Liberia has been hit hardest by the Ebola epidemic and in addition to its devastating health consequences, the disease has transformed the local economy. The crisis began in March with small-scale outbreaks in rural areas, then reached full-scale in July in Monrovia, Liberia’s capital. On August 6, the Liberian government and the World Health Organization declared a state of emergency. Bodies were piled in the streets as the disease overwhelmed the country’s weak health care system, and a series of military quarantines only inflamed the situation.
Premise started tracking food prices in Monrovia on September 8, and throughout the month we observed upward pressure on prices (our Liberia indices and data are freely available at data.premise.com). The price of rice, Liberia’s primary food staple, increased 12% during September. Moreover, we saw significant price differences across the city. Prices in neighborhoods with the most exposure to Ebola were 8-12% higher on average than relatively unaffected neighborhoods. As the disease tore through the city, market sellers avoided the worst-hit areas and trade declined.
The situation in Monrovia has improved remarkably in the past month. The number of infections has dropped, mostly due to the meticulous precautions that Liberians now employ to combat Ebola’s spread. Liberians resist the urge to greet friends with the country’s famous handshake, and every business requires their customers to wash their hands with chlorine before entering.
As Liberians have adjusted to this new “normal,” so too have the markets. The steady upward pressure on prices that occurred over the summer has reversed. Food prices are no longer higher in the neighborhoods hit hardest by Ebola. Markets in Ebola-affected neighborhoods, such as Duala market, are bustling once again, and consumers in these areas now have access to the same goods at the same prices as people elsewhere in the city (see Figure 1).
The economic consequences of Ebola are more apparent outside the capital city. In many towns, local officials have closed the market areas because they fear the crowds will spread the disease, which means regional market traders—often women entrepreneurs—no longer travel around the country selling vegetables and other local produce. Instead, people in rural areas buy their food from informal “everyday” markets where locals sell whatever the nearby villages can produce. Since the market stalls remain off limits, these small-scale traders sell their goods from blankets on the side of the road (see Figure 2). Because regional trade networks no longer function, prices for vegetables can be low in producing regions while other regions experience shortages and scarcity.
Ebola has also affected the country’s ability to produce food. Rice farmers in Lofa County, located in northwestern Liberia, traditionally rely on large groups to weed and harvest their crops. As Lofa was hit hard by Ebola, these communal farming groups broke down and the rice harvest is expected to be below average this year. Fortunately, farmers in less-affected parts of the country seem to be carrying on despite Ebola. The rice harvest has just begun, and farmers in areas such as Nimba County expect a normal harvest (see Figure 3).
Perhaps the biggest challenge facing the rural economy is the border closure between Liberia and Guinea, which is usually bustling with large trucks and local traders, and is now sealed. Although locals near the border report that some small-scale smuggling is still possible, the markets now rely entirely on locally produced goods and imports from Monrovia.
Traders in Monrovia are seizing the opportunity created by the border closure. Trucks laden with goods from the capital ply the difficult roads and ensure that rice and other items are plentiful in the markets. A 25 kg. bag of parboiled rice sells for approximately LD1,550 (US$18.24) in the capital city. By the time that bag reaches the town of Zwedru, 500 km. from the capital, the price is LD1,800 (US$21.18), a 16% increase that reflects the difficulty of transporting goods in Liberia. In the past week alone, the only highway linking the capital to Zwedru has been cut twice by lorries stuck in the mud (see Figure 4).
The Ebola outbreak has also led to the proliferation of health quarantine checkpoints along the highways (see Figure 5). Travelers wash their hands with chlorine and have their temperatures taken; those with fever are not allowed to pass. These checkpoints are an important weapon against the spread of the disease, but some officials at these checkpoints also ask for small payments from people passing through, increasing the transport costs even further for traders.
Ebola has disrupted markets in Liberia and contributed to higher prices for many goods, particularly in rural areas, but the markets have responded to the new environment and—more than anything—-demonstrate the resilience of the Liberian people.
When borders reopen and people once again move freely, the local markets will recover, slowly. The World Bank estimates that Ebola will cause the Liberian economy to contract by up to 5% and this economic damage will take years to repair. For now, though, the country remains vigilant and hopeful that the number of infections will continue to decline.