Publication: Floods and Their Impacts on Firms: Evidence from Tanzania
Date
2021-09
ISSN
Published
2021-09
Author(s)
Abstract
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. While
direct on-site damages from flooding can be substantial,
they tend to affect a relatively small share of firms.
Indirect impacts of floods are more prevalent and sizable.
Flood-induced infrastructure disruptions—especially
electricity and transport—obstruct the operations of firms
even when they are not directly located in flood zones. The
effects of such disruptions are further propagated and
multiplied along supply chains. The study estimates that
supply chain multipliers are responsible for 30 to 50
percent of all flood-related delivery delays. To cope with
these impacts, firms apply a variety of strategies. Firms
mitigate supply disruptions by adjusting the size and
geographical reach of their supply networks, and by
adjusting inventory holdings. By investing in costly backup
capacity (such as water tanks and electricity generators),
firms mitigate the impact of infrastructure disruptions. The
study estimates that only 13 percent of firms receive
government support in the aftermath of floods.
Link to Data Set
Citation
“Rentschler, Jun; Kim, Ella; Thies, Stephan; De Vries Robbe, Sophie; Erman, Alvina; Hallegatte, Stéphane. 2021. Floods and Their Impacts on Firms: Evidence from Tanzania. Policy Research Working Paper;No. 9774. © World Bank, Washington, DC. http://hdl.handle.net/10986/36282 License: CC BY 3.0 IGO.”
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