Are Sectors Hit Equally by Covid – 19 Pandemic? Some Insights from Assessing the Economic Impacts of the Pandemic on Selected Sectors in Tanzania

Abstract

This study uses Input-Output modelling technique to analyze the impact of COVID 19 across different sectors of the economy. This type of modeling takes into account the inter-sectoral impacts of different types of exogenous “shocks” to an economy. The sectors that were assumed to be hard hit are used to determine the impact of COVID 19 and these include transport, wholesale and retail trade, financial services and manufacturing with varying scenarios. Findings show that while the pandemic will affect economic growth, the highest contributors of the overall shocks to GDP are accommodation (-TZS 632 Bill), financial services (-TZS 381 Bill), electricity supply (-TZS 211 Bill), manufacturing (-TZS 175 Bill) and agriculture and livestock (-TZS 114 Bill) respectively. Also, shocks in the manufacturing sector had more effect in absolute terms and in the number of other sectors it has affected. Only financial and accommodation services experienced positive effects, the rest experienced  negative effects. In addition. all the analyzed sectors (i.e. manufacturing, retail trade, accommodation and transport), the effects in respective sectors affect financial services positively, partly on account of increased need for more financial supports for most hardly hit sectors. We also note that while the pandemic shocks are likely to have significant adverse impacts on the economy not all sectors will end up  being negatively affected by shocks, some sectors  such as ICT, financial sector, the health-related goods and some services sectors may benefit from the shocks. These results imply that since manufacturing and transport sectors have higher multiplier effects and more forward or backward linkages, then any government fiscal stimulus packages should deliberately focus on these sectors.