Nigeria: Illicit Tobacco Products Flood Nigerian Market

Source from:  This Day 12/11/2015

The much-heralded Tobacco Control Act (TCA), which took many years of legislative work to pass and was recently signed into law is already being violated, as cigarettes being brought in by so-called distributors flood the Nigeria market with no ready factories to add any value, apart from increasing the number of smoking-related deaths in the country, THISDAY investigations have revealed.

This is coming against the backdrop of the recent entry of Phillip Morris International into the Nigerian market, which the Environmental Rights Action/Friends of the Earth (ERA/FoEN), an NGO, described as a clear violation of the law.

Also, the speed with which the company's entry was done, was denounced as suspicious by the NGO. "It may indicate some government officials may have been compromised to ensure that only the Phillip Morris subsidiary is quickly registered, but also to undermine the Tobacco Control Act through illicit imports," said the Deputy Director of ERA/FoEN, Akinbode Oluwafemi.

Under the TCA, stringent conditions have been outlined for operators in the tobacco industry, whether as producers or distributors. This is with the clear objective of eliminating sharp practices in the market and also curtailing youth access to cigarettes. Operators are also required to obtain licences from statutory bodies. But THISDAY findings revealed that some distributors, in taking advantage of the delay in constituting the federal cabinet, have commenced trading. Competent sources in the industry told THISDAY that the recent gains made by Nigeria in stemming the illicit trade in tobacco products could be lost as a result of the activities of the unlicensed distributors. Nigeria is reportedly losing an estimated N40 billion annually to illicit trade, which constitutes about 20 per cent of tobacco products in the country.

"Stricter regulations and policing, in addition to greater collaboration between industry stakeholders, have helped to reduce the quantum of illicit products in the Nigerian market. All these gains could be lost due to the flagrant disregard of the TCA," Oluwafemi added.

The framers of the Tobacco Control Act had put in stringent conditions in the legislation to protect the citizenry. This is intended to curb sharp practices such as the distribution of sub-standard tobacco products, flavoured cigarettes, which remain banned from the Nigerian market, and illicit trade, among several others. Oluwafemi added: "These distributors, with factories outside Nigeria, will not adhere to the dictates of the law, neither do they pay taxes or import duties. They also do not contribute to economic development. Rather, their activities lead to the depletion of scarce foreign exchange." Calling on the Ministry of Health to be more proactive in regulating the distribution sub-segment of the tobacco industry, he urged the newly appointed Minister of Health, Prof. Folorunsho Adewole, to review the recently awarded licences to ensure that they were issued in line with the TCA. "Nigeria has historically experienced the adverse impact of illicit trade, which the TCA is aimed at addressing. Only a legitimate tobacco industry can be regulated and also contribute to government revenue. When activities of the legitimate operators are constricted by distributors who are not obeying the law, much of that control and income is lost to illicit trade," he warned. In focusing this year's World No Tobacco Day on stopping illicit trade, the World Health Organisation (WHO) stated that one out of every 10 cigarettes sold globally is from the black market. In Europe alone, illicit trade costs governments in the region more than N2.1 trillion (10 billion Euros) in lost taxes annually. Experts believe illicit trade in tobacco products is a steeper challenge in developing countries like Nigeria with porous borders. The global health body declared that illicit trade in tobacco product, "is a means of amassing great wealth for criminal groups to finance other organised crime activities, including drugs, human and arms trafficking, as well as terrorism". "Surely, our legislators have not put in all that work to let it all go to waste. Let us see our taxpayers' money at work and enforce the law," Oluwafemi stated. Enditem