By Dr. Alphonso O. Ogbuehi, professor of Global Strategy and Marketing, Clayton State University
President Obama’s U.S.- Africa Leaders Summit concluded recently with much excitement among both U.S. corporate leaders and chieftains of Africa’s leading enterprises. All told, the White House announced nearly $14 billion in total new investments into Africa. However, the ongoing spread of Ebola has the potential to severely curtail economic growth in the affected regions, especially in West Africa.
The ongoing spread of Ebola, however, is beginning to have severe economic impacts in the region. In the short term, the aviation industry has been hardest hit. Some international airlines like British Airways and Emirates have suspended operations in Guinea, Liberia, and Sierra Leone. In the wake of the current outbreak, business and tourist travel in West Africa have been severely impacted with cancellations.
Some U.S. firms have begun to extract key expatriate staff from the hardest-hit countries. Others have fortified their in-house healthcare facilities to protect and treat local staff and their families. In Liberia, where Bridgestone Firestone has 7,300 employees on their rubber plantation, its 300-bed hospital has been retrofitted to handle Ebola patients based on the Center for Disease Control and Prevention’s recommended guidelines.
With more than 1,000 estimated deaths so far from the current outbreak, much of this in the endemic countries of Guinea, Liberia, and Sierra Leone, a prolonged crisis could spell negative economic consequences. Much as the severe acute respiratory syndrome (SARS) outbreak that started in Asia in 2003 and spread to dozens of countries in North America, South America, Europe, and Asia before it was contained, we may yet see further outbreaks in the more countries before it is finally arrested.
The exact economic impact of this situation may not be completely felt until much later when the current situation is brought under control. In the short term, unemployment rates will likely continue to rise and external aid will be necessary from institutions like the World Bank and other agencies. In many of the affected countries, national borders are nearly closed with severe restrictions on the movement of citizens. With such restrictions, the economic activity is essentially at a standstill. In a region where significant portions of the population lived below the poverty line before Ebola, economic desperation cannot be exaggerated. The rebuilding process will surely take years, recognizing the psychological damages that must be repaired in these countries before the people can fully heal and restart their lives. It may take nothing short of an economic rebirth for these countries, especially if foreign aid is not as forthcoming as promised.
The long-term View
Despite the ongoing challenges and the gradual erosion of economic gains achieved over the past several years, this region will surely rebound from this devastating crisis. Indeed, Ebola does not represent an amputation of the economic life of the people, despite its severity. Moreover, while the Ebola disaster may seem to have overshadowed the events of the U.S.-Africa Leaders Summit in D.C. just two weeks ago, U.S. firms and investors must remain focused on the long-term fundamentals that make Africa an attractive market. These fundamentals include more stable political and economic reforms that have propelled the growth of the last decade, and an expanding, well-educated middle class.
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Dr. Ogbuehi has been on the faculty of the College of Business at Clayton State University since July 2010, bringing with him extensive knowledge and experience gained from scholarship and from leadership involvement with many educational organizations. Ogbuehi’s involvement with education extends to more than 20 years with multiple honors and awards for high performance in the many responsibilities where he has served. Most notably, he has extensive experience in building international programs and institutional relationships and external development.
A native of Nigeria, his long association with higher education began at the University of Kentucky, where Ogbuehi earned his B.S. His M.B.A., with a concentration in Marketing, was also earned at the University of Kentucky. His D.B.A. with a major in Marketing, and Minors in Transportation and Sociology, was completed at the University of Memphis.