risk areas, such as isolated countryside areas where protection from mosquitoes is sometimes non-existent.
Furthermore, accurate public population records only exist in a couple of countries, which makes it had to monitor the situation. Children that might be born with microcephaly or the Guillain-Barré syndrome are unlikely to be registered as Zika-related and might not get appropriate health care. This is problematic for the immediate response to the situation, as no one really knows how far the disease has spread to date. It is difficult to predict whether countries, both the Ebola-affected and others in West Africa, will be able to deal with a potential epidemic, although some experts believe so. Even if response mechanisms are in place, prevention is still overlooked in most areas and will come too late when the disease starts to spread further across the continent. The health risks are therefore considerable and should not be taken too lightly.
Economic effects of a potential Zika outbreak
The indirect effects can have a huge impact on the affected countries’ health care infrastructure – both positive and negative as we have seen with the Ebola crisis – and economies. Besides the individual health risks, deterrence might actually be the biggest risk.
During the Ebola crisis, countries all over Africa saw a decline in tourism, foreign investment, growth and development. This resulted in the IMF cutting its growth forecast for economic growth in sub-Saharan Africa to 5 percent from 5.5 percent, referring to the “economic spillovers” from the outbreak. Corporate events were cancelled, investors and businesses suspended investment trips to the continent, and the growing tourism industry was affected. Travel bookings across Africa fell almost 70 percent and major travel destinations in Eastern and Southern Africa, which are thousands of kilometres from the site of the outbreak, were hit with cancellations.
Contrary to Ebola, contracting the virus is not the biggest risk. Still, just as businessmen and tourists were reluctant to travel to countries thousands of kilometres from the Ebola risk area, even the smallest possibility of contracting Zika will scare off a lot of people. As a result, countries will see a decline in their growth and development will stagnate in many places.
While the direct risks of Zika are not huge, the spillovers have the potential of slowing down local economies. Whether or not there will be an actual outbreak, the mere possibility is already preventing the recovery of the Ebola-affected countries and has the potential to slow down growth across the continent.