TAistlseessing the socio-economic impacts of Ebola Virus Disease in Guinea, Liberia and Sierra Leone The Road to Recovery

This report presents the principal findings of three studies undertaken by UNDP on the impact of the Ebola epidemic on Guinea, Liberia and Sierra Leone. The main objectives of these studies were to: review the evolution of the epidemic; examine the economic and social context, including the state of health systems; discuss the economic and social impact of the epidemic; examine the responses by local communities, governments and donors; and consider the reorientation of UN programmes that will be necessary to assist governments in fighting the epidemic. The studies relied on a range of sources, including secondary data available on the Internet and from government and international agencies, and in-country interviews of representatives of affected communities, public and private agencies. Information from primary and secondary sources were complemented by results from the macro-econometric and computable general equilibrium models. Several important conclusions emerged from these analyses. Guinea, Liberia and Sierra Leone have high rates of poverty and are ranked near the bottom on the UN’s Human Development Index. Prior to the onset of the epidemic and after civil wars or political turmoil that had effectively destroyed much of the existing social and economic infrastructure, restoration of peace and democracy were supporting economic recovery and some improvements in social indicators. The epidemic has essentially robbed these countries of much of the progress made in the past 5-10 years. The health systems in Guinea, Liberia, and Sierra Leone were unprepared for Ebola at the outset of the epidemic. They lacked sufficient amounts of everything required to contain the epidemic: drugs, ambulances, facilities, trained health personnel, and many other items. This is not surprising, since these countries had few resources and suffered from many serious health issues that generated competing demands for resources, even prior to the onset of Ebola. Tragically, the shortage of protective equipment resulted in multiple infections and deaths among medical personnel, further spreading the disease and leading people to avoid treatment for fear of being infected. Moreover, impoverished rural areas have much more limited access to services than relatively well-off urban areas. This inequitable distribution of human and financial resources has hampered the response to the epidemic, which originated in, and continues to heavily affect, many rural areas. Human resources are inequitably distributed. Conakry, which is home to just 15 percent of the population, has 75 percent of the health workers. By contrast, Guinée Forestière, which has been hardest hit by the Ebola epidemic and is home to 22 percent of the Guinean population, has 9 percent of health workers. Contagious diseases are difficult to control, while some aspects of Ebola greatly exacerbated the challenge, given these countries’ contexts. Control measures, for example the closure of businesses, quarantine and destruction of property, are costly to the individuals involved and may be resisted, while in the absence of local community and or government commitment, these measures may be difficult to enforce. Sick people who flee infected areas transmit the virus to new areas while restrictions on travel are only sporadically effective. The symptoms of Ebola resemble other endemic diseases in the area, delaying knowledge of the epidemic until after it had spread considerably is common practices in the three countries, including personal care for the sick by relatives and friends (who largely are unfamiliar with, and in any event do not have, the equipment necessary to treat Ebola patients without being infected themselves), the washing and dressing of dead bodies in preparation for burial, and communal hand washing tend to spread the virus. Lack of familiarity with the disease at the initial stages of the epidemic, combined with distrust of government advice, limited the use of simple preventative measures by individuals that could have saved lives. At times, public policy and institutional arrangements impaired efforts to control the epidemic. The failure to keep important commitments eroded trust in government, impeding cooperation in fighting the disease. Centralized control over health systems failed to engage local communities, essentially undermining many programmes at the local level, and tended to be inefficient. In Sierra Leone, for example, a single institution was designated to bury all people who died of Ebola. However, this institution rapidly became overwhelmed by the caseload, which severely delayed burials and increased the risks of disease. While governments have established agencies to coordinate their efforts in fighting against the epidemic, bureaucratic competition has nevertheless led to duplication and increased cynicism about government commitment. Strong government leadership and effective coordination, however, did get results. Where the Government supported local community engagement in programmes involving effective testing, contact tracing, quarantine, and safe treatment, the virus could be stopped. For example, in Télimélé, a village in Guinea, an effective, locally managed programme stopped the infection; the last confirmed case was in June. Ebola has spread rapidly, but unevenly. Since the first cases appeared in December 2013, the number of new infections has varied by country, by region, and over time. The epidemic appears to have begun in rural areas along the borders. With the exception of Monrovia and Freetown, where the virus has spread due to the influx of victims seeking treatment, rural areas continue to be the most affected by the epidemic. The latest data show a decline in new cases in Liberia, but a continued rise in Guinea and Sierra Leone; the virus is not under control in any of these countries. All in all, there had been almost 18,000 cases, and more than 6,400 deaths, as at 10 December 2014. The epidemic is reducing growth and its impact will take 5 to 10 years to overcome. The economic disruptions from increasing illnesses and deaths have been exacerbated by people’s efforts and governments’ edicts designed to avoid the spread of infection. Workers’ fear of engaging in collective activities has severely reduced agricultural production and office work. Government restrictions on travel and public gatherings, together with the closure of markets and schools, have severely impeded many economic activities. Production of goods that had formerly been traded with neighbouring countries, that came from areas highly affected by the epidemic, or that involved in-person cooperation experienced the largest declines. External transactions have plummeted. Exports are falling due to supply interruptions in areas heavily affected by the epidemic, declining availability of shipping due to fears of contracting the disease at ports in countries affected by the epidemic, and a decline in the international prices of minerals. Tourism has virtually disappeared. Imports also are declining with the fall in economic activity and constraints on trade. Overall, official forecasts for GDP growth in 2014 have been revised downwards since the onset of the epidemic, by 3.2 percentage points in Guinea, 4.8 percentage points in Liberia, and 6.4 percentage points in Sierra Leone. The likely decline in growth is confirmed by the results of economic modelling exercises. However, the CGE models’ predictions of the impact of the epidemic on growth are significantly different from the revisions to the official forecasts. This is largely because the model is designed to capture the interactions among economic variables. For example, a decline in earnings in one sector will reduce expenditures by workers in that sector, which will, in turn, reduce earnings in other sectors. All of these interactions may not be captured in the official estimates. Further, the revision in the official estimates reflects the impact on growth of all recent economic events, while changes between scenarios in the modelling exercise is designed to reflect only the impact of Ebola. The devotion of increased expenditures to fighting the epidemic, coupled with declining revenues as economic activity fades, are expanding fiscal deficits and reducing expenditures on activities that are not directly related to Ebola. Inflation is rising due to supply bottlenecks, driven by the reduced labour supply, lower trade domestically and across land borders, and unavailability of shipping. To date, the rise in fiscal deficits has been manageable, in part due to increased budgetary support from the international community, while the uptick in inflation has been limited. Nevertheless, a continuation of these trends will threaten long-term development. The great uncertainty concerning the ability of these countries to control the epidemic is sharply reducing private investment, which is likely to reduce output in future years, particularly in the mining sector. The decline in expenditures not related to fighting the epidemic will further reduce public sector investment and impair the government’s ability to provide a range of services, which will continue to be felt even after the epidemic is controlled. All of this underlines the importance of the immediate provision of budgetary support to help these countries through this critical time. The epidemic is also reducing welfare. Health status is seriously endangered by cuts in expenditures on non-Ebola related health services and a dramatic fall in the use of services (health agency visits, assisted childbirths, antiretroviral therapy drugs, home visits) owing to fears of infection. As a result, more people will die from childbirth, malaria and AIDS, as well diseases that are relatively easy to cure. Children are seeing their education delayed, which increases the risk of their dropping out. Perhaps the single positive impact of the epidemic is the greater attention to hygiene; as a result, despite conditions favourable to the spread of cholera, so far the disease has failed to appear. Women are suffering disproportionately from the epidemic, because they care for the sick, which makes them more vulnerable to infection, and they rely on economic activities (for example market trading and exports of fruits and vegetables to neighbouring countries) that have been hit hard by the epidemic. Further, social disruption increases their vulnerability. Reports of teenage pregnancies are on the rise, likely because girls are no longer protected by being in school much of the day. The epidemic is also breaking down social ties. Longstanding traditions of community support and care-giving have been disrupted, Ebola victims are being stigmatized, and social gatherings have been cancelled. People have come to fear contact with strangers, and sometimes even with their own family. The findings help to chart a pathway to recovery. Improved coordination between non-governmental organizations (NGOs) and local officials, and among government agencies is critical to effective programmes. Governments should step up their communications activities to combat ignorance that stigmatizes victims and impedes efforts at prevention. It’s high time to start thinking about how governments and private sectors can cooperate in launching the recovery. Efforts should focus on restarting activities that were abandoned during the epidemic, for example through strengthening social protection mechanisms including cash transfers, concession-based credit facilities, the provision of inputs necessary for the next planting season, and support for re-opening local markets. Strengthening the health management system must be a priority. Meeting the African Union’s goal of spending 15 percent of the total budget on health, and WHO’s goal of $34 health expenditure per capita, is key. Effective decentralization of health governance is also important to managing the health crisis. Institutionalizing monitoring and health surveillance is another. International donors and development partners can help. These countries desperately need money and technical support to cope with the virus. Donors are redirecting their programmes to help control the epidemic, but should not abandon all their efforts to support long-term development. The international community should not be overly engaged with humanitarian and early recovery actions at the expense of tackling the root causes of EVD. More debt relief, grants and concessional credits will help these countries to rapidly recover from the crisis. Better coordination among donors, and greater emphasis on the provision of technical experts could improve the efficiency, effectiveness and coherence of project assistance. A joint approach between national governments and development partners to early recovery is the best way to avoid fragmentation.