An escalation in the mpox outbreak in sub-Saharan Africa risks slowing economic activity and pushing the governments of affected countries into financial distress, Fitch warned today.
However, the rating agency said there are signs that the virus outbreak may not be as economically devastating as previous outbreaks, particularly the Covid-19 pandemic and the 2014-2015 Ebola epidemic in West Africa, due to its low mortality rate and the existence of a vaccine.
The World Health Organization declared the rising number of mpox cases in sub-Saharan Africa a global health emergency on 14 August, a day after the African Centres for Disease Control and Prevention elevated the outbreak to a public health emergency of continental concern. Affected countries include Burundi, the Democratic Republic of Congo, Rwanda, Uganda, Kenya, and South Africa.
Confirmed mpox cases in most affected countries are very low, although some may be underreported, and the “emergency declaration highlights the potential for case numbers to rise sharply,” Fitch said.
If there is a significant increase in mpox cases, the “main impact on economies from the virus and the measures to counter it would likely be on consumption and production,” Fitch said in a commentary note.
“Tourism could be hit — a potentially significant factor in Kenya, Rwanda, and Uganda — where UN Tourism data indicate tourism accounted for 11 per cent, 20 per cent, and 19 per cent, respectively, of total goods and services export earnings in 2022. There could also be challenges managing inflationary effects, especially if food production and/or logistics are significantly disrupted.”
Fitch adds that public finances would come under pressure, with “weaker economic activity depressing tax revenues, and higher government spending on healthcare and epidemic prevention measures. International assistance could mitigate these effects, but its timing and size is uncertain.”
The report notes that while Liberia, Sierra Leone, and Guinea saw an increase in grants at the height of the Ebola epidemic in 2014 and 2015, reaching 19 per cent, 10 per cent, and 5 per cent of GDP respectively, “budget deficits in these countries were significantly wider on average over the period, even including grants, than they were in 2013.”
