International credit rating agency Fitch Ratings has indicated that the Mpox outbreak could negatively impact economic activities and strain the fiscal positions of African nations.
According to The PUNCH, in a report released on Wednesday, Fitch highlighted that if Mpox spreads more rapidly across sub-Saharan Africa, the virus and the measures to contain it could potentially hamper economic performance and deteriorate fiscal health in affected countries, adding to the burden on those directly impacted.
Nevertheless, Fitch noted that any adverse fiscal effects might be partially mitigated by increased support from donors, as well as official and multilateral partners.
According to the Nigeria Centre for Disease Control and Prevention, Nigeria has reported 40 confirmed Mpox cases out of 830 suspected cases as of last Friday.
On August 13, the Africa Centres for Disease Control and Prevention classified Mpox as a continental public health emergency.
In July and August, several Fitch-rated sub-Saharan African countries, including Côte d’Ivoire (BB-/Stable), Kenya (B-/Stable), Rwanda (B+/Stable), South Africa (BB-/Stable), and Uganda (B+/Negative), reported confirmed Mpox cases.
While the number of cases in most of these countries was relatively low, often in the single digits, Fitch raised concerns about possible underreporting in some regions.
“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 noted that a significant rise in Mpox cases could predominantly affect economic activities, stating, “The main impact on economies from the virus and the measures to counter it would likely be on consumption and production.”
The agency also pointed out, “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.”
Additionally, managing inflationary pressures could become challenging, particularly if food production or logistics face major disruptions.
“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,” it said.
Fitch reported that the World Bank estimated grants in 2014-2015 amounted to nearly 19 percent of GDP in Liberia, approximately 10 percent in Sierra Leone, and around 5 percent 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.
On Tuesday, the United States donated 10,000 doses of the Jynneos vaccine to Nigeria. Jynneos is FDA-approved for preventing smallpox and Mpox in adults aged 18 and older who are at risk of Mpox infection.
Mpox is a rare viral zoonotic disease, transmitted from animals to humans, that sporadically occurs in remote villages of Central and West Africa near tropical rainforests. It is caused by the Mpox virus, which is part of the Orthopoxvirus genus within the Poxviridae family.
So far this year, over 15,000 suspected Mpox cases have been reported across 12 African countries. Of these, more than 3,500 cases have been confirmed in the laboratory, with 26 resulting in death.
