Tobacco regulation: When good intentions are not enough

The Federal Executive Council recently proposed a new bill on tobacco regulation in Nigeria. In term of laws alone, there are up to four bills at various stages of passage in the National Assembly, and several other bye-laws. Given the recent passage and signing of tobacco law by Lagos State government, there is the possibility of replication of same by various state governments since health is on the concurrent list of the constitution.

Without doubt, the tobacco sector is highly regulated. A number of agencies currently regulate the industry practices, placing designated bans on smoking places and banning advertisement in specific places. There are also distributional and dispensing restrictions, like not selling to a given set of people. NGOs and professional organisations are also not in short supply, airing their views against the manufacturers. 

Though there is paucity of data on how these laws have impacted the sector, associated industries as well as public costs, the numerous laws and bills present a muddled-up picture of the drive to regulate the sector. One thing is clear, however, that multiple laws and enforcements translate to over-regulation, which usually leads to inefficient outcomes and unintended consequences. 

In a way, the multiple regulatory actions in the sector suggest an ultimate intention to frustrate legal tobacco production and consumption in Nigeria. The thinking seems to be that more laws are necessary to appeal to an emotional base of a growing mammoth. Unfortunately, these multiple processes are a waste of legislative resources. To start with, most of the present bills being proposed are drafted as if the sub-sector is in a vacuum in terms of regulatory and tax interventions. 

Since around the late 1990s, all forms of tobacco advertisements and promotions have been banned. Before then, cigarette products advertisements had a public education component as they necessarily ended with the warning on possible health implications of the product in accordance with the Federal Ministry of Health directives. So, are the new bills not merely reinventing the wheel? The sector is not in a regulatory vacuum as there are existing laws being conformed with by the industry players. Or are the new bills based on any new discovery? 

Globally, the tobacco industry is a legal industry. Just like other social products – alcohol, gaming and patent medicines – over-regulation can harm the economy, the industry and the society as a whole. The lessons from the United States are instructive. Alcohol was prohibited in the United States in 1920. It was later discovered that rather than the prohibition leading to sustained reduction in consumption, illicit production and distribution expanded despite increasing resources devoted to enforcement. Due to the ban, alcohol became more dangerous to consume. Crime subsequently increased and became more organised, the court and prison systems were stretched and corruption became rampant. 

In the case of Nigeria, let’s say the innumerable laws are based on an intention to do good. But are good intentions always enough in framing public policy? Often, the outcome is counterproductive. On the industry side, multiplicity of regulations will distort the market. One negative effect of this comes from the multiplicity of regulators and layers of enforcers and legal responsibilities for the manufacturers. Apart from this raising enforcement and compliance costs both for government and the industry, it will create unnecessary complexities for the public in terms of monitoring and compliance. 

Nigeria needs not add to opportunity for corruption and bribery which comes from over-regulation. It is well known that too much government involvement in any sector generally leads to black market. Black markets are not ideal and definitely extra-legal, but it is market reaction to a given climate surrounding an industry as determined by government. 

The idea behind tobacco regulation is based on the notion that people do not know what is best for them; whatever will further create illicit trade around the sector is contrary and should be avoided. Without this, the sector will become more problematic, particularly on the public side. This is a lesson already well imbibed in many developed economies.

With the hordes of bills and laws, there seems to be an attempt to stamp out legal manufacturing and distribution of tobacco. How this multiplicity of laws and campaigns promotes public cause is not obvious. It needs to be understood that the tobacco industry is important in the search for solutions to the sector’s challenges. Already, changes within the industry are forcing research and development efforts in newer and better products. E-cigarette is now being marketed globally with fewer regulations because the main issues surrounding nicotine, tar and environmental/secondary smokers are reduced or eliminated in the content of e-cigarette. There may not even be any secondary smoker because e-cigarette produces no smokes like the conventional cigarette. A recent research review published in The Economist reported some findings on e-cigarette, including evidence it helps smokers that may want to quit.

Like alcohol, gaming and similar products, tobacco is governed by hard and irrefutable economics that over-regulation or prohibition of a mutually-beneficial exchange will eventually fail. One hopes the legislators and policymakers will not travel that way.

Olusegun Sotola