4. Summary of descriptive results on the scale and type of disaster losses Firms incur a wide range of losses due to disasters, both in terms of direct damages and indirectly transmitted costs. Based on the data collected for this study, Appendix B offers a full discussion of the scale and type of firms’ disaster losses.

The survey data reveals that flood risks are high throughout most of Tanzania and confirm that firms face substantial recurring losses. Indeed, 47.7 percent of firms state that they perceive at least moderate risk of on-site flooding, and 26.8 percent perceive the risk to be high or very high. Firms also recognize potential indirect effects on their operations—for example, due to supply chain or infrastructure disruptions. Indeed, 64.2 percent of firms perceive at least moderate risk of indirect risks; 33.6 percent perceive the risk to be high or very high. The survey also confirms that floods are the predominant natural hazard to Tanzanian firms: 16.6 percent of all firms reported having experienced flooding on their premises (21.4 percent in Dar es Salaam).

Self-reported data from this survey suggest that firms in Dar es Salaam, Dodoma, and Tanga incurred at least $7.6 million in direct losses and damages due to flooding on business premises in 2018. This estimate is a lower bound estimate for several reasons: First, losses incurred by informal firms are not included, as they were not sampled for data collection. Second, firms only reported losses for the year of their worst disaster experience. For 58.6 percent of firms the worst flood experience was in 2018 and hence data for these firms are observable and included in the estimate. For the other 41.4 percent of firms’ losses in 2018 are not observable and not included in the estimate. Third, the estimate refers to a single event (e.g. the major April 2018 floods), rather than annualized losses.

For the average firm in the three study areas, direct damage due to flooding exceeded monthly operational costs by a factor of 1.32 (±0.37). However, for at least 75 percent of businesses, damages were smaller than their monthly operational costs, while for 5 percent of firms flood damage costs exceeded monthly operational costs by a factor of at least 8.13 (Table 5).

**Table 5: Cost factors: damage due to flooding on business premises relative to monthly operational costs**

|||||**Q**|**uantiles**|||
|---|---|---|---|---|---|---|---|
|**Damage category**|**Mean**|**Standard**<br>**deviation**|**25%**|**50%**|**75%**|**95%**|**99%**|
|Buildings|0.42|0.15|0|0|0.16|1.93|6.5|
|Equipment, machinery,|0.56|0.14|0|0|0.14|4.05|5.38|
|and assets||||||||
|Access to site|0.31|0.25|0|0|0|0.9|10.72|
|Other|0.03|0.02|0|0|0|0.07|2|
|**Total direct damages**|**1.32**|**0.37**|**0.01**|**0.17**|**0.87**|**8.13**|**13.35**|

_Note_ : Factors <1 indicate that flood damages are smaller than monthly operational costs, factors >1 indicate the opposite.

Besides asset damages, firms also reported significant sales losses in the aftermath of floods. About 40 percent of firms reported that one week after flooding, their sales had “somewhat reduced,” around 11 percent reported that sales had halved, while approximately 16 percent of firms reported a short-lived increase in sales. Notably, there is a significant delay in sales losses affecting firms, with more firms 9