How the Ebola virus outbreak could 'wreck' Liberia's economy

Liberia is desperately trying to grapple with an outbreak of the deadly Ebola virus. As the country struggles to recover from years of devastating conflict, our Observer says its thriving economy could be the epidemic’s biggest victim.

Liberian authorities declared a state of emergency on Thursday. The outbreak – which has already hit West African neighbors Guinea, Sierra Leone, and Nigeria – has killed almost 1000 people. For Liberia – a country that has made great strides to overcome its recent history of long-running civil wars – the epidemic risks undoing years of progress. Ten years after its bloody conflict finally came to an end, the country’s economy grew at a staggering 8.1% in 2013.

“Worst still is the rate at which many NGOs in Monrovia - the capital - have abandoned Liberia”

The economic impact of Ebola on Liberia will be truly one of the most devastating and, I predict, lasting consequences of the virus. Over a decade since the end of conflict, Liberia and the government have made great strides towards renewing their image. The government has renewed many concessions, driving foreign direct investment into the country’s most abundant resource sectors. Additionally, a variety of very strong organizations, such as the BSC (Business Start-up Center), have made large investments to develop human capital capacity and to support small businesses and entrepreneurs.

But now, the momentum and growth which had been achieved across the Liberian economy is virtually driving to a halt. Large concessions will continue to operate, but the prospect of attracting new investments in natural resources will be slim as long as Ebola ravages the country. More damaging will be the effects on people already living at the bottom of the income scale. The suspension of small business support services and entrepreneurial development will drastically reduce the earning potential and employment generation which occurs at that level of society.

As small businesses and value added firms create the most employment opportunities, Liberia will have to work very hard to create jobs for a population with formal economic participation already below 30%.

 

“It could take as long as three years for the economy to recover from a shock like this”

The resources - which are essential to continued economic growth in Liberia, and more importantly for a shift towards more inclusive economic growth - are largely being withdrawn or suspended. It could take as long as three years for the economy to recover from a shock like this.

The country’s reliance on importing nearly all consumable products will also persist. Though there have been efforts to create manufacturing firms, some that also focus on import replacements, these will no longer be the priority for government as donors and NGO partners leave the country.

Worst still is the rate at which many NGOs in Monrovia – the capital - have abandoned Liberia. I do not mean to suggest that every aid organization is leaving, this would be false. Those focused on health, especially, are digging in harder and putting in more resources than ever. But for many organizations, as soon as the going gets tough it seems they pull their staff out; many of whom I have personally heard say they feel safe and would like to stay.

Though they must take care of their staff and ensure their safety, they are also responsible to the beneficiaries they agreed to work with and help. How will trust relations be impacted by their abrupt departure? It would be ideal if they could come and go as they pleased without leaving their beneficiaries feeling as if they’ve been ditched and cast aside.

If trust relationships are broken, what will it be like for NGOs when they are ready to work again with the communities they’ve deserted? How much longer will it take for the economy to rebound with such a great loss of support?