Lagos-based financial advisory and research firm, Financial Derivatives Company Limited (FDC), has forecast that the Nigeria may lose about $2 billion to the outbreak of the Ebola virus in the country.
The firm in a report titled: "Making Economic Sense of the Ebola Scare," made available to THISDAY at the weekend, listed sectors that would impacted mostly in the country to include aviation, hospitality and tourism, trade, medical and agriculture.
Analysing these sectors' contribution to the country's gross domestic product (GDP), it stated that though the chance of the outbreak going into a second quarter was very slim, it could extend the loss to $3.5 billion
The Boko Haram insurgency had been the headline news in Nigeria until July 25th when it was confirmed that Ebola had been imported into the country. Since then, fear, panic, disbelief and frustration has taken its toll as economic activities, particularly in Lagos, have gradually slowed.
Moody's announced that the outbreak of Ebola in Nigeria could lead to serious disruptions in some sectors of the economy with negative financial consequences.
"Whilst a small part of the Nigerian economy is already benefiting from the Ebola scare such as shop owners selling sanitisers, a larger part is experiencing losses," it stated.
The report showed that air transport, the second most used means of transportation after road., accounted forb0.09 per cent of Nigeria's GDP in first quarter of 2014.
But the report revealed that since the outbreak of Ebola in West Africa, several airlines including Arik Air, Asky, British Airways and Emirates have suspended flight operations to and from any of the Ebola affected countries. Saudi Arabia also suspended giving out visas to Muslim pilgrims from West African countries. Serious screening for Ebola has also begun at several international airports before passengers are allowed to board an airplane.
"We expect revenues in the aviation sector to plunge downwards, which would affect both the airlines and the support industry (handling companies, oil marketers, catering, duty free shops, etc.)," the report stated.
Commenting on the impact on the hospitality and tourism sector, it stated that preliminary information showed that many hotel and airline bookings in Lagos have been cancelled by in-bound travellers due to the scare of the virus.
"This is not surprising since India and Greece have openly advised their citizens to avoid non-essential travel to Nigeria and other Ebola-affected countries. It is estimated that restaurant visits in Lagos have already declined by 50 per cent. The accommodation and food services sector was approximately one per cent of total GDP in first quarter 2014.
"This amount is not negligible considering the importance that restaurants play in the lives of many working-class Nigerians. In addition, a direct implication of the low turnout to social events is a decline in the events management business," it added.
In first quarter of 2014, trade contributed 17.35 per cent to Nigeria's GDP. Trade and investment flows are critical to the external sector of the country and the West African region. The region enjoys almost a custom union with common external tariff and movement of visitors without visas.
"Since movement of people is restricted in and out of the affected regions, fewer goods will be equally transported. Air transportation is very critical to trade. Hence, a reduction in the number of international flights literally means a reduction in international trade flows. Domestic trade is also likely to be negatively affected significantly if the disease spreads," the report added.
On agriculture, it argued that there would be a decline in sales of several animals, even when they have not been linked to Ebola.
"Farmers or hunters living in areas where there is co-mingling of animals connected to Ebola will reduce their exploits. The hunters association in Nigeria has already complained about a slowdown in business due to experts' directive that people should abstain from consuming bush meat. Other meat sellers may also witness a reduction in patronage if the disease spreads further. In addition, in a bid to prevent illegal movement of Ebola-linked corpses across states, there will be many stops at checkpoints" it argued.