Kenya’s tobacco control efforts are slowing down because tobacco companies do not want controls.
This is not a new phenomenon. The tobacco industry the world over has thrived on corruption, blackmail, manipulation, deception all in the name of making a profit.
The industry has excelled in selling death to millions across the globe. There are about 8.8 million deaths globally every year attributed to the use of tobacco products.
Kenya has over and over again found itself beholden by the machinations of the industry that is adept at manipulating markets with its deep pockets. For instance, the tobacco industry has always found a way to market its products even when laws are stringent. Kenya’s youth are now in a frenzy, vaping their way to ill health. E-cigarettes for instance are now the rave and rage of the youth.
WHO data shows that more than 80 per cent of smokers live in low and middle-income countries.
WHO Data on Tobacco
Kenyans consume almost 8 billion cigarette sticks annually.
In 2014, the Global Tobacco Survey reported the prevalence of consumption for Kenyan males at 19.5 per cent compared to 4.5 per cent among females.
A substantial portion of the deaths and hospital admissions attributed to tobacco use also occur in this region.
For every shilling spent on tobacco products, research shows, the government spends at least four shillings on mitigating harmful tobacco effects.
WHO research has shown that higher taxes for tobacco products are among the most cost-effective measures to reduce cigarette smoking.
While WHO recommends a taxation rate of 75 per cent of prices charged for tobacco products, Kenya’s tax rate currently stands at just 58 per cent of the prices.
A study by the World Bank and the Pan African Health Organization (PAHO) has also shown that a 10 per cent price increase in the price of tobacco products leads to a 4 per cent decrease in consumption in low and middle-income countries.
International Institute of Legislative Affairs (IILA) is among a group of expert organizations working to ensure that Kenya fully implements the WHO and (Framework Convention for Tobacco Control (FTCTC) measures to protect the public from the harmful effects of tobacco smoking.
According to IILA program officer Phillip Musamia, the law does not allow the Cabinet Secretary of Treasury or the Ministry of Health to make it easier for the tobacco industry to sell products on the local market.
“Section 12 of the Tobacco Control Act of 2007 and the Tobacco Regulations of 2014 have made it compulsory for the CS not to give incentives to the tobacco industry to market its products,” said Mr Musamia in Nairobi.
He also refers to the 2016 Miscellaneous Fees and Levies Act (MFLA) that provides for the exemption of certain imported goods from the Import Declaration Fees (IDF) and Railway Development Levy (RDF).
“The Finance Act amends the second schedule of the MFLA by exempting goods from the IDF and RDF. This is to apply where the cabinet secretary determines that the goods are for public interest or that they promote investment of more than 5 billion,” Mr Musamia says.
Initially, imported goods were subject to 3.5 percent IDF and 2 per cent RDL irrespective of where they were imported from. Under the amendment, the CS is allowed to decide whether to exempt certain consignments from the levies and other fees or not.
IILA is however concerned that the tobacco industry’s large investments in manufacturing could sway the state to exempt them from the taxes and roll back the gains made in tobacco consumption control. Auctioning public health at the altar of economic gain has been a bait that government find irrestitable. Even when the subsequent cost is glaringly high.
BAT Kenya has completed the construction of a nicotine pouch factory in Nairobi at the cost of Sh 2billion. The firm has also recently set aside Sh 1billion for the marketing of the products.
“For a company of BAT’s size, investing Sh 5 billion in the local manufacturing industry is not a big challenge. We are seeing the scale-up of its nicotine product manufacture and marketing as a threat, especially since it may eventually place the firm in the category of IDF and RDL tax exemptions,” the program officer in charge of policy development and legislative engagement said.
“While this is a great incentive for other industries and products, we do not advocate for the granting of this concession to the tobacco products it markets,” adds Mr Musamia.
The legislative engagement expert said the industry had previously managed to outsmart the health sector’s efforts to regulate tobacco use by sneaking nicotine pouches into the country via approval from the Pharmacy and Poisons Board (PPB).
“It is still a mystery how BAT managed to convince the PPB that the nicotine pouches were a medical product that could be used to help cigarette addicts quit smoking. The opposite is true because the pouches contain nicotine which is extremely addictive,” said Mr Musamia.
After considerable public outcry on the controversial nicotine pouch approvals, CS Mutahi Kagwe revoked them in October 2020, which brought them straight back into the taxable tobacco products category.
In February, the government issued a directive to the tobacco industry to register all nicotine products as tobacco products. To date, the industry is yet to comply with the directive.
IILA is involved in efforts to control tobacco by engaging with Parliament to increase tax on new tobacco products. The objective is to ensure that the country achieves the 75% tax on tobacco product prices recommended by the World Health Organization (WHO).
“Following comprehensive engagement with the parliamentary budget committee, we had strongly recommended the proposed tax of at least Sh5,000 per kilogram of the nicotine pouches. BAT Kenya made a counter proposal of just Sh750 for the same product,” Mr Musamia said.
He said the institute had hoped for the imposition of the Sh 5,000 tax that would have forced a price increase for the pouches and deterred consumers. Thanks to the parliamentary budget committee, this goal was not achieved.
“When the parliamentary budget committee came up with its final recommendations for the excise duty on nicotine pouches, we were shocked to find out that the tax had been slashed from Sh5,000 to just 1,200 per kilogram,” said the IILA official.
He terms the move by the committee “a big blow to tobacco control efforts in the country”.
“It is our view that the committee’s decision to radically slash the tax by 76 % amounts to granting a big incentive to the tobacco industry to market the new products to the public,” said the IILA program officer.