Raising excise taxes on cigarettes is the most effective measure to reduce smoking, writes Prof Corne Van Walbeek, director of the Research Unit on the Economics of Excisable Products at the University of Cape Town. However, excise tax systems in some African countries — like South Africa and Kenya — have actually regressed.
Van Walbeek writes:
The rapid growth in tobacco use in Africa is a potential public health catastrophe. Rapid population growth, increased advertising by the tobacco industry, and growing tobacco consumption among the youth on the continent all contribute to a projected massive tobacco-related burden of disease. The World Health Organization (WHO) estimates that one in five African adolescents use tobacco. Furthermore, tobacco-related deaths are expected to double in low- and middle-income countries between 2002 and 2030.
There are many efforts being made to prevent these unnecessary deaths. One is the establishment of the Africa Conference on Tobacco Control and Development, which will be held every four years. The first (virtual) conference took place this week (26-28 October 2021), the aim being to connect researchers, policymakers, advocates, students and members of the public interested in tobacco control on the continent. The theme was “Tobacco Free Africa: An Urgent Call for Joint Action”. The event disseminated information on some of the tobacco control work conducted in Africa.
This article explores the current landscape of tobacco control in Africa.
Many African countries have indicated interest in adopting tobacco control policies. Of the 54 on the continent, 51 have ratified the WHO Framework Convention on Tobacco Control (WHO FCTC): (Malawi, South Sudan, and Eritrea have not). By ratifying the WHO FCTC, countries commit to adopting effective and evidence-based measures to curb tobacco consumption.
One of the key interventions is to ban smoking in public spaces. Recent estimates by the WHO suggest that, globally, between 1 million and 1.2 million deaths annually are related to exposure to second-hand smoke. Thirteen African countries have implemented comprehensive smoke-free bans, joining more than 50 other countries worldwide.
Sixteen African countries require cigarette manufacturers to print graphic health warnings on cigarette packs. Studies have shown that pictures, such as of a diseased lung, or of a person dying from cancer, reduce the attractiveness of the pack and the appeal of smoking.
In 2018 the Protocol to Eliminate Illicit Trade in Tobacco Products came into force. Countries that ratify the Protocol commit themselves to adopting various measures, such as using track and trace systems to prevent and counter illicit trade. Currently, 27 African countries have ratified the Protocol, the highest proportion of any continent. A number of countries have already implemented some of the measures suggested in the Protocol.
The need to safeguard the gains
Despite the progress made in many countries, many challenges remain. One significant challenge has been the slow adoption of recommended tobacco tax policies. Raising excise taxes is the most effective measure to reduce smoking. The structure of the excise tax is important. In general, a specific tax (an amount of tax per cigarette, irrespective of value) is better than an ad valorem tax (which is levied as a percentage of value). Simpler tax systems are better than complex ones.
The majority of African countries have excise tax systems that are generally regarded as sub-optimal. It is thus unsurprising that cigarettes are relatively cheap in most African countries. In fact, the excise tax, expressed as a percentage of the average retail price, is lower here than on any other continent in the world.
The excise tax systems in some countries have actually regressed. A classic example is Kenya. In the 1990s and early 2000s, Kenya had one of the most complex tax systems in Africa. This complexity allowed the tobacco industry to profit at the expense of the fiscus and of public health. Targeted campaigns by tobacco-control advocates culminated in the implementation of the WHO-recommended uniform specific excise tax in 2015. This achievement, however, was short-lived. In 2019, under pressure from the tobacco industry, the Kenyan government reintroduced a two-tier system The two-tier system allows tobacco companies to differentiate their products just enough to maximise profits on high-end brands, while keeping low-end brands cheap enough that large numbers of people continue smoking.
South Africa’s tax system has also regressed. Between 1994 and 2009, South Africa’s tobacco control efforts, anchored by sharp increases in the excise tax, were praised globally. Strong administrative controls by the South African Revenue Service prevented illicit trade from increasing. Since 2010, there has been a rapid increase in illicit trade, despite the fact that excise tax increases in the past decade have been negligible. Since 2015, illicit trade in South Africa has increased substantially, and now accounts for at least 35% of the total market. The primary reason for this increase is the decline in the South African Revenue Service’s capacity to ensure tax compliance among tobacco manufacturers. It is now clear that the tobacco industry has been at the forefront of undermining the revenue authority. Efforts to implement a track and trace system have been unsuccessful.
The ethical practices of the tobacco industry have been called into question for decades. Recently, the BBC’s programme Panorama, presented a documentary on the industry. The documentary was the culmination of years of research conducted by investigative journalists and researchers at the University of Bath. It details how British American Tobacco (BAT) acted unethically in various African countries to maintain its high profits, to block or weaken tobacco control legislation, and to maintain its market dominance. This is not the first time BAT has been accused of these practices and, sadly, it is unlikely to be the last.
While many challenges remain for tobacco control in Africa, the establishment of platforms such as the Africa Conference on Tobacco Control and Development is an opportunity to reflect on what has been done well so far, what lessons can be learnt, and where gains must be protected. The conference has been organised by the Centre for Tobacco Control in Africa and its partners, with free and open registration to the public.
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