Tobacco smuggling worries TCC
The Tobacco Control Commission (TCC) has raised an alarm over massive smuggling of the leaf across the borders, saying the malpractice has the potential to affect revenue the country is likely to realise from its number one foreign exchange earner.
Tobacco contributes about 60 percent to the country’s foreign currency revenue, 13 percent to the national economy and supports millions of Malawians.
This is happening against the background that the country’s output of the leaf has dipped 36 percent to 151 million kilogrammes from 237 million kilogrammes last year and with the continued smuggling, it means less leaf is likely to go through the country’s four auction floors.
This could also potentially have effect on earnings which also dropped by 30 percent to $293 million from $416 million the previous year.
TCC public relations officer Juliana Chidumu said on Wednesday that the tobacco regulatory body has engaged the police and other concerned players to ensure that illegal cross-border trade is curbed.
Chidumu said some traders are enticing desperate tobacco farmers to buy their leaf which they smuggle out of the country.
“We have discovered a number of points of exit which these traders are using to smuggle the tobacco. This malpractice has a big impact on the country’s economy. It is robbing people of their livelihood and could also greatly affect the revenue Malawi realises from tobacco,” she said.
“Most of the growers are poverty-stricken and desperately looking for quick money, hence; selling their leaf to traders,” she claimed.
This week, a joint operation between the TCC and police intercepted 33 bales at Chatoloma in Kasungu that were ready to be smuggled out.
Chidumu has called on all concerned players in the industry to be vigilant because the selling of Malawi’s tobacco is the same as exporting jobs.
On the ongoing sales, she said they are progressing well and that prices have improved as compared to last year.
The average price this year is hovering at $1.15 per kilogrammes up from last year’s 76 cents per kilogrammes, said the official, adding that the rejection rate is at between 25 and 30 percent, which is within the acceptable range.
Figures from TCC show that the first three weeks after opening the auction floors, Malawi has earned $3.1 million (K501 million) which is 17 percent shy of the $4 million (K668 million) the leaf generated the same period last year.
