year, if nothing is done to contain the spread of the deadly disease.
The Chief Executive Officer, Financial Derivatives Company Limited,
Mr. Bismarck Rewane, who stated this in the firm's latest report on
Friday, said the fear of the disease had affected economic activities
significantly.
According to him, the sectors of the economy mostly affected by the
fear of the disease are aviation, tourism and hospitality, trade,
medical and agriculture.
He added, "Analysing these sectors' contribution to the Gross Domestic
Product shows that Nigeria may lose about $2bn in the first quarter of
the outbreak. The chance of the outbreak going into a second quarter
is very slim; which could extend the loss to $3.5bn."
The Boko Haram insurgency had been the headline news in Nigeria until
July 25 when it was confirmed that Ebola was imported into the
country.
Since then, fear, panic, disbelief and frustration have set in as
economic, particularly in Lagos, have gradually slowed down. Global
rating agency, Moody's, has announced that the outbreak of Ebola in
Nigeria can lead to serious disruptions in some sectors of the economy
with negative financial consequences.
The World Health Organisation has also reported that the Ebola crisis
is vastly underestimated as the reported cases and deaths do not
reflect the scale of the crisis.
About 1,069 persons have died in the affected countries, out of which
three are Nigerians and 198 other persons are currently under
quarantine in the country.
Teneo Intelligence estimates that economic growth in Liberia, Sierra
Leone and Guinea may reduce by two percentage points.
In other words, Sierra Leone's growth rate in 2014 may not exceed 12
per cent instead of the initial forecast of 14 per cent. Liberia,
Sierra Leone and Guinea have a combined GDP of approximately $13bn,
equivalent to 2.5 per cent of Nigeria's GDP.
Rewane said that a small part of the Nigerian economy was already
benefiting from the Ebola scare. These include shop owners selling
sanitisers.
He, however, said a larger part was experiencing losses.
He said, "Air transport was 0.09 per cent of Nigeria's GDP in the
first quarter and the second most used this means of transportation
after road. 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.)"
He further said, "Hospitality and tourism preliminary information
shows that many hotel and airline bookings in Lagos have been
cancelled by in- bound travellers due to Ebola scare. 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."
"Trade in the first quarter contributed 17.35 per cent to Nigeria's
GDP. Trade and investment flows are critical to the external sector of
this vibrant 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."
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