Ebola panic hits South Africa in the pocket –

Source:
Business Times

Ebola panic hits South Africa in the pocket

by Thekiso Anthony Lefifi, 2014-11-02 13:57:49.0

EBOLA has not yet hit South Africa, but companies here who have sailed north looking for extra profit are feeling some rather sickening economic effects.

This week, Finance Minister Nhlanhla Nene revealed that the government had allocated an extra R33-million to prevent the spread of Ebola to this country. He also said South Africa would provide support to the continent’s worst-affected nations: Guinea, Liberia and Sierra Leone in West Africa.

More than 4 500 people have died in those three countries since the outbreak last December, and the World Health Organisation has warned that there could soon be as many as 10 000 new cases per week.

The World Bank says that unless the outbreak is contained, it could cost $32.6-billion over two years, causing Liberia to shed 12% of its GDP and Sierra Leone 8.9%.

But even though South Africa is free from Ebola, local tourism companies are taking a big hit: holidaymakers from the Far East, Europe and North America are cancelling their travel plans to the continent.

One&Only Cape Town, owned by Sun International, has already received a number of cancellations.

Marcel von Aulock, CEO of the Tsogo Sun group, told shareholders last week that they were expecting an increase in cancellations due to the Ebola panic.

Etienne van Wyk, programme manager for healthcare at research and consulting firm Frost & Sullivan Africa, says that local operators have seen between 80% and 90% of tours from Asian countries being cancelled.

Airlines, including Comair, South African Airways and new operators such as FlySafair, will also feel the impact.

Andrew Zarnett, an analyst at Deutsche Bank, estimated that the 2003 Sars epidemic cost Asian airlines more than $6-billion – and Ebola could have a greater impact on the aviation industry now.

Of those South African companies that have set up business elsewhere in Africa, the one with the widest reach is probably MTN.

The cellphone company, which has operations in West Africa, quarantined one of its employees, but it was a false alarm. Chris Maroleng, corporate affairs executive at MTN, said that some of the staff member’s colleagues were also tested and cleared.

Barclays Africa, which owns Absa, has operations in more than 12 countries, including Liberia. However, the bank said the Ebola virus has had no material effect, but there were “appropriate and scalable” contingency plans in place.

Liberty Holdings, whose subsidiary, Stanlib Asset Management, has just bought Standard Bank Investment Management Services in Ghana, is also watching the situation.

Thiru Pillay, chief risk officer for Liberty, said the costs to the company had been limited to awareness and monitoring activities. “Should the risk increase, appropriate business responses will be activated. Travel into the affected areas is being managed in accordance with our travel risk policy.”

South African companies flocking to set up shop in Nigeria have been calmed by the news that the continent’s most populous country has been declared Ebola-free.

The worst-affected by Ebola has been ArcelorMittal SA, which has been forced to cancel its plans to triple its iron ore production in Liberia from five to 15 million tons a year.

The IMF is expected to cut its forecast for economic growth in sub-Saharan Africa this year to 5% from 5.5% due to the outbreak.

But it is not only Africa which is feeling the effects of Ebola: China has committed medical supplies worth $5-million to the three hardest-hit nations, and is also treating eight individuals suspected of having contracted the disease.

Although the R33-million announced by Nene earlier this week is to be welcomed, treating Ebola patients can be expensive.

The US spent an estimated $1 000 an hour – about R10 860 – treating its first reported patient, Thomas Eric Duncan. The total bill, including indirect costs such as disposing of contaminated waste, was $500 000.

This article was first published in Sunday Times: Business Times

BIG FIGHT: Volunteers train at a Doctors Without Borders replica of Ebola treatment centres in Brussels, before being sent to help fight the spread of the deadly virus in Africa. Picture: AFP

BIG FIGHT: Volunteers train at a Doctors Without Borders replica of Ebola treatment centres in Brussels, before being sent to help fight the spread of the deadly virus in Africa. Picture: AFP

EBOLA has not yet hit South Africa, but companies here who have sailed north looking for extra profit are feeling some rather sickening economic effects.

This week, Finance Minister Nhlanhla Nene revealed that the government had allocated an extra R33-million to prevent the spread of Ebola to this country. He also said South Africa would provide support to the continent’s worst-affected nations: Guinea, Liberia and Sierra Leone in West Africa.

More than 4 500 people have died in those three countries since the outbreak last December, and the World Health Organisation has warned that there could soon be as many as 10 000 new cases per week.

The World Bank says that unless the outbreak is contained, it could cost $32.6-billion over two years, causing Liberia to shed 12% of its GDP and Sierra Leone 8.9%.

But even though South Africa is free from Ebola, local tourism companies are taking a big hit: holidaymakers from the Far East, Europe and North America are cancelling their travel plans to the continent.

One&Only Cape Town, owned by Sun International, has already received a number of cancellations.

Marcel von Aulock, CEO of the Tsogo Sun group, told shareholders last week that they were expecting an increase in cancellations due to the Ebola panic.

Etienne van Wyk, programme manager for healthcare at research and consulting firm Frost & Sullivan Africa, says that local operators have seen between 80% and 90% of tours from Asian countries being cancelled.

Airlines, including Comair, South African Airways and new operators such as FlySafair, will also feel the impact.

Andrew Zarnett, an analyst at Deutsche Bank, estimated that the 2003 Sars epidemic cost Asian airlines more than $6-billion – and Ebola could have a greater impact on the aviation industry now.

Of those South African companies that have set up business elsewhere in Africa, the one with the widest reach is probably MTN.

The cellphone company, which has operations in West Africa, quarantined one of its employees, but it was a false alarm. Chris Maroleng, corporate affairs executive at MTN, said that some of the staff member’s colleagues were also tested and cleared.

Barclays Africa, which owns Absa, has operations in more than 12 countries, including Liberia. However, the bank said the Ebola virus has had no material effect, but there were “appropriate and scalable” contingency plans in place.

Liberty Holdings, whose subsidiary, Stanlib Asset Management, has just bought Standard Bank Investment Management Services in Ghana, is also watching the situation.

Thiru Pillay, chief risk officer for Liberty, said the costs to the company had been limited to awareness and monitoring activities. “Should the risk increase, appropriate business responses will be activated. Travel into the affected areas is being managed in accordance with our travel risk policy.”

South African companies flocking to set up shop in Nigeria have been calmed by the news that the continent’s most populous country has been declared Ebola-free.

The worst-affected by Ebola has been ArcelorMittal SA, which has been forced to cancel its plans to triple its iron ore production in Liberia from five to 15 million tons a year.

The IMF is expected to cut its forecast for economic growth in sub-Saharan Africa this year to 5% from 5.5% due to the outbreak.

But it is not only Africa which is feeling the effects of Ebola: China has committed medical supplies worth $5-million to the three hardest-hit nations, and is also treating eight individuals suspected of having contracted the disease.

Although the R33-million announced by Nene earlier this week is to be welcomed, treating Ebola patients can be expensive.

The US spent an estimated $1 000 an hour – about R10 860 – treating its first reported patient, Thomas Eric Duncan. The total bill, including indirect costs such as disposing of contaminated waste, was $500 000.

This article was first published in Sunday Times: Business Times

Facebook

Twitter

YouTube