Malawi is losing about $30 million (about K12.6 billion) annually through illicit tobacco trading, the Tobacco Control Commission (TCC) has said.
The commission has since expressed fears that the figure could be higher if such a loss takes into account the sale of illicit cigarette products.
The illicit tobacco trading involves the production, import, export, purchase, sale or possession of tobacco goods which fail to comply with legislation.
The estimated $30 million loss represents eight percent of total tobacco earnings this year pegged at $362 million.
TCC chief executive officer Bruce Munthali said in an interview yesterday the commission made a statement on how illicit tobacco trade is hurting the tobacco industry and the economy in general at the Anti-illict Conference on Tobacco Products held in Cape Town, South Africa last week.
The conferecne discussed the size of the illicit economy and measures to curb such a malpractice among tobacco growing countries such as Malawi, according to Munthali.
He said the meeting drew together African countries, Interpol and international tobacco buying countries and was organised by the Tobacco Institute of Southern Africa (Tisa).
“We have agreed to engage frequently and to strengthen the collaboration and approach to curb illicit trade and fraudulent activities in the tobacco industry since tobacco is a formal business,” said Munthali.
Munthali said TCC understands that the continued illicit tobacco trading is simply diverting taxes and the much-needed revenue from government coffers, adding that the malpractice has several multiplier effects across the global tobacco industry including drug curtails.
He said Malawi on its part assured the meeting that it seeks to intensify the tracking system on tobacco trading with the rest of the world as a way of reducing tax losses on account of illicit tobacco trade.
Tobacco continues to anchor the country’s economy despite continued global threats such as the anti-smoking lobby and the World Health Organisation’s Framework Convention on Tobacco Control (WHO-FCTC) guidelines which seek to abolish tobacco farming.
The crop is contributing about 60 percent of Malawi’s total export earnings, unleashing 25 percent of total tax base, directly employing 12 percent of Malawi population and also contributing 13 percent of Malawi Gross Domestic Product (GDP).
