In the face of the deadly Ebola virus disease (EVD) epidemic in West Africa, the International Monetary Fund (IMF) has prepared a prospective institutional response and is recommending to the Fund’s Executive Board to extend additional financial support to Liberia, Guinea and Sierra Leone in the tone of US$127 million.
The IMF staff has observed that Ebola outbreak in West Africa is exacting an acute human and economic toll that requires rapid action by the international community.
In a statement issued last week, the Fund’s Managing Director Christine Lagarde noted: “The Ebola outbreak is a severe human, social and economic crisis that requires a resolute response from the international community.”
“The governments of the three countries have requested additional IMF support to help cover the acute financing needs they are facing as a result of the outbreak. We are working very closely with them to help address these needs as quickly as possible,” said the IMF Managing Director.
Beyond the human toll, the Ebola outbreak is having a significant economic and social impact on the three countries. Liberia, for example has announced that it would need over US$200 million to deal with the economic impact being created by the Ebola outbreak.
The country’s Acting Minister of Finance and Development Planning, Mr. Amara Konneh, announced over the weekend that the country would need about US$300 to restore the economy to its pre-Ebola era.
Preliminary IMF staff estimates show that growth is likely to slow sharply in all three countries as key economic sectors such as agriculture, mining, and services are being disrupted.
Food and labor supply disruptions are hitting the poor and vulnerable groups hardest. Significant financing gaps have emerged as export and tax revenue have fallen, and governments try to meet additional needs to finance their healthcare systems and food and fuel imports.
Contingent on the IMF Executive Board’s approval, the proposed IMF financing will immediately be made available directly to the governments.
It will help cover a sizeable share of the total financing gap of some US$300 million estimated over the next 6 to 9 months by IMF staff for the three countries.
“Additional and prompt balance of payments (BOP) and budget support from the countries’ bilateral and multilateral development partners will be important to support macroeconomic stability through this challenging period,” the IMF said.
The IMF Executive Board will consider the proposed additional financing in early October. The World Bank Group, a major multilateral development partner of the Liberian government, recently approved US$52 million grant for the government to help fight the Ebola epidemic in the country.
Also the US government signed a US$5 million grant agreement with the government last week to pay public health workers’ salaries for the next five months. Thousands of public health workers will now be paid through the government’s direct deposit program with leading commercial banks in the country.
Liberia is worst hit by the Ebola virus as the epidemic has spread in thirteen of the country’s fifteen counties. The government is struggling to contain the spread of the incurable virus amidst distrust and bad religious and traditional practices by some segment of the public.
According to Liberian health officials, over 1,575 people have died from Ebola with over 3,022 cases. About 85 health workers have died in the country from over 180 infected by the virus.