The Impact of Ebola Virus Disease on Government Expenditure in Sierra Leone

Abstract

Emerging infectious disease like EVD adversely affects government tax and expenditures in many affected African countries. This has the potential to indirectly threaten the lives and livelihoods of more than 22 million people in Ebola-affected areas (ACAPS 2014). The epidemic may also have a long-term socio-economic and political implications on the affected country's development trajectory (Piot 2014). The first episode of the disease was first recorded in the Democratic Republic of Congo in 1976. The most recent outbreak occurred in Sierra Leone, Liberia, and Guinea. The origin of EVD (the primary infectious event) is yet to be known in spite of various studies that have been carried out on the epidemic. According to Nadia, (2015) an index case was identified four times and hypothesized in two other instances among the twenty-one documented outbreaks of EVD in Africa. For instance, as at 2016, there were estimated 28,639 suspected, likely, and established cases of EVD and a projected 11,316 deaths from the 2014 epidemic of EVD in West Africa (CDC 2016). More so, there were 2427 reported cases and 1597 deaths in all other outbreaks of Ebola (CDC 2016). The Ebola outbreak began slowly in Sierra Leone and quickly degenerated to an epidemic between May and June, 2014. An ex-post examination indicated that the first case recorded in Sierra Leone was a woman who was a guest at the home of the index case in Meliandou, Guinea (WHO 2015).

How Do Pandemics Affect Government Expenditures?

“…First, pandemics directly disrupt labor force and human capital due to its high infectivity (cases) and deaths, and then transmit the adverse effects to the economy (Lee & Mckibbin, 2004). Second, pandemics dampen consumer demand and increase prevention costs (Kum et al, 2019), putting a strain on individual wealth, business income and growth and government finances. Third, pandemics undoubtedly adversely influence foreign trade and foreign direct investment.…”

“…Following Kum et al (2019), we select other variables that affect government expenditure as control variables. These include population growth, life expectancy, gross domestic product (GDP) per capita, government revenue, and national income per capita.…”

“…We see that the coefficient of the pandemic variable ( ) is 1.207, but statistically insignificant, implying that the outbreak of pandemics increases government expenditure. The reason might be that pandemics have a negative impact on public revenues and thus put government finances under pressure (Kum et al, 2019;Makananisa, 2020). Governments will thus transfer budget expenditures from other projects to pandemic management when implementing pandemic interventions, and so the increase in total government expenditure is insignificant.…”

“…Governments increase expenditure on public health in times of pandemics and further boost expenditures on economic recovery during the post-pandemic years. This hypothesis test is motivated by the endogenous growth model of public expenditure (Kum et al, 2019). Government expenditures are an integral part of economic growth, but the economic damage caused by pandemics strains government revenues.…”

The cost of public health interventions to respond to the 10th Ebola outbreak in the Democratic Republic of the Congo

“…However, their main focus was to capture the general economic impact of EVD on affected countries. 11 12 One study attempted to quantify the cost of an EVD case during the 2015 outbreak. 13 In this study, the cases examined were organised by severity and outcome.…”