Firms in Dar es Salaam are significantly less likely to receive any government support than those in Dodoma and Tanga.<sup>13</sup> On average, firms in Tanga are 17 (±5) percentage points more likely to get postdisaster governmental support than their counterparts in Dar es Salaam (table D.9, appendix D). Moreover, across all firms in the sample, every month that passes since the last disaster increases their likelihood of obtaining governmental help by 0.07 percentage points on average. This small but significant effect indicates that post-disaster government support tends to be “too little, too late”.

In summary, these results suggest that firms may lack financial resilience to extreme events. Disasters, such as flooding, are often regional events affecting multiple households and firms; but both community resilience and local governmental support are of insufficient size to be effective coping mechanisms. More transregional and national support mechanisms could help reduce risks and speed up recovery in the aftermath of a disaster.

# 6. Key messages

Leveraging novel data from a specialized firm-level survey, this paper presents new evidence on the impacts of natural hazards on Tanzanian firms. Flooding is the predominant disaster affecting businesses in Dodoma, Tanga, and Dar es Salaam, often destroying valuable production assets of Tanzanian firms. The study also reveals that firms are keenly aware of these risks and adjust their operations accordingly. The data suggest that firms have inefficient inventory holdings due to on-site flood risks or potential supply chain disruptions.

Overall, the findings from this firm survey highlight the potential of policy interventions in multiple areas to mitigate the adverse effects of disaster risks on firms.

## **Investments in more resilient transport infrastructure can ensure job accessibility, protect supply**

**chains, and reduce loss multipliers.** Disrupted transport infrastructure is the key driver of the indirect losses experienced by firms, leaving employees unable to come to work, and causing supply and delivery delays, which multiplicatively propagate through the entire supply network. Investing in the resilience of transport network – starting with the most critical network segments – can help to reduce the propagation of such disruptions and costs.

## **Flood prevention measures can prevent firms from adopting expensive coping measures and promote**

**business continuity.** Firms adapt their operations depending on the risks they face. Firms with higher risks of on-site flooding hold fewer inventories, are less likely to own an electricity generator, and have smaller supply networks. Firms that experience more frequent disruptions of infrastructure and service delivery systems tend to have more suppliers and hold larger inventories. These results suggest that firms face a trade-off between avoiding asset losses and bridging disruptions in case of a flood event. Supporting firms to strengthen resilience – both on-site and in their operations – can reduce the need for costly coping measures.

> 13 “Receiving any governmental support” in the aftermath of a disaster is defined as receiving help from local or national government as the most or second most important source of support.

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