How Ghana is Addressing Illegal Tobacco Trading

The Customs Division of the Ghana Revenue Authority (GRA) has outlined measures it is taking to address illicit trading in tobacco and tobacco related products in the country. A Senior Revenue Officer of the Division, Samuel Akrofi, named the measure as regular border patrols; joint cross-border Consultative Meetings; exchanging information through the ECOWAS Interconnected Transit Freight Management System (SIGMAT); forging close collaborations competent State Agencies; and summary rejection of all forms interference with the tobacco industry in government policy discussions; as well as the consideration of a National track and trace system to be linked to a regional track and trace system.

The measures also include recommendations for Civil Society Organizations (CSOs) and representatives of the private sector to collaborate with customs to curb illicit trade in tobacco; information and intelligence sharing; trend analysis and in-country demand reduction measures; and the institution of a peer-review mechanism for specific areas of implementation among African States.

Akrofi mentioned these measures in his presentation during the 2^nd Tobacco Inter-Agency Meeting on the Protocol to Eliminate Illicit Trade in Tobacco held in Accra on August 31, 2021.

He revealed that the Tobacco Industry, also known as ‘Big Tobacco’ has been involved in the smuggling of cigarettes for decades, and continue to do so to-date and that the it is important for stakeholders including the private sector partner and support relevant state institutions to fight the menace.

“Available documents suggest that smuggling has been an important component of BAT’s market entry strategy in order to gain leverage in negotiating with governments for tax concessions, compete with other transnational tobacco companies, circumvent local import restrictions and unstable political and economic conditions, and gain a market presence,” he revealed.

Giving an overview of the illicit trade in tobacco products in the country, the Industrial Promotion Officer at the Ministry of Trade and Industry, Daniel Sowah, the products are smuggled into the country through several means, including vehicles, luggage, postal services, boats, cargo trains, donkeys and shipping containers, among others.

He said the law enforcement agencies must be vigilant to monitor traditional vulnerabilities and methods as well as up their games in detecting new trends in smuggling.

“The World Customs Organization (WCO) has noted that smugglers have used modi1ed cars, trucks and train cars to move cigarettes across borders”.

He mentioned some of the drivers and factors of illicit trade in tobacco products as the purchasing price, proximity to borders, internet penetration, taxation levels, smoking prevalence rates, sales per capita, unemployment rates, corruption, prosecution rates, presence of organised crime networks, perceived legitimacy of the tax, rule of law/good governance indexes, GDP per capita or estimated disposable income, the legitimacy of the taxation, as viewed by the consumer and society.

“Corruption is often discussed as a facilitator for various forms of illicit trade, including the illicit trade in tobacco products,” he noted.

In his view and the view of the Ministry of Trade, an effective means to control the diversion of tobacco products into illegal channels is to track and trace the product from the manufacturer to end retailer. Also, nnother effective means to curb the diversion of genuine cigarettes from the legitimate supply chain is the establishment of know-your-customer policies and practices along the supply chain

On the efforts being taken by his outfit to reduce illegal trade in tobacco, Sowah said they committed resources to reduce demand with public awareness campaigns.

“Increasing taxes on tobacco products is widely regarded as a highly effective strategy for reducing the trade and use of Illicit Tobacco. In 2015, the excise duty rate of tobacco products was increased from 150% to 175% of which excise tax represents about 28% of the price.

“The excise tax is levied as an ad valorem rate of 175% of the CIF value. The excise tax as a percentage of the retail price is well below the average tax burden of middle-income countries and WHO’s recommendation of an excise tax burden of 75% of the retail price. The fundamental problem in the tax structure for Ghana is that the base on which the excise tax is levied is small and subject to manipulation by the tobacco industry

He support the call for the government to involve the private sector and other affected stakeholders in the efforts, so as to benefit from their expertise and capabilities in addition to what the relevant agencies are doing.

“Strong political will to tackle illicit trade is also an essential component in any comprehensive approach. He called for the speedy ratification of the Protocol to eliminate illicit trade in tobacco to prevent the diversion of tobacco products from the licit tobacco supply chain and increase penalties for and enforcement against illicit trade

The 2^nd Tobacco Control Inter-Agency Meeting on the Protocol to Eliminate Illicit Tobacco Trade was jointly organized by the Vision for Alternative Development (VALD) and the Food and Drugs Authority (FDA). The objective is to develop a comprehensive roadmap for implementing the protocol by leveraging on the diverse expertise of all stakeholders.

The Protocol is a critical approach to the growing trade in illicit tobacco products, often across borders. This Illicit trade poses a serious threat to public health because it mostly increases access to cheaper tobacco products, while undermining national tobacco control policies.

The objective of the Protocol is to eliminate all forms of illicit trade in tobacco products, in accordance with the terms of Article 15 of the World Health Organization, Framework Convention on Tobacco Control (WHO FCTC). More specifically, to secure the supply chain of tobacco products, through licensing, due diligence, record keeping, and the establishment of a global tracking and tracing regime that will allow governments to effectively follow up tobacco products from the point of production to the first point of sale.

Ghana, like a number of African countries has ratified the protocol for the elimination of illicit trade in tobacco products and the Ministry of Health as the lead Ministry for the Protocol has been involved in a number of consultations with the relevant institutions responsible for the finalization of ratification process and its subsequent deposit with the United Nations.

There have been discussions on the ratification process and highlights on the further steps to domesticate the protocol.

Head of Substances of Abuse at the FDA, Olivia Boateng, who is also the Focal Person on Tobacco Control noted that Ghana has made significant strides in tobacco control through the various smoke free policies such as the Part Six of the Public Health Act 2012, (ACT 851); Tobacco Control Regulations, 2016 (LI. 2247); and World Health Organization Framework Convention on Tobacco Control (WHO FCTC).

“However, much effort is continually required in counteracting the infiltration of illicit tobacco in Ghana and success can only be attained with the concerted efforts of the developmental partners, CSOs and stakeholders,” she stated.

In his remarks, the Programmes Director for VALD, Labram Musah, noted that Ghana played a critical role in the negotiation stages of the FCTC to and was among the first 40 countries to sign the FCTC to become a global treaty and progressively domesticated the document.

He urged the Ministry of Health (MoH) and the FDA to resuscitate the Tobacco Control Inter-Agency Coordinating Committee (TCIACC) to help reduce the impact of tobacco in Ghana in a coordinated manner from all aspects.

“The intention for the setting up of the TCIACC was a good one but for years no meeting has been held,” he stated.

By Jeorge Wilson Kingson