Nigeria Loses Billions through Illegal Smuggling of Tobacco Products

Source from:  This Day Live  08/11/2014

Despite official attempts to regulate the tobacco industry in Nigeria, illegal smuggling of products still persist, with the country losing billions of naira in the process, THISDAY investigation has uncovered.

According to findings, some Korean cigarettes are being imported into the country through containers brought through the Seme border into some warehouses located in Apapa area of Lagos State.

The smuggled cigarette products, manufactured by the Korean Tobacco Group (KT &G) include different brands of Pine, Compact Black and Esse; and are brought into Nigeria by some Nigerian Lebanese, who are believed to have their companies' head offices in Kano, although their warehouses are located in Lagos.

THISDAY gathered that the products are brought into Cotonou ports in Benin Republic and transported into Lagos through Seme in connivance with some officials at the border without paying the required duties.

It was also learnt that the alleged Kano-based companies, namely Street Distribution Nigeria and Black Horse Tobacco Ltd, have reported imported 23 containers of the cigarette products between December 2013 and now. Each container carries between 600 and 1,400 cartons of the various cigarette products.

The street value of the smuggled products, THISDAY learnt, run into billions of naira and duty payment on the items running into billions is also evaded by the parties involved.

When THISDAY visited the purported addresses of the companies in Kano, specifically at 52, Fagge Takudu Katin Kwori, and 28, Sharada Industrial Estate Phase 1, there was no sign of such offices or companies and no signboards, while the numbers could not be traced despite painstaking enquiries and visits.

Also, upon a visit by THISDAY to the Burma Road, Apapa location of the warehouses, the premises were deemed off-limits to passersby, with stern-looking security-men guarding the locked gates and THISDAY was denied entry into the premises.
A text message sent to the Customs PRO at Seme Border post on the alleged smuggling activities through the busy international route went unanswered up till the time the report was filed.

The findings further highlight the corruption and rot in the system, where Nigeria loses billions of naira in revenue through underhand deals by unscrupulous elements, even as the country feebly tries to regulate the booming tobacco industry.

A 2005 study by the World Health Organisation (WHO) estimated that more than 30 per cent of cigarettes smoked in Nigeria are smuggled. A more recent (2012) publication by the World Custom Journal claimed the volume have dropped to less than 10 per cent.
The porosity of the Nigerian entry port to excessive duty free cigarettes contravenes Article 6.2 of the WHO Framework Convention on Tobacco Control (FCTC), which encourages parties to prohibit or restrict, as appropriate, sales to and/or importation by international travellers of tax- and duty-free tobacco products. Nigeria is a party to the FCTC.

Presently, the House of Representatives of the National Assembly is deliberating on the Tobacco Smoking Control Bill. The bill is for an act to enact the tobacco smoking control bill to among other things provide for the regulation of the production, importation, advertising, promoting, sponsorship, distribution, sale and designation of areas where tobacco products may and may not be smoked and for matters connected therewith 2013 (HB 455).

Some stakeholders are worried that the bill was aimed at banning the sale of tobacco outright in Nigeria, which would force legal manufacturers /suppliers out of business and existence and on the other hand open more doors to smuggling and illegal trades.
However, Chairman of the House of Committee on Health, Mr. Ndudi Elumelu, argued that the tobacco smoking control bill was neither aimed at banning tobacco smoking nor at placing a total ban to tobacco manufacturers or retailers.

He said the bill was seeking the regulation of the production, importation, distribution, promotion, advertising, sale and sponsorship and designation of areas where tobacco may and may not be smoked in the society; thereby ensuring that the rights of non-smokers are also protected. Enditem