How Ebola will disrupt world supply of rubber and oil

Saturday, November 1, 2014
By Paul Martin

by: J. D. Heyes
Saturday, November 01, 2014

The worsening Ebola outbreak in West Africa is causing deepening harm to the economies of the affected nations, as well as other African countries where, so far, there is no virus, over fears that the pandemic could widen further.

Particularly hard-hit are African economies that depend largely on commodities like oil and agricultural products to sustain themselves. Healio, an infectious disease news site, has identified a number of operations and industries that are currently suffering or are about to suffer because of the outbreak:

The oil industry: Oil production in resource-rich Africa is a major source of income for a number of countries, but the virus is chilling expansion. ExxonMobil CEO Rex Tillerson told reporters during a press conference October 2 that the corporation’s plans to drill off Liberian shores has now been postponed. “The company is prohibiting some employees from traveling to countries involved in the outbreak,” Healio reported. Other drilling planned by ExxonMobil will move ahead.

Agricultural production: The Food and Agriculture Organization (FAO) notes that food production and other agricultural operations account for more than half — 57 percent — of Sierra Leone’s gross domestic product, 39 percent of Liberia’s, one-fifth, or 20 percent, of Guinea’s and about the same, 22 percent, of Nigeria’s. “The price of the staple crop cassava has risen as high as 150% in some areas, while rice and maize harvests later in the year are expected to fall short. This is primarily due to worker health and quarantine zones reducing labor, according to a World Bank report on Ebola’s economic impact,” Healio reported. In addition, Liberia’s rubber production has also been disrupted; the World Bank has estimated that 2014 export revenues for West Africa’s worst-hit country will plunge 20 percent, down from an initial estimate of $148 million.

Tourism: Africa is a top tourist destination, and Ebola is certainly affecting travel to the continent. That is especially true in the three worst-hit countries: Liberia, Guinea and Sierra Leone. “Screenings and restrictions for air travel from countries at the heart of the outbreak have limited international flight,” Healio reported. The World Bank said that commercial flights to those three countries have fallen sharply since August, when the outbreak really began to pick up steam.

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