THE collapse of a multi-story building in Kariakoo on Saturday morning at around 9:00 AM local time has resulted in 16 fatalities with at least 86 people rescued and five survivors undergoing treatment, sending shockwaves through Dar es Salaam.
The tragedy, beyond the immediate human toll, has laid bare the vulnerabilities in Tanzania’s urban infrastructure and raised urgent questions about the financial and economic repercussions of poor building standards.
Kariakoo, the commercial heart of Dar es Salaam, represents a key driver of Tanzania’s economy, with an estimated 2bn/-in daily trade activity.
The disruption caused by this collapse threatens not only the livelihoods of traders directly affected but also the broader economic ecosystem that relies on the district’s vibrancy.
One survivor, a shop owner inside the building at the time of the collapse, recounted hearing a loud cracking sound before everything began to crumble, trapping him under debris until he managed to crawl out with minor injuries.
A passerby who narrowly escaped described noticing the building shaking, followed by people screaming as it collapsed within seconds, forcing him to run for safety.
A nearby construction worker witnessed the building swaying before collapsing “like a deck of cards,” describing the scene as terrifying and recounting how workers immediately rushed to assist those trapped.
These harrowing firsthand accounts underscore the suddenness of the disaster and the grave danger faced by those in and around the building, raising urgent concerns about building safety standards and regulatory enforcement in Dar es Salaam.
Beyond the human toll, the financial impact underscores broader systemic failures. The building, located at the junction of Congo and Mchikichini Streets, housed numerous businesses dealing in clothing, electronics and general merchandise.
Early reports indicate that many traders lost their entire stock, with conservative estimates suggesting total merchandise destruction valued at 5–7bn/-.
This figure is based on the density of businesses within the building and the typical nventory levels maintained by traders in such high-demand commercial areas.
For perspective, Kariakoo’s traders are responsible for meeting a significant portion of the city’s retail needs, with hundreds of vendors operating in a concentrated area.
The sudden loss of goods not only impacts individual livelihoods but also disrupts supply chains, amplifying the economic fallout. The financial toll extends beyond the traders directly affected.
The surrounding businesses that depend on Kariakoo’s foot traffic are also experiencing significant revenue losses.
During the recovery period, trade activity in the area s expected to decline by at least 30 per cent, translating to an estimated 600m/- in daily lost revenue for nearby shops, restaurants and transport operators.
A prolonged disruption could push these losses into the billions, particularly if rebuilding efforts are delayed.
The government expenditures related to the response are another critical aspect of the financial impact.
Rescue operations, involving the deployment of emergency teams, heavy machinery, and medical care for victims, represent unplanned costs.
Drawing from similar incidents, such as the 2017 Lagos building collapse in Nigeria, where immediate response costs exceeded 1 million US dollars, the financial burden for Kariakoo’s rescue efforts is estimated to range between 1–2bn/-.
Additionally, the cost of rebuilding the structure could reach S 5–10bn/-, depending on the scale and complexity of the reconstruction. The long-term financial risks are equally concerning.
Kariakoo’s collapse highlights systemic issues in Tanzania’s construction sector, which contributes approximately 13 per cent to the national GDP Weak enforcement of building codes, poor oversight and corruption are recurring challenges, undermining investor confidence in urban real estate.
This collapse could slow investment in Dar es Salaam’s booming construction sector, particularly in high-density areas.
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The ripple effects may be felt across related industries, including retail, transport, and logistics, which rely heavily on stable and well-regulated infrastructure. Globally, the financial impact of similar disasters underscores the high cost of inadequate urban planning.
The 2013 Rana Plaza collapse in Bangladesh resulted in 10 million US dollars in structural damage and destroyed merchandise, with indirect losses in delayed supply chains running into hundreds of millions of dollars.
In Mexico, the 2017 earthquake caused over 4 billion US dollars in damages, much of which was attributed to buildings that failed to meet updated seismic safety standards.
Closer to Kariakoo’s context, the Lagos school building collapse in 2019 resulted in direct costs exceeding 500,000 US dollars, alongside the long-term financial strain on families and businesses.
Insurance claims will play a critical role in the financial recovery process in Kariakoo. Traders and property owners with coverage will likely file claims for property damage and business interruption, but the low penetration of insurance among small-scale traders in Tanzania poses a significant barrier to recovery.
Drawing comparisons from the Mexico City earthquake, where insurance payouts exceeded 500 million US dollars, Kariakoo’s claims could realistically reach 10–15bn/-.
However, for those without coverage, the road to recovery will be much longer and harder, with many traders relying on personal savings or informal loans to rebuild their businesses.
In response to the incident, President Samia Suluhu has ordered inspections of all commercial buildings in Kariakoo to ensure structural safety and prevent future incidents whilst pledging government support for medical expenses and burials, and underscoring the urgency of ongoing rescue efforts.
According to a performance audit by Tanzania’s National Audit Office revealed that approximately 80 per cent of Dar es Salaam’s 500,000 houses are in unplanned areas or informal settlements lacking proper regulatory oversight.
This deficiency has led to substandard construction and increased structural failures, highlighting the urgent need to enforce building standards in rapidly urbanising regions.
Modernising building codes to reflect new technologies and climate risks, alongside public awareness campaigns, could reduce future vulnerabilities.
Offering tax incentives or subsidies to developers who adhere to safety standards could also foster a culture of compliance within the construction industry.
For Tanzania, the Kariakoo collapse is more than a tragedy; it is a wake-up call.
The financial losses, conservatively estimated at over 20bn/- when combining direct and indirect impacts, reveal the high cost of inaction thus underscoring the urgency to rebuild stronger and safer, as the cost of inaction is far too high.
This is a stark reminder for government bodies, private investors, and citizens alike to prioritise safety and accountability in urban development.
