Bloomberg reported that medical care provided to Ebola patient Thomas Eric Duncan, who passed away on October 8 at Texas Health Presbyterian Hospital Dallas, may have cost as much as half a million dollars.
Nesbert Ruwo
This includes the cost of the isolation ward, medical attention and the intricate disposal of contaminated equipment and supplies. This is the direct cost of one case.
Adding up the total cost of the pandemic is staggering.
World Bank counts the “primary cost of this tragic outbreak in human lives and suffering”.
As of the end of October 14, the World Health Organisation (WHO) statistics show that the epidemic has killed over 4 500 people and a total of 9 216 reported cases since the first case was reported in December 2013. Prior to the current outbreak, a total of 2 387 cases were reported with deaths of 1 590.
More people have lost lives in the current outbreak compared to all previous Ebola outbreaks added together.
The longer this pandemic is kept uncontrolled, the faster the overall cost (social and economic) balloons. World Bank estimates that if left uncontrolled and the virus spreads to neighbouring countries, the financial cost could reach a staggering US$32,6 billion by 2015.
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Before the outbreak, the IMF had forecast that the Sierra Leone’s economy would grow by over 14% in 2014. Liberia’s economy had been growing by around 10% since 2005. Guinea’s economy was in the right direction under its economic and political reforms.
The World Bank estimates that the outbreak will cost Guinea, Liberia and Sierra Leone US$130 million, US$66 million and US$163 million respectively in lost output.
Sierra Leone is expected to lose a further US$439 million, that is 8,9% of GDP in 2015.
In the case of Liberia, the worst case scenario would be a cost of US$228 million, that is 11,7% of GDP, while for Guinea the 2015 economic cost is estimated at US$142 million or 2,3% GDP. The outbreak will derail the economic trajectories of the regional economies.
The impact in the three worst-hit countries include food shortages leading to panic buying and food price inflation, volatility in exchange rates, cancelled flights and capital flight.
It appears that significant economic costs are indirect effects of the pandemic — risk aversion and fear of contagion effect. The economic cost of fear will far outweigh the direct medical costs. Imagine what happens when people stop associating or reduce direct interactions with affected countries.
Holidays are postponed or cancelled. Flights are restricted and travel bans are implemented.
People from affected regions are isolated or get restricted from travelling. Sierra Leone’s finance minister, Kaifala Marah, sees this isolation as a de facto “economic embargo”.
Calculating the true cost of a pandemic may still be a theoretical exercise but it is worthwhile as the true cost is borne not only by the affected region, but, in a global world in which countries and economies are interdependent, by the global village.
WHO reported 8096 cases and 774 deaths in the 2002-3 Severe Acute Respiratory Syndrome (SARS) pandemic. East Asian countries experienced the worst impact of between 1% to 3% of GDP in 2003. The overall global cost over the two years was estimated at over US$800 billion.
Another modern pandemic, the 2009-10 swine flu (H1N1) pandemic is estimated to have infected over 620 000 people and resulted on lab-confirmed deaths of 18 036.
Actual fatal cases were definitely more than the reported lab-confirmed deaths. Economic losses were estimated to have been 0,5% to 1,5% of GDP in the affected countries.
Although Ebola has not reached Zimbabwe, it is important that all the necessary precautions are taken to deal with any incidence of the virus in the country. While we are at it, it also worthwhile that Zimbabweans think about the cost of another pandemic — the Aids epidemic that has claimed a lot of lives in the country and the region.
UNAids statistics (2013) show that though home to just over 5% of the global population, eastern and southern Africa accounted for close to 50% of all people living with HIV, that is 17,1 million of the estimated global total of 34 million. Aids is claiming predominately the economically active, as shown by the high prevalence of HIV in the age group 15 to 49.
This epidemic is causing untold suffering with severe impact on the Zimbabwean economy and social structure. Zimbabwe’s Ministry of Health report, The HIV and Aids Epidemic in Zimbabwe, points out that “all sectors and all Zimbabweans have a vested interest in addressing this epidemic because of what it is doing to the country”.
Although HIV and Aids affect the overall economy, its impact is seen in terms of household income, company performance, and government revenues and expenditures.
The real cost of pandemics is much higher that can be estimated. It is also clear that the cost of a pandemic is much more than the direct medical care costs.
The real cost include social, emotional and economic costs, both direct and indirect with immediate and long-term effects.
It calls for policy makers and everyone to work together to reduce the impact of a pandemic outbreak as the cost is just too much to bear.
Nesbert Ruwo is an investment banker based in South Africa. He can be contacted on [email protected]
