Posted on Monday, 23 November 2015 10:00

Liberia Country Profile 2015: Virus devastates the economy

By The Africa Report

altThe government's ability to tackle Ebola will shape 2015 in Liberia.

A lengthy spell of relatively peaceful and progressive conditions in the country was brought to an untimely end by the worst outbreak of the virus in history.

As the death toll soared to more than 5,000 by the end of October 2014, the disease was provoking a mixture of quiet determination and steady panic among residents of Monrovia and surrounding areas.

President Ellen Johnson Sirleaf declared a state of emergency in August, enabling quarantines and curfews across the country, to the point that some feared the severity of some measures might provoke political instability.

An intensive public health intervention launched by the US military in October will inevitably come under scrutiny, however well intentioned or effective it is. Critics bemoaned the slow international response, and in late 2014, there were not yet signs that Ebola in Liberia was under control.

The healthcare system was clearly overwhelmed, with more than 80 healthcare workers succumbing to the virus in the first months of the crisis. Residents reported difficulties in obtaining routine medical services, and international health organisations made dire predictions, saying that deaths could reach tens or hundreds of thousands.

Suspended election

After consultations between Johnson Sirleaf and the Liberian senate, legislative elections that were scheduled to take place in mid-October were postponed. The government backtracked shortly thereafter and announced it would hold the polls in December.

Ebola also resulted in dislocation across the economy. Production at the country's large rubber and palm oil plantations was cut back and day-to-day food farming and trading became increasingly difficult.

altIn Monrovia, imported food prices rose as shipping companies struggled to find crews willing to board cargo ships headed for Liberia. Most airlines suspended their routes into and out of Monrovia, isolating the country.

Investors faced difficulties as contractors withdrew staff and some temporarily suspended operations. Finance minister Amara Konneh downgraded growth projections, saying that the disease "threatens our post-war recovery process for sustainable, inclusive, and pro-poor growth". The Liberian dollar lost value and the finance ministry recorded a budget shortfall of more $70m.

The government was criticised for allowing the outbreak to spread after the first cases appeared in a remote north-western region. Newspapers carried claims that $5m allocated to battle Ebola was mismanaged. Despite presidential promises to reign in theft by officials, the government was seen as unaccountable.

This impression was confirmed in October when justice minister Christiana Tah resigned after Johnson Sirleaf blocked an investigation into the National Security Agency, which is headed by the president's son Fumba Sirleaf.

A leaked US Agency for International Development report noted that the issues that triggered the violence of the 1990s "remain just below the surface".

Resources blocked

Prior to the Ebola outbreak, expectations were high that commodity exports would boost government spending on services and infrastructure. But resource concessions continue to be plagued by difficult relations with local populations.

In July 2014, violence broke out at ArcelorMittal's mining site in Nimba County after youth groups blocked railway lines.

Oil palm producers struggled to acquire land from farming communities, and in her state of the union address Johnson Sirleaf accused local environmental watchdog groups of "undermining sovereignty".

Before the crisis, economic growth had been strong. The iron ore sector was a bright spot in early 2014 when China Union began shipping ore from its mine in Bong County and Putu Iron Ore Mining Company applied for a licence to begin full operations.

A new bidding round for four oil blocks was announced during the crisis despite the fact the government had not passed its new oil laws. The bidding round will give preference to big internationals that partner with companies partly owned by Liberians. But with allegations of corruption by former officials from the National Oil Company of Liberia, it remains to be seen whether this will be truly competitive.

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