There is a booming business of tobacco in Africa’s biggest economy as new data shows Nigeria exported cigarettes containing tobacco worth N23.8 billion in the first half of 2022.
This represents a 37.5percent increase compared to N17.3 billion recorded in the corresponding period of 2021, data gleaned from the National Bureau of Statistics (NBS) showed.
A breakdown of NBS’s data showed Nigeria exported cigarettes containing tobacco worth N13 billion in the second quarter of 2022, a 20.3 percent increase compared to N10.8 billion recorded in the first quarter of 2022.
“Nigeria’s Tobacco companies are embarking on corporate social responsibility (CSR) activities, deploying different strategies to gain the affection of policymakers, making partnerships and collaboration with state institutions and organisations that ultimately help them build good public ratings,” a report by a non-governmental organization, Corporate Accountability and Public Participation Africa (CAPPA) revealed.
A report by the World Health Organisation (WHO) believes tobacco tax policies create win-wins for development, health and revenues in most developing countries.
“By implementing proven policies like tobacco taxes, the costs created by the tobacco industry to local communities and nation can be avoidable. It is a win for population health, revenue and for development,” WHO said
Another report by NewYork-based PR Newswire showed the global tobacco market is envisioned to generate a revenue of $901 million and grow at a compound annual growth rate (CAGR) of 2.5percent over the estimated time from 2021 to 2028.
Last June, The Federal Government increased the tax on cigarettes by 30 per cent as part of its control measures against public health.
“The Federal Government of Nigeria, with effect from 1st June 2022, commenced implementation of a new three-year tobacco tax regime which will end in 2024. This new regime increased the Ad-Valorem tax rate from 20 per cent to 30 per cent,” Nigeria’s Minister of State for Health, Olorunnimbe Mamora said in a briefing.
“In addition to the 30percent ad-valorem, a specific excise rate has been increased from N58 to N84 per pack of 20 sticks of cigarette, and this will further be increased to N94 per pack in 2023; and then N104 per pack in 2024,” Mamora said.
According to Mamora, the development is in compliance with the National Tobacco Act (2015) and Regulations (2019).
Experts say the development allows government to commence screening and issuing operational licences to qualified tobacco businesses in the country with a view to profiling and monitoring the industry activities nationwide.
BusinessDay’s findings showed the new licensing guideline requires strict adherence to ensuring that a unit package of tobacco products has the approved texts and graphic warning messages that will make users aware of the harmful effects of tobacco use.
Despite government control, experts say Nigeria’s tobacco industry is aggressively engaging with stakeholders needed to ensure increased production, consumption and revenue generation.
Last December, British American Tobacco (BAT) Nigeria launched a N200 million Farmers Fund. The fund is for the re-integration and engagement of over 300 ex-tobacco farmers in the production of food crops such as cassava and maize.
The fund, instituted in partnership with the International Institute of Tropical Agriculture, IITA was informed by BAT’s resolve to mitigate the impact of the company’s operations on farmers whose livelihoods were affected by the decision of the company to discontinue tobacco cultivation in Oyo State.
Launching the fund, Oyo State governor, Seyi Makinde who was represented by Segun Ogunwuyi, his chief of staff, described the move by BAT that has a $185 million factory investment in the state as a step in the right direction.
The factory began operations on June 17, 2003, and has attained the capacity to produce about 100 million sticks of cigarettes per day for export to 14 countries.