Fitch Warns of Economic Risks from Mpox Outbreak in Africa

International credit rating agency Fitch Ratings has cautioned that the ongoing Mpox outbreak could negatively impact the economies of African countries and strain their fiscal positions. In a commentary released on Wednesday, Fitch highlighted that an escalation in the spread of Mpox in sub-Saharan Africa could increase the likelihood of economic disruptions and fiscal strain in affected countries, alongside the direct impact on those infected.

However, Fitch noted that any fiscal pressures resulting from such scenarios could be partly alleviated by additional funding from donors, as well as from official and multilateral partners.

As of last Friday, the Nigeria Centre for Disease Control and Prevention reported 40 confirmed cases of Mpox from 830 suspected cases nationwide. The Africa Centres for Disease Control and Prevention had earlier declared Mpox a continental public health emergency on August 13.

In July and August, several Fitch-rated sub-Saharan African nations reported confirmed Mpox cases, including Cote d’Ivoire (BB-/Stable), Kenya (B-/Stable), Rwanda (B+/Stable), South Africa (BB-/Stable), and Uganda (B+/Negative). Although the reported case numbers in these countries were generally low, often in the single digits, Fitch expressed concerns about potential underreporting.

Fitch emphasized that the emergency declaration underscores the potential for a rapid increase in cases, which could place financial pressure on affected countries. Citing past instances, the agency noted that virus outbreaks can have substantial economic and fiscal consequences, as seen during the COVID-19 pandemic and the Ebola epidemic of 2014-2015 in West Africa. The Ebola outbreak led to significantly reduced economic growth and widened budget deficits in the main affected countries—Liberia, Guinea, and Sierra Leone—although it was challenging to separate the effects of the virus from the simultaneous decline in commodity prices.

Fitch indicated that if Mpox case numbers were to rise significantly, the primary economic impact would likely be on consumption and production. It noted that tourism, a crucial industry for countries like Kenya, Rwanda, and Uganda, could be adversely affected. According to UN data, tourism accounted for 11%, 20%, and 19% of total goods and services export earnings in these countries, respectively, in 2022. There could also be inflationary pressures, especially if disruptions occur in food production or logistics.

Fitch also warned that fiscal metrics could deteriorate as weaker economic activity depresses tax revenues while government spending on healthcare and epidemic prevention rises. Although international assistance could help mitigate these effects, the extent and timing of such aid remain uncertain.

Drawing on past precedents, Fitch referenced World Bank estimates showing that in 2014-2015, grants reached nearly 19% of GDP in Liberia, almost 10% in Sierra Leone, and about 5% in Guinea. Despite this support, budget deficits in these countries were significantly wider during the period, even with the additional grants. Fitch stated that any impact on credit ratings would depend on the severity and duration of the economic and fiscal effects of Mpox and the scale of donor support.

In response to the outbreak, the United States recently donated 10,000 doses of the Jynneos vaccine to Nigeria. Approved by the U.S. Food and Drug Administration, Jynneos is used to prevent smallpox and Mpox in adults at risk of infection.

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