International credit rating firm, Fitch Ratings, has said that the Mpox outbreak may hurt the economic activities of African countries and weaken their fiscal positions.
In a commentary released on Wednesday, the ratings firm said that a potential acceleration in the spread of Mpox in sub-Saharan Africa could raise the risk that the virus and efforts to curb its impact hurt economic activity and weaken fiscal metrics in affected sovereigns, in addition to the suffering of those affected.
It, however, said that any fiscal impact under such a scenario would probably be partially offset by additional financing from donors and official and multilateral partners.
Last Friday, the Nigeria Centre for Disease Control and Prevention reported that Nigeria had recorded a total of 40 confirmed cases of Mpox out of 830 suspected cases across the country.
The Africa Centres for Disease Control and Prevention declared Mpox a continental security public health emergency on August 13.
Several Fitch-rated SSA sovereigns reported confirmed Mpox cases in July-August, including Cote d’Ivoire (BB-/Stable), Kenya (B-/Stable), Rwanda (B+/Stable), South Africa (BB-/Stable) and Uganda (B+/Negative).
While pointing out that in most of those countries, the number of confirmed Mpox cases was low, often in the single digits, Fitch raised concerns that there could be underreporting in some countries.
“The emergency declaration highlights the potential for case numbers to rise sharply, bringing the prospect of financial pressure for affected sovereigns.
“Virus outbreaks can have significant economic and fiscal effects, as was demonstrated by the COVID-19 pandemic and the 2014-2015 Ebola epidemic in West Africa. The latter shock resulted in sharply lower economic growth and a widening of budget deficits in the main affected countries, Liberia, Guinea and Sierra Leone, although it is difficult to disaggregate the effects of Ebola from those of the concurrent fall in commodity prices,” the rating agency noted.
Fitch remarked that in the event of a substantial increase in Mpox case counts, “The main impact on economies from the virus and the measures to counter it would likely be on consumption and production.”
It added, “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.
“Fiscal metrics would also be affected, 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 are uncertain.”
According to Fitch, the World Bank has estimated that over 2014-2015 grants reached nearly 19 per cent of GDP in Liberia, almost 10 per cent of GDP in Sierra Leone and about five per cent in Guinea.
“However, budget deficits in these countries were significantly wider on average over the period, even including grants, than they were in 2013. Rating effects would depend on the severity and the longevity of the economic and fiscal impact of the virus and the availability and size of donor support,” it asserted.
Meanwhile, the United States on Tuesday donated 10,000 doses of the Jynneos vaccine to Nigeria.
Jynneos is a vaccine approved by the Food and Drug Administration for the prevention of smallpox and Mpox in adults 18 years of age and older determined to be at risk for Mpox infection.
Mpox is a rare viral zoonotic infectious disease (i.e. an infection transmitted from animals to humans) that occurs sporadically, primarily in remote villages of Central and West Africa, near tropical rainforests.
It is caused by the Mpox virus, which belongs to the Orthopoxvirus genus in the family Poxviridae.
This year, more than 15,000 suspected Mpox cases have been reported in 12 African countries. Out of these, over 3500 cases are laboratory-confirmed, including 26 deaths.
