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IMF / LAGARDE EBOLA
STORY: IMF/ LAGARDE EBOLA
TRT: 1:18
SOURCE: IMF
RESTRICTIONS: NONE
DATELINE: 26 SEPTEMBER 2014, WASHINGTON DC
1. Wide shot, exterior,IMF
2. Med shot, Christine Lagarde walks up to the IMF
3. SOUNDBITE(English) Christine Lagarde, Managing Director,International Monetary Fund (IMF):
“The Ebola virus is causing not only terrible humanitarian damage on Sierra Leone, Guinea and Liberia, but it’s also causing economic damage. The three countries have asked for help. Today, we have approved a package of $130 million that will go to support those three countries.”
4.Wide shot, Lagarde speaking
5.SOUNDBITE(English) Christine Lagarde, Managing Director,International Monetary Fund (IMF):
“The money is going to help the three countries as budget support. They clearly need to use those funds to fight the consequences of the virus. It’s not going to cover all their needs. There is more than that, it’s about 40% of their current needs which is why it is so important that other international institutions, other donors actually contribute as well to support and help the three countries.”
6.Wide shot, IMF seal
As the death toll from Ebola rises and the economic impact of the crisis spreads, the IMF has approved a total of $130 million of emergency financial assistance for Guinea, Liberia, and Sierra Leone, the three West African countries at the center of the epidemic.
The IMF Executive Board approved the financing on an accelerated, emergency basis September 26 in order to help cover a substantial portion of a financing gap, provisionally estimated to total some $300 million, that has emerged from the humanitarian crisis.
The countries are grappling with the Ebola outbreak with fragile institutions and ill-equipped medical systems, and are facing substantial revenue shortfalls and additional spending needs to combat the outbreak.
“The Ebola virus is causing not only terrible humanitarian damage on Sierra Leone, Guinea and Liberia, but it’s also causing economic damage. The three countries have asked for help. Today, we have approved a package of $130 million that will go to support those three countries,” IMF Managing Director Christine Lagarde said.
The involvement of the IMF in the crisis reflects the mounting macroeconomic impact of the crisis on countries that were making strides in overcoming years of fragility and instability.
The additional financial assistance to help combat the epidemic fits within the Fund’s mandate to support its member countries in times of economic and social stress as they address balance of payments and fiscal financing needs.
“The money is going to help the three countries as budget support. They clearly need to use those funds to fight the consequences of the virus. It’s not going to cover all their needs. There is more than that, it’s about 40 percent of their current needs which is why it is so important that other international institutions, other donors actually contribute as well to support and help the three countries,” Lagarde said.
The financing arrangements amount to 25 percent of each country’s quota at the IMF, and break down as follows:
Guinea: The Board approved $41.4 million under the Rapid Credit Facility (RCF). The Ebola outbreak started in Guinea by end-2013 and intensified sharply from July, although it has been hit somewhat less hard than its neighbors. The country’s short-term economic outlook has deteriorated substantially, with 2014 growth expected to fall from a 4.5 percent projected at the beginning of the year to 2.4 percent. Guinea is making satisfactory progress under its existing arrangement under the Extended Credit Facility (ECF) but will receive emergency funding under the RCF arrangement because the most recent review under the ECF arrangement is pending.
Liberia: The Executive Board approved a $48.3 million augmentation of an existing arrangement under the ECF. At this point Liberia is the country most affected by the epidemic, which has overwhelmed its capacity to respond. In addition to the heavy human toll, the outbreak is having a severe economic and social impact that could jeopardize gains from a decade of peace. Based on preliminary estimates, real GDP growth is projected to decline from 6 percent to 2.5 percent in 2014 as the key sectors of the economy, namely mining, services, and agriculture, are all severely disrupted.
Sierra Leone: The country will receive a $39.8 million ECF augmentation. Ebola has spread to the entire country, severely affecting the social and economic fabric. Growth is slowing—from 11.3 percent to 8 percent this year, based on the August estimate—inflationary pressures have intensified, and new balance of payments and fiscal financing needs have emerged.
The Ebola epidemic—a haemorrhagic fever that originates in wild animals—emerged in Guinea early this year and subsequently spread to neighboring Liberia and Sierra Leone. According to the World Health Organization (WHO), about 6,000 people are known to have been infected in the three countries (with a handful of cases in Nigeria and Senegal, where the virus now appears contained) and around 3,000 are reported to have died.
However, the actual toll is likely to be higher, as there is evidence of substantial under-reporting of cases and deaths. Furthermore, the pace of infection has accelerated in recent weeks, particularly in Liberia and, to a lesser extent, in Sierra Leone.
The three affected countries have struggled to mount an effective defense against Ebola’s spread in large part because of extremely limited public health capabilities. An increasing number of international organizations have become involved, including the United Nations and WHO, the World Bank, the African Development Bank, and leading nongovernmental organizations such as Doctors Without Borders and the Red Cross.
Governments as well as private local and international donors also have committed significant resources.
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