Regulatory Effectiveness: How Nigeria and other African Countries can learn from the EU on Tobacco Regulation
An IMANInsight
Review
The fight
against tobacco consumption which commenced decades in some jurisdictions and
became a global phenomenon, is taking a different dimension and approach.
Unfortunately, over the years in Africa, we have become a symbolic laggard.
However, we can take centre stage and lead the policy reforms that will show
that we have indeed learnt from the mistakes and experiences of the advanced
countries and continents who decades ago “cracked the whip” harder on tobacco
usage and in the process created more harm than perceptive good.
The main schools
of thoughts on the control and regulation of tobacco have been polarised along
the lines of “pro” and “anti” tobacco lobbyists. Suffice to say that both
schools of thought have successfully identified sufficient scientific evidence
to support their claims making it difficult for the policy maker to sift
through critical details concerning regulation. The challenge of the policy
maker is not the scientific evidence available, but the cause and effect of
“cracking the whip” and whether it is the most appropriate mechanism of dealing
with tobacco.
The European
Union, and States such as California in the US were among some of the first
jurisdictions to have instituted strict measures to control the display of
tobacco products, institute advertising bans, and introduce high taxes on the
industry among others as measures to protect their societies from the
“devastating” effects of the use of the product. After decades of such
draconian mechanisms globally, the evidence to support the effectiveness of
these measures, appear not to be completely supportive of them. In fact in
jurisdictions where there has been marginal improvements in the consumption of
the product, these could not completely be attributed to the strict impositions.
The mixed nature of the evidence with majority tilting towards the spurring of
illicit drug trade, crippling the industry calls for a further interrogation of
the evidence across major jurisdictions and how Africa can learn from
them.
In New York for
instance, an average of $12 tax per pack on cigarettes has sparked and grown
the illicit trade far beyond measure, meaning the state government is losing
out on the projected tax revenue estimated at about $80 Billion, without
preventing the consumption. Throwing into the mix the links between smugglers
and terrorist groups such as Hezbollah, Al-Qaida and Hamas, makes the cycle of
loss to the state an unending one as besides the loss in revenue, expenditure
on security provision will increase and crime rates will be on the ascendency.
Thus tighter regulations with the pious objective of saving the youth,
practically drive illicit trade, where the smugglers don’t check ID’s for
minors, thus making them an alternative supply source for the youth. The concomitant
effects are just grave.
Garry Grant,
retired Toronto police officer and spokesperson for National Coalition against
Contraband Tobacco, laments “its [illegal tobacco] also sold through a criminal
distribution network that connects cigarettes to kids without the hassles of
checking for ID or travelling out of the way. This dangerous combination of low
price and easy accessibility has made illegal cigarettes a prime source for
youth smoking.” In a case where proceeds from the sale of illegal tobacco funds
over 175 gangs in Ontario, Canada, means strict measures of control could not
be the way out. What if it was legalised and regulated? Will the outcome be
different?
Ireland has had
its fair share of negative effects of tight regulation and control despite
being one of the countries in Europe to pursue them. The Irish Times reports
that close to 29 percent of all tobacco products in the country are illegal,
and costs the country about €250 Million per year. Despite the evidence staring
the regulators in the face, the country still focuses on increasing resources
to the authorities to go after smugglers. Why spend so much as a country on
something that has not been eliminated under the strict supervision of wardens
in prisons and penitentiaries? Perhaps the evidence is signalling that
alternative measures should be resorted to.
The
challenge is not for just the developed countries. In Pakistan, it is alleged
that one out of four cigarettes sold is either smuggled or counterfeit, and
this is as a result of strict and rigid control mechanisms instituted
purportedly to save consumers of tobacco and its related products. With a tax
rate per packet of cigarette hovering around 70 to 80 percent, it does not
follow that the government will lose close to $1 Billion by 2017, unless of
course the unintended consequences are as real as can be. The consistent
increase in tax on the industry of the 5-year period from 2007 to 2011 of about
60 percent seldom translated into decline in consumption which remained
constant over the period1both industry and government, limiting their revenue
accruing from the industry as a result of draconian regulations.
The European
Union Parliament recently relaxed some proposed tighter regulatory directives
spearheaded by governments in the region. The move according to some analysts
is victory for pro tobacco lobbyists. Here is the thing; both pro tobacco
lobbyists and anti-tobacco crusaders want the same thing-decrease the negative
effects of tobacco, however they propose different approaches. The “war” on the
negative externalities will not be won when we perceive changes in regulations
as victory for one group and the defeat of the other. At best, one approach;
draconian methods, has done little over the past decades in dealing with the
problem, than to cost governments and industry money, and scarce resources,
with the UK government loosing close to £2 Billion. This leaves one no choice
than to question the extent to which the World Health Organization’s framework
convention on tobacco control has helped the situation. Countries that have
ratified the convention such as those mentioned above, have not seen the
perceived benefits thought to have been realised. For instance, Article 6 of
the convention proposes price and tax measures to reduce the demand for
tobacco. The evidence from across Europe shows that, demand and consumption has
been on the ascendency only through illegal/black markets, where the dangers
thought to be prevented are more onerous. The proposition by other groups has
never been considered and even the industry has not been fully engaged in this
debate, despite the fact that it still remains a legitimate industry across the
globe.
It is said that
winning strategies are never changed but improved, whiles failing ones are
changed. It only means another approach to solving this problem be resorted to,
and it is quite progressive that the EU is beginning to engage the industry to
identify ways by which the menace could be dealt with and to some extent shy
away from draconian principles, which have made the region lose resources; a
bad experience. This could only mean one thing for African countries, who have
less resources to throw away to smugglers, peddlers, illicit traders, and most
of all to fight the nuances of draconian policies; review current
systems/policies for fighting tobacco, maybe rethink strict and tight
regulations including high taxes, and engage the industry more in resolving
this challenge.
What Nigeria and
other African Countries can learn from the position of EU?
It is obvious
that with all the propositions and conventions present today, the “whip” has
not been an effective tool in dealing globally with tobacco. The fundamental
fact that the main actors; industry and consumers, have not been directly
engaged in the debate has been a fundamental flaw to virtually all approaches
that have been used. From 2003 for instance when the World Health Organization
passed the convention for tobacco regulations, and called for more stricter
mechanisms through price and tax controls, non-price and tax controls, public
education about the risk of consumption, advertising and display bans, training
of public officials to deal with the issue effectively, the world has little to
show for such draconian measures.
At best, high
cost of dealing with externalities of the implementation of these policies,
loss of revenue to both governments and industry, increase in drug and tobacco
related crimes and increase in tobacco consumption is what these countries have
to show. This is why the debate is changing globally, and the fear is that,
Africa which has always been a laggard on some of these issues might miss out
on an opportunity to shorten its learning curve. It has taken the developed
countries decades to have this experience, but Nigeria and other
African
countries have a case study (experience) to learn from. Nigeria does not have
the resources to splash around for the next 60 years before it realises this is
not the way to go. Even if we had the resources, we do not need to waste them,
and most importantly put more lives in danger by helping the illegal market to
flourish. With drug cartels increasing their tentacles into frontier markets to
solidify their trade and network, it will be imprudent not to review current
systems, and engage industry and consumers to find appropriate mechanisms such
as co-regulation, to protect the youth and prevent the sale of tobacco products
to minors.
The evidence and
experience of other countries and regions that pursued draconian policies
against tobacco stares us in the face, we must look at and learn from these
experiences, and not succumb to external pressures in this country and on the
continent, to seize the opportunity to make history, than to be writing it 60
years from today.
IMANInsight is a
platform for researching and advocating common sense public policy. It is part
of IMANI Ghana.
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