This post is informed by a December 18, 2014, CGD roundtable discussion on Ebola.
The biggest outbreak of Ebola in history has taken a tragic toll in West Africa: almost 21,000 cases and more than 8,000 deaths in Guinea, Liberia, and Sierra Leone. The crisis is far from over and the first priority is to reach zero cases.
However, it’s time to think about what happens after Ebola in West Africa. Most of the economic and social impact of the outbreak is not a direct result of the physical disease, Ebola, but rather the closure of schools, clinics, markets, and workplaces—and the sudden stop in commerce and investment. And unlike other kinds of disasters, the issue is not rebuilding but instead reactivating affected households and economies. Without swift action, the continued negative economic impact on the region could be in the range of $30–35 billion over just two years.
In the face of calamity, there are hopeful signs that international efforts are having an impact. Resources are now available to help the governments and peoples of Guinea, Liberia, and Sierra Leone to combat and mitigate the effects of the Ebola outbreak, including $5.4 billion from the US government and $1 billion from the World Bank’s IDA and IFC.
How can these monies be used most effectively to reactivate the region? US agency representatives, members of the donor community, CGD experts, and private firms whose business operations are affected by the Ebola outbreak met in December 2014 to brainstorm this question. We focused on actions in three areas: health systems, households, and firms.
Within each category, we propose interventions based on two simple criteria: that they have been effective in these or other settings and that they represent an extension of existing programs, so they would be relatively straightforward to implement.
All of our recommendations are for regional programs, counter to the current structure of “one-donor-one-recipient.” If the Ebola outbreak has taught us anything, it is that the problem will not stop at a border. Neither can the solutions.
Health systems—regional disease surveillance and pool funds for health services
Reliable and resilient health systems—comprising both public health infrastructure and health care delivery networks—are key to revitalizing lives and livelihoods in West Africa. A functional health system also signals stronger governance to private investors and is necessary if essential suppliers and partners are to return to servicing the region, and new companies are to invest. Health security is a vital prerequisite to recovery.
A first priority is a regional disease surveillance system. Such systems have already been established in other parts of the world, such as East Africa, Southeastern Europe, Southern Africa, and Asia. For instance, the SARS outbreak in 2003 prompted East Asian countries to establish the ASEAN Plus Three framework to boost pandemic preparedness in the region. Given infectious diseases do not respect national borders, a regional disease surveillance system that can quickly detect, prevent, respond, and mitigate outbreaks through a cooperative network of national surveillance systems is much needed in West Africa and will provide earlier warning and response than was the case pre-Ebola.
A second priority is to reactivate the successful but nascent financing and provision arrangements to provide an essential package of cost-effective primary health care and to build basic hospital service capabilities to provide emergency and surgical care. Liberia’s health pool fundis a country-owned financing mechanism that contracted public and private providers, supporting primary care availability and readiness. The fund likely contributed to the 68 percent drop in infant mortality and near-elimination of malaria during the post-conflict period. These successes can be regained, with adjustments to build in subsidies and incentives for quality provision of hospital care. Human resources for health have been dramatically affected by the Ebola outbreak, and contracting of NGOs and/or human resource exchange programs will be needed for the foreseeable future while the country reinvests in training new health care professionals. At the time of the outbreak, Sierra Leone was in the midst of developing a free care and insurance program; this work can also be revisited.
Based on other countries’ experiences, the cost of a basic package of primary and hospital care might reach between $36–55 per person per year. This is well beyond what levels of public spending and aid were available to health in 2013, suggesting that any systematic support for health systems will need to be prioritized, scaled up, and funded differently than in the past. Nevertheless, even if only a fifth of the USG emergency funding were dedicated via pool fund and NGO/firm contracting mechanisms, these monies might fund five to eight years’ worth of health systems actions in each country.
Households—national cash transfers for families with children
Even if a family is lucky enough not to have a member directly affected by the Ebola virus, their lives have been changed by the outbreak. Schools have been closed for nearly a year; measures usually taken against preventable diseases have faltered. Household incomes fell precipitously, possibly leading to coping strategies that impact early childhood development, nutrition, and other long-term drivers of productivity. A new emphasis must be placed on improving household well-being.
Cash transfer programs worldwide have led to gains in consumption, health, education, and nutrition. Small-scale transfer programs exist in each of the three countries. In Liberia, for example, the social cash transfer program can be scaled up and modified to provide a universal national child benefit of $40 per child per year, paid quarterly to all mothers. If the program covered two million children, the annual cost would only be $50-80 million a year, depending on scope, with knock-on effects on local markets and entrepreneurship. In addition to the anti-poverty effects of cash transfers, an additional collateral benefit of the program could be the introduction of a biometric ID system, enabled by the use of a mobile electronic system to transfer cash.
While Liberia, Guinea, and Sierra Leone will each require a unique solution, the payments transfer program should be regional. Conducting it only in one country will risk reversal at worst, a missed opportunity at best.
Firms—reduce risks of doing business
Plans to invest in West Africa in 2014 were put on hold as the outbreak and its chilling effect shut down most trade and travel. On an interim basis, to reopen markets, external funders may wish to mitigate some of the costs and risks of doing business in West Africa for both local and international firms.
Investments in governance capacity, especially in trade, finance, and business regulation, will permanently improve each country’s ability to generate jobs, restore food security, and improve financial security, all deeply undermined by the crisis. Proactive offerings of financial instruments to mitigate risk will bring African and global capital back earlier than expected. Perhaps most importantly, we recommend a senior leadership focus at USG and the World Bank on a small number of high profile investments, with the goal of achieving final investment decision on one or more projects. Nothing would signal the region’s recovery more powerfully than such commitments of capital.
Crowding out local firms with aid should be avoided. In the aid effort in post-earthquake Haiti, only one percent of US aid went to local companies, with anecdotes of local firms being driven out of business either because donated goods undercut local sales of the same products or because international NGO outcompeted local groups. External groups should monitor these effects, and aid agencies should observe and report on local market dynamics.
By focusing on these three areas—health systems, households, and firms—the US government and the World Bank can play a critical role in mitigating the far-reaching social and economic effects of the Ebola outbreak on the three worst-affected countries. Targeted financial interventions in these areas can help prevent a public health tragedy from becoming a long-term economic catastrophe.