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October 24th, 2014

The Ebola outbreak in West Africa is bad news for the whole continent

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Estimated reading time: 5 minutes

Blog Editor

October 24th, 2014

The Ebola outbreak in West Africa is bad news for the whole continent

1 comment

Estimated reading time: 5 minutes

Waiswa Nkwanga calls on Ebola-free African countries to realise that international media coverage of the Ebola outbreak in West Africa is bad news for economic growth in the whole continent.

The world is accustomed to tragic news coming out of Africa. Still, it could be argued that the Ebola virus wreaking havoc in West Africa and spreading globally has pushed this perception into an even more frightening focus, with potentially negative implications on economies there.

Over the past decade or so, Africa’s future has looked promising. African countries recorded impressive annual GDP growth average of 5 per cent over the past ten years, according to the 2014 Economic Report on Africa. The continent is also home to 6 out of the 10 fastest growing economies in the world, more democratic and more stable. Africa’s image outside was also beginning to change from The Economist’s “Hopeless Continent” in 2000 to its “Hopeful Continent’” and “Rising Africa’” in 2011.

Nairobi

Indeed, it was because of this progress that in August President Obama, who had largely ignored the continent since taking office in 2009, held the widely publicised US-Africa summit in Washington DC — the largest gathering ever of American and African leaders in history. Obama sought to boost US engagement with the continent, with emphasis on encouraging American private investments in Africa.

But the passion and fear recently stirred by Ebola in America and around the world could undermine those efforts. It is hard to imagine American businessmen and tourists being enthusiastic about going to Africa any time soon. All of which raises some troubling questions about economic development on the continent: Are African countries even capable of taking advantage of economic opportunities available to them?Are African leaders alert to regional or continental situations that could affect their countries’ economic progress?

Given that Ebola has been in Africa since 1976 and there has been no adverse economic effect, it is easy to think that the outbreak in West Africa does not pose a major economic problem. But that reasoning would be misleading. First, no serious investor would ignore the Ebola crisis when deciding where to put his or her money, at least not in the short-term. It is virtually impossible to do serious business in, say, Liberia or Sierra Leone at the moment and it is likely to stay that way for some time to come.

Second, and as a rule of thumb, investors are interested in long-term economic projections for countries. Any serious investor would want to know that Ebola is not simply a symptom of a much larger structural problem in the region before they make a decision on whether or not to invest in a country.

Consider the case of Nigeria. Earlier this year, in April to be precise, Nigeria made international headlines when it was named Africa’s biggest economy valued at US$ 509 billion, after the government rebased the country’s gross domestic product, surpassing South Africa. One month later the country was making international headlines again—unfortunately this time negative ones. Islamist militant group Boko Haram had kidnapped over 200 schoolgirls and stepped up its bombing campaign in northern Nigeria and Cameroon. The intense international media coverage of the incident exposed the country’s insidious structural problems, including the fragility of its new democracy, state weakness, and very poor infrastructure, all of which hinder economic growth over the long term.

Terrorists, even fully-fledged civil wars, may not deter certain types of investors, to be sure. Indeed, previous experiences in Nigeria and elsewhere show that oil and other extractive industries prosper under chaotic conditions. For non-oil, non-extractive industries, however, there is no doubt that insecurity impedes investments. Frankly, it is not all that hard to understand why: it is too difficult to predict returns on investments and profitability of a business under extremely unstable conditions.

African countries outside of the current Ebola hotspots may not find recent events all that frightening. The continent’s vast size combined with meagre cross-border interactions among Africans means that if current Ebola-free countries stay vigilant, they could contain the disease’s spread relatively effectively. Countries in southern Africa, for instance, are both less exposed to Ebola and relatively stable. That is the good part.

The bad part for all African countries south of the Sahara is that, internationally, the damage has already been done. Given that the inherent weakness of African states is well known outside, investors must be willing to brush off the possibility—no, the fear—that crises in other parts of the continent could eventually spillover to other regions, thereby affecting their businesses. Who could have predicted last year’s terrorist attacks at a shopping mall in Nairobi, or the post-election violence there in 2007 that brought the country to a precipice? Moreover, a recent article by the Associated Press shows that individuals are not only cancelling trips to Ebola-free African countries, but that some businesses have pulled out of important events in countries as far south as Zimbabwe.

All of this is to say that it is time for African leaders to show they understand the gravity of the Ebola crisis and to take steps to address it. Perception matters a great deal in economics and business. Yet so far no African country (s) has taken any serious steps to address international fears and misperceptions. This is partly because many countries fool themselves into thinking that their sovereignty protects them from the negative effects of problems in other countries. They assume everybody and even pathogens knows the difference.

However, this perception is a gross continuation of deliberate ignorance throughout history. For good or for bad, outsiders have historically perceived sub-Saharan Africa as one entity. The failure of the countries in the continent to diverge in fundamental ways from one another economically, culturally, politically, socially etc., combined with their ethnic composition (which is predominantly black people), fortunately or unfortunately, blinds outsiders to the idea of a diverse Africa with different states, thereby perpetuating the perception of Africa as a country.

This false perception is especially exacerbated whenever disasters occur on the continent and all of the victims one sees in the media are black. But more importantly, it is fueled by the continued failure of African countries to demonstrate solidarity with their neighbors. Every disaster that requires western countries to intervene poses a fundamental question that no one has been able to answer yet: where are the other African countries? Time and again the answer to that question has unequivocally been nowhere—until the UN or western countries act.

Statehood is not an entitlement; it is fundamentally an obligation, which begins first and foremost with international recognition. That recognition does not only entail establishing embassies in capital cities around the world. Countries must also fulfill their obligations to one another as members of the international community. African countries and the African people need to stop blaming outsiders when dealing with challenges and instead analyse themselves and their role in enabling endless large-scale crises in the first place. The colonial legacy excuse is now outdated and lacks substance.

In this age of globalisation no problem is completely local, as Ebola’s spread to America has shown. Simply insisting that Ebola is only in West Africa or in certain countries is not a realistic approach to dealing with the problem. Countries can act right now to reduce the damage the Ebola crisis is likely to inflict on economic development there.

First, African countries need to step up their campaign against the disease as well as other problems that might affect their collective image outside the continent no matter where they occur. Second, they should immediately improve their PR campaign internationally or as soon as conditions start to improve to counter the damage that has been done, and increase confidence among likely investors and tourists. Bear in mind that the window of opportunity created by the US-Africa summit is still available. It is a once in a lifetime opportunity, so they must act and do so quickly.

 

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