Ebola: Most African Countries Avoid Major Economic Loss but Impact on Guinea, Liberia, Sierra Leone Remains Crippling

January 20, 2015

WASHINGTON, January 20, 2015–The Ebola epidemic will continue to cripple the economies of Guinea, Liberia, and Sierra Leone even as transmission rates in the three countries show significant signs of slowing, according to a World Bank Group analysis on the economic impact of Ebola in Africa. The Bank Group estimates that these three countries will lose at least US$1.6 billion in forgone economic growth in 2015 as a result of the epidemic.

But the new report -- released on the eve of the 2015 World Economic Forum in Davos -- also contains more positive news: the probability of spread and the associated economic costs beyond the three most-affected countries are now much lower than previously feared because of the intensive global and national responses to the epidemic over the past several months.

An earlier World Bank Group economic analysis (from October 8, 2014) found that the West Africa region alone could experience a downside scenario of US$25 billion in economic losses in 2015, but the current report estimates the range for sub-Saharan Africa as a whole to be from a low of US$500 million to a high of US$6.2 billion.

The national and international responses have resulted in a number of public health improvements within the three West African nations, including safer burial practices, earlier case detections, more health workers and treatment facilities, public awareness campaigns and stepped-up contact tracing. These policy and behavior responses have contributed to a lower risk of spread across borders. The lower estimates also reflect fast and effective containment measures taken in the neighboring countries of Mali, Nigeria and Senegal, all of which have now been declared Ebola-free.

“Even if Ebola is controlled and further outbreaks avoided,” said the report, “economic costs will be incurred across sub-Saharan Africa in 2015. Consumer and investor confidence has been eroded by the outbreak of the virus, and disruptions to travel and cross-border trade suggest cumulative losses of more than US$500 million across the region in 2015, outside the three directly affected countries.” The report said the losses could be closer to the higher end of the estimate -- US$6 billion -- if the Ebola outbreak were to spread through the region, reinforcing the need for a swift end to the epidemic.

“I am very encouraged to see Ebola transmission rates slowing markedly in Guinea, Liberia, and Sierra Leone, and that other potential outbreaks have been averted because of swift action by other West African governments,” said Jim Yong Kim, President of the World Bank Group, who will discuss the emerging lessons from the Ebola crisis with world leaders in Davos this week. “Yet as welcome as these latest signs are, we cannot afford to be complacent. Until we have zero new Ebola cases, the risk of continued severe economic impact to the three countries and beyond remains unacceptably high.”

The report notes that containment and preparedness efforts dramatically limited the potential impact of Ebola on the African economy, compared to earlier worst-case scenarios. The scope of the report did not include examining the national and international response to determine most effective policies in curtailing the spread of the virus.

One major lesson from the Ebola outbreak, said Kim, was for the world to respond much more quickly to epidemics.

“This report demonstrates why all countries should make investing in pandemic preparedness a top priority for 2015,” said Kim. “It points to the need for a global pandemic emergency financing facility that will enable the world to respond much more quickly and effectively to any future deadly outbreaks, and avoid the tragic and unnecessary human and economic costs that have resulted from the Ebola epidemic.”

Economic impact on Guinea, Liberia, and Sierra Leone

The new report finds that “the Ebola epidemic continues to cripple the economies of Guinea, Liberia, and Sierra Leone.” Full-year 2014 growth in Sierra Leone fell by more than half to 4.0 percent from 11.3 percent expected before the crisis, with large reductions in Guinea and Liberia as well. The total fiscal impact felt by the three countries in 2014 was over half a billion dollars, nearly 5 percent of their combined GDP.

Investor aversion further diminishes 2015 growth estimates to -0.2 percent in Guinea, 3.0 percent in Liberia, and -2.0 percent in Sierra Leone (down from pre-Ebola estimates of 4.3 percent, 6.8 percent, and 8.9 percent, respectively). These projections imply forgone income across the three countries in 2015 of about US$1.6 billion: about US$500 million for Guinea, US$200 million for Liberia, and US$900 million for Sierra Leone, or more than 12 percent of their combined GDP.

Expected Forgone GDP in 2015 due to Ebola and Global Economic Conditions (in US dollars)


US$540 million


US$180 million

Sierra Leone

US$920 million

Core Three Countries

US$1.6 billion


With Current Limited Spread

With Significant Additional Spread

Sub-Saharan Africa

US$550 million

US$6.2 billion

Africa-wide impact in 2015

The Bank Group expects sub-Saharan Africa to grow at 4.6 percent in 2015, down from a 5.0 percent forecast in June 2014. Projections have been lowered because of global events, including the West African Ebola epidemic as well as the net effect of winners and losers from a steep fall in the global prices of oil and other commodities. Key risks to this projected growth include a renewed spread of Ebola, violent insurgencies, further reductions in commodity prices, and volatile global financial conditions.

Much of the economic impact of Ebola beyond the epicenter of directly affected West African countries is based on fear, as was the case during the SARS outbreak in East Asia a decade ago. This fear – as well as the associated aversion behavior – relates to concerns that the epidemic cannot be contained (heightened by several cases in the USA and the EU) and in some cases to misperceptions about African geography (some of the economically affected countries have not experienced a single case of Ebola).

World Bank Group’s Response to Ebola Crisis

The World Bank Group has mobilized nearly US$1 billion in financing for the countries hardest hit by the Ebola crisis. This includes US$518 million from IDA for the epidemic response, and at least US$450 million from IFC, a member of the World Bank Group, to enable trade, investment, and employment in Guinea, Liberia, and Sierra Leone.

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