The 2014 West African Ebola epidemic has already resulted in at least 5000 deaths, with most experts believing this number is a very conservative estimate. Thousands more are currently ill with the disease, with the vast majority in Liberia, Sierra Leone, and Guinea. Moreover, the World Bank recently circulated a dire warning that without immediate international action, the humanitarian impact of Ebola could be “catastrophic,” with many billions in medical costs and the number of new cases potentially reaching 10,000 per week.
These statistics make the appalling social costs of the Ebola epidemic obvious, but what about the economic costs of Ebola? An October 16th report from research firm Sterne Agee tackled this tricky topic.
Economic costs of Ebola in West Africa
The World Bank released a study a couple of weeks ago that estimated the costs of the Ebola epidemic could total more than $32.6 billion over the next two years in West Africa alone. The World Bank estimates that the fiscal impact for 2014 will be significant, with a loss of 2.1% of GDP for Guinea, 3.4% for Liberia and 3.3% of GDP for Sierra Leone. This adds up to a combined economic loss of more than $350 million for the three countries. The Sterne Agee report highlights that most of the GDP losses for these countries relate to tourism, and also note that the negative impact of the Ebola impact on tourism is likely to be long lasting.
Economic costs of Ebola in U.S.
The costs of the Ebola epidemic in the U.S. have been relatively small so far. Medical economists point out that the treatment cost for an Ebola patient is around $1000 an hour, which means that more than $500,000 was spent on the first patient (Thomas Eric Duncan) at the Texas Health Presbyterian Hospital in Dallas.
Increased entry point security protocols have been issued for those entering the U.S. from West Africa. Five major U.S. international airports have already started Ebola screenings including taking passenger temperatures. The exact cost of these safety precautions is unknown, but definitely run into the tens of millions as a similar Ebola screening process at the Heathrow Airport is projected to cost around $14 million over the next 6 months. President Obama has also pledged up to $1 billion in humanitarian aid to help combat further contagion in West African countries..
