Floods and their impacts on firms: Evidence from Tanzania
This study explores how businesses in Tanzania are impacted by floods, and which strategies they use to cope and adapt. These insights are based on firm survey data collected in 2018 using a tailored questionnaire, covering a sample of more than 800 firms. To assess the impact of disasters on businesses, the study considers direct damages and indirect effects through infrastructure systems, supply chains, and workers.
The results from this study confirm that natural shocks have substantial impacts on firms. A single flood in 2018 directly damaged and destroyed an estimated $7.8 million worth of Tanzanian firms’ assets. The study also finds that, in the aftermath of a disaster, indirect effects—particularly those resulting from disrupted transport infrastructure—prevent employees in up to 40 percent of firms from coming to work and hinder firms' ability to receive supplies on time or to maintain sales. It also finds that 30–50 percent of all supply and delivery delays of firms in the study region can be attributed to the propagation of shocks through supply networks. The study presents evidence that firms 3 perform operational adjustments to adapt to disaster risk and that these adjustments can depend on the type of disaster risk experienced.
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