Ebola has been dominating media coverage of Sub-Saharan Africa ever since a man stricken with the disease landed in Lagos in July. Despite the scary headlines, businesses must differentiate fact from fear in order to assess the virus’ potential impact on their West African operations. Here is what you need to know:

Which countries are directly affected by the disease?

Ebola has largely affected a few small markets within West Africa. These include Guinea, Liberia, and Sierra Leone – countries with small economies and under-resourced governments that have not been able to deal with the outbreak effectively. As of late October, approximately 4,869 deaths were reported in the three countries, and the World Health Organization (WHO) expects many more people to be infected with the virus.

As of publication, a two year old girl died from the virus in Mali after traveling to Guinea, sparking fears over more infections in Mali.

After reporting one and seven deaths respectively, both Senegal and Nigeria are now officially declared Ebola-free after 42 days without new cases. Nigeria’s efficient response to the outbreak has impressed analysts and the WHO.

(Above) A map published in the WHO highlights affectd areas. Most multinationals operating in the region are present in the three largest economies: Nigeria, Ghana, and Côte d’Ivoire. All countries are on high alert but currently Ebola-free.

(Below) An overview of West Africa.

What are the economic repercussions?

SIERRA LEONE, LIBERIA, AND GUINEA: The World Bank revised down 2014 GDP growth forecasts for all three countries. Guinea is expected to grow 2.4% YOY, down from a previously forecasted 4.5% YOY. Liberia is forecasted to grow 2.5% YOY, down from 5.9% YOY, and Sierra Leone 8.0% YOY, down from 11.3% YOY. The worst-hit sectors in all three countries are agriculture, services, and mining. Ongoing infrastructure projects are at a standstill. These economies are expected to suffer further in 2015, as the crisis shows no sign of abating.

Despite the economic and health crisis that is severely impacting these three countries, the economic ramifications on the rest of West Africa remain small. Sierra Leone, Liberia, and Guinea only make up 2.0% of West Africa’s combined nominal GDP of US$ 700 billion. Other regional markets remain attractive because of successful containment measures and inherently large business opportunities.

NIGERIA: In Nigeria, the panic over the Ebola outbreak directly impacted consumer spending as Nigerians turned away from public places and prioritized consumption at home. Now that the country is officially Ebola-free, Nigerians are once again frequenting nightclubs and markets, both formal and informal. However, the aviation, hospitality, and tourism sectors will remain affected as business visitors reduce travelling to the region.

CÔTE D’IVOIRE: The government closed Côte d’Ivoire’s borders with Liberia and Guinea. The western part of the country is one of the most fertile regions for cocoa, Côte d’Ivoire’s primary export. Border closures restrict the movement of international cocoa exporters and statisticians who calculate output forecast for the upcoming October harvest. As a result, traders and exporters will not have accurate forecasts to predict the current cocoa crop, which could adversely impact exports and weigh on Côte d’Ivoire’s GDP growth.

GHANA: In Ghana, the impact of the disease is less direct but still felt by businesses. As the local representative of an international organization put it, “a lot of businesses and embassies in Accra are devoting a lot more time to Ebola. Freaking out would be a good way to put it. While they are not changing strategies, they are definitely losing productivity as they’re putting all kinds of people just on monitoring what’s going on in neighboring countries, having daily briefings on Ebola news, etc.“

ON WEST AFRICA: While the three most affected countries only play a minor role in West Africa’s economy, fears over a spread of the outbreak still persist and continue to impact trade in the region. As the number of infections increases in Guinea, Sierra Leone, and Liberia, so does the risk of the disease crossing into other countries as the recent incident with the Malian girl represents.

At a time when African governments are keen to accelerate regional integration, Ebola is instead driving separation, stigmatization, and alienation. Cross-regional infrastructure projects, supposed to increase linkages in the region, are slowing down. The gap between wealthier and poorer countries in the region is likely to widen; particularly as foreign investors are turning their backs on the mineral rich and once fast-growing Liberia, Guinea, and Sierra Leone.

ON AFRICA OVERALL: Although countries outside of West Africa have not reported any Ebola infections from this outbreak of the disease, they remain affected by the virus – both as victims and benefactors.

Africa’s improved international reputation is taking a beating, as the continent is now associated with Ebola in the media. The new stigma against Africa is not just about perceptions, but it also has practical implications: Korean Air Lines suspended flights to Nairobi, despite being in East Africa. Even South Africa is losing tourist revenue as travel bans scare travelers away from the whole continent. Although these consequences remain relatively small in their scope, they reveal how the Ebola virus has tainted Africa’s image abroad.

That being said, the continent continues to attract substantial attention from investors. FSG’s recently updated Frontier Market Sentiment Index, which measures corporate sentiment towards frontier markets, shows that five out of the top 10 markets tracked globally by investors are in Africa. Of the top 20 markets, 12 are in the continent. While Nigeria remains the most attractive market overall despite fears about Ebola, Kenya in East Africa has jumped from fifth to second place, while various North African countries have also seen a spike in interest. This highlights that more companies are shifting focus to other regions in Africa as they delay the execution of their West Africa expansion.

What does the Ebola outbreak mean for MNCs?

Multinationals should expect commercial activity across their West Africa operations to be marginally subdued this quarter and the next, as business and consumer demand slows because of the restricted movement of goods and people.

However, as in all crises, some sectors of the economy also benefit. Governments across West Africa are spending a larger-than-planned part of their 2014/2015 budgets on healthcare and measures to contain the disease. Companies selling materials used for the screening and treatment of the disease will see a spike in sales. Companies selling products widely perceived to protect from potential infection, such as hand sanitizers and antibacterial soap, will also benefit.

The sectors directly related to the fight against Ebola are not the only ones that will benefit from the crisis. E-commerce, already increasing in popularity in the last three years in Nigeria, has received a real boost as people avoided public places.

What happens next?

It is difficult to predict if the disease will spread to countries it has so far spared. Guinea, Sierra Leone, and Liberia have not received the international assistance they need to fight the disease, which heightens the risk of it crossing borders. So far, containment measures have been successful in Senegal and Nigeria. Governments are implementing tough measures to control borders, which should hopefully prevent it from affecting larger parts of West Africa.

What should MNCs do next?

• Outline a contingency plan: A contingency plan allows companies operating in the area to manage risks and seize opportunities as they materialize. A contingency plan could, for example, detail alternative work locations for employees, outline strategies to deal with transport disruptions, and define a marketing strategy in response to the challenging external environment. For example, multinationals can adapt packaging for consumption at home rather than in public places.
• Educate staff, both local and international: Given that this is a health crisis, MNCs need to articulate time and over again the need for washing hands and being vigilant health-wise to their local partners. Local staff should implement simple measures to protect themselves, while international staff should be educated about the disease and the relative difficulty of infection. It is important that employees travelling to the region are not stigmatized within the company, as this will lower productivity and decrease employee’s willingness to work in the region, thus impacting long-term plans for West Africa.
• Don’t generalize: Executives need to monitor the situation closely on the WHO website, differentiate clearly the risks by country, region and city, and reduce travel only to affected areas. For example, while it is unwise to travel to quarantined areas in Sierra Leone at the moment, visiting Ghana and Nigeria is very low risk.
• Adopt a wait-and-see mode but don’t change plans: Most multinationals operating in the region have adopted a wait-and-see mode until the crisis subsides, but are not changing their investment strategies as the opportunity in the region’s larger economies is too big to ignore. In fact, companies should take advantage of the current lull to position their business for growth once normality returns to the markets.
• Highlight the companies’ commitment to countries, despite the crisis: Healthcare companies can take the current outbreak as an opportunity to gain customer loyalty and market share by providing help and support where it is most needed.
• Prepare for trends that are here to last. The popularity of E-commerce has been enhanced by Ebola and is here to stay. Plan your e-commerce strategy for Nigeria now.