Creating tools and evidence to improve tobacco tax policy in West Africa

Tobacco use kills more than 8 million people a year (World Health Organization, 2019). Commercial tobacco product sales have historically been low in most African countries, but the situation is rapidly changing. A key challenge is to prevent these rates from increasing, and, if anything, to reduce them (Blecher, E. and Ross, H., 2013). Tax and price policies have been identified as the most cost-effective means of influencing the demand for tobacco products (World Health Organization, 2016).

The overall objective and intended impact of the project was a change in tobacco taxation policy resulting in additional tax revenue, improved public health and greater socioeconomic well-being in West Africa.

Taxing Tobacco in West Africa: creating a lasting effect in the region by fostering a climate of trust among stakeholders

Generate strong, context-specific economic evidence to accurately assess the current situation and the possibility of changes in taxation.

The solutions devised needed to be tangible and usable by policymakers. The project sought to develop a predictive method that would allow an assessment of the positive and unintended effects of implementing pro-health policies.

If all the Economic Community of West African States (ECOWAS) countries were to implement the ECOWAS Directive on tobacco taxation, sales volumes would decrease 22% on average and tax revenues would increase 373% on average.

Data was made public, and a simplified online tool was created to help understand the ins and outs of taxes for the different countries concerned.

Making data available and transparent helps build trust. When countries can share the same quality data and can speak the same language, the solutions developed will make sense and will be sustainable in the long term.

N.B.: Each country has its own peculiarities, and additional information about them is available in the appendix.

Develop tailored political and economic solutions based on evidence and create decision-making tools which can be disseminated to policymakers to facilitate the decision-making process.

Making information available is central to the logic of policy creation. Breaking complex information down into simple and digestible elements helps highlight key messages and ensures that the greatest number of people can understand the information. This also makes it easier to use the data to identify possible solutions to problems and the resulting implications for society.

Factsheets were created which outlined the country-specific tobacco use and tobacco control landscape, providing data on the cost of smoking, the affordability of cigarettes, the existing tax structure and recommendations on how to improve it.

All factsheets are available in English and French.

Produce tailored political and economic solutions based on evidence and create calibrated decision-making tools, which can be disseminated to policymakers to facilitate the decision-making process, in addition to creating strong and long-term partnerships with the ECOWAS Commission and other key stakeholders.

Several meetings and workshops were organized to create alignment on common objectives, allowing for connections between members of civil society, politicians and different international actors.

The team aimed for the harmonization of the tax directives and the adoption of a specific excise tax on tobacco products.

Specific excise taxes (those levied on the volume of the product) have been shown to be effective at increasing the retail price of tobacco and thus reducing tobacco use and harms. Currently, only a handful of the 15 ECOWAS countries impose a specific tax on tobacco. As a result, tobacco taxes and prices in the region are very low by international standards.

These meetings provided a key and rare opportunity for stakeholders to meet and engage on the topic of tobacco taxation. The workshop was shared extensively on social media sites and there was significant interest in having a follow-up meeting.

Team and partners list

Kirsten van der Zee and Hana Ross, with inputs from the CRES and ICTD teams.

Kirsten van der Zee is a Research Officer for the Research Unit on the Economics of Excisable Products, based at the University of Cape Town (UCT), South Africa. She holds a master’s degree in applied economics from UCT. She joined UCT’s Research Unit on the Economics of Excisable Products (REEP) in 2018, where she has worked on tobacco control economics, focusing on tobacco taxation and tax modelling, cigarette pricing and illicit trade. She has been involved in multiple primary data collection projects in Africa.

Hana Ross is currently Principal Research Officer (Professor Level) at REEP at UCT. She studies the economic impact of tobacco control interventions in Africa, Southeast Asia and the European Union. She also works on issues related to illicit trade in tobacco, including measuring the size of tax avoidance/evasion and strategies to control the illegal cigarette market. She received a PhD in economics from the University of Illinois at Chicago, USA.

Methodology and references

The research uses an Excel-based model which is made up of 15 separate country models, one for each of the 15 ECOWAS members. Each country model estimates market reaction, including changes in cigarette prices, quantity consumed, tax revenue and industry profit, based on tax changes required by the new directives. A key input assumption is the price elasticity of demand for cigarettes, which measures the extent to which a change in price will impact cigarette consumption. Each country's model includes the basic tax rates and structures, as well as the type of cigarette tax, including import duty and levies, excise and VAT taxes per pack. The model then calculates tax revenue for each type of revenue along with the total market value and the industry share which includes all costs, margins and profits. This net of tax component is equal to the retail sales price minus all taxes.

For our research purposes, we also used the Tobacco Excise Tax Simulation Model (TETSiM) developed by the Economics of Tobacco Control Project at UCT. While the original TETSiM provides tax and health outcomes for a given tax structure, the reworked TETSiM backend equations provide a tax structure and levels that maximize public health outcomes and government revenues.

Promoting key learnings

Celebrating the culmination of over a decade of partnerships, research and advocacy, a webinar was planned in partnership with Cancer Research UK, “Demystifying the Economics of Tobacco Control: Knowledge, policy and everything in between,” and broadcast live on June 29, 2022.

This webinar represented an opportunity to demystify the process of knowledge translation, to share key learnings from our research teams across the globe and to discuss the emerging opportunities for continued and meaningful impact.

ETCRI Funding

The Call for Concept Notes on the Economics of Tobacco Control in Low and Middle- Income Countries offered up to CAD1 million over a maximum of four years to support evidence-based research on the economic rationale for the adoption of tobacco-control policies across LMICs in four regions: Asia, Latin America and the Caribbean, the Middle East and North Africa, and sub-Saharan Africa.

By targeting collaborative, applied economics research, the Initiative aimed to support the implementation of effective fiscal and other policy measures to help prevent tobacco-related diseases and save lives.