Experts: Ebola May Cost Nigeria Billions

The current outbreak of the Ebola virus in
Nigeria may cost the Federal Government
about $2 billion, this is according to a
forecast made by a Lagos-based financial
advisory and research firm, Financial
Derivatives Company Limited (FDC).
According to the firm in a report titled:
“Making Economic Sense of the Ebola
Scare,”, the sectors the Ebola virus would
affect mostly in the country include aviation,
hospitality and tourism, trade, medical and
agriculture.
Analysing these sectors’ contribution to the
country’s gross domestic product (GDP), the
report stated that though the chance of the
outbreak going into a second quarter was
very slim, it could extend the loss to $3.5
billion.
The Minister of Health Prof. Onyebuchi
Chukwu in an audience with the US
Ambassador to Nigeria, Mr. James Entwistle
during a visit in the minister’s office in Abuja
It could be recalled that the Boko Haram
insurgency had been the headline news in
Nigeria until 25 July, 2014 when it was
confirmed that Ebola had been imported
into the country by a Liberian businessman,
Patrick Sawyer.
Since then, fear, panic, disbelief and
frustration has taken its toll as economic
activities, particularly in Lagos, have
gradually slowed.
Moody’s had announced that the outbreak
of Ebola in Nigeria could lead to serious
disruptions in some sectors of the economy
with negative financial consequences.
“Whilst a small part of the Nigerian economy
is already benefiting from the Ebola scare
such as shop owners selling sanitisers, a
larger part is experiencing losses,” it stated.
The report showed that air transport, the
second most used means of transportation
after road, accounted for 0.09 per cent of
Nigeria’s GDP in first quarter of 2014.
It was gathered that since the outbreak of
Ebola in West Africa, several airlines
including Arik Air, Asky, British Airways and
Emirates have suspended flight operations
to and from any of the Ebola affected
countries.
Saudi Arabia also suspended giving out
visas to Muslim pilgrims from West African
countries. Serious screening for Ebola has
also begun at several international airports
before passengers are allowed to board an
airplane.
“We expect revenues in the aviation sector
to plunge downwards, which would affect
both the airlines and the support industry
(handling companies, oil marketers,
catering, duty free shops, etc.),” the report
stated.
Commenting on the impact on the
hospitality and tourism sector, it stated that
preliminary information showed that many
hotel and airline bookings in Lagos have
been cancelled by in-bound travellers due to
the scare of the virus.
“This is not surprising since India and
Greece have openly advised their citizens to
avoid non-essential travel to Nigeria and
other Ebola-affected countries. It is
estimated that restaurant visits in Lagos
have already declined by 50 per cent. The
accommodation and food services sector
was approximately one per cent of total GDP
in first quarter 2014.
“This amount is not negligible considering
the importance that restaurants play in the
lives of many working-class Nigerians. In
addition, a direct implication of the low
turnout to social events is a decline in the
events management business,” it added.
It was gathered that in first quarter of 2014,
trade contributed 17.35 per cent to Nigeria’s
GDP.
Trade and investment flows are critical to
the external sector of the country and the
West African region. The region enjoys
almost a custom union with common
external tariff and movement of visitors
without visas.
“Since movement of people is restricted in
and out of the affected regions, fewer
goods will be equally transported. Air
transportation is very critical to trade. Hence,
a reduction in the number of international
flights literally means a reduction in
international trade flows. Domestic trade is
also likely to be negatively affected
significantly if the disease spreads,” the
report added.
On agriculture, it argued that there would
be a decline in sales of several animals, even
when they have not been linked to Ebola.
“Farmers or hunters living in areas where
there is co-mingling of animals connected to
Ebola will reduce their exploits. The hunters
association in Nigeria has already
complained about a slowdown in business
due to experts’ directive that people should
abstain from consuming bush meat.
“Other meat sellers may also witness a
reduction in patronage if the disease
spreads further. In addition, in a bid to
prevent illegal movement of Ebola-linked
corpses across states, there will be many
stops at checkpoints” the report argued.
According to the Nigerian Minister of Health,
Onyebuchi Chukwu, no fewer than three
people have died of the Ebola virus in
Nigeria since the Late Sawyer impor

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s