Why do tobacco firms thrive in developing countries despite the industrys health concerns?
After BATU deducts loan repayments from their wages, the tobacco farmers have very little left to cater for their other financial needs.
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First published: November 10, 2007
The tobacco industry is seen in two dimensions; as a big income earner for developing countries like Uganda (where British American Tobacco Uganda is now the fifth leading tax payer) and as a major public health concern whose effects negate the profits producing nations make from it. According to the World Health Organization, for every 8 seconds that pass, someone dies from tobacco use. The WHO warns that by 2015, tobacco related deaths will be 50 percent higher than HIV/AIDS deaths, accounting for 10 percent of deaths worldwide. Yet, apart from Europe, the highest number of smokers are found in poor nations like Uganda.
WHO statistics for 2007 indicate that by the year 2030, about 80 percent of the 8.3 million annual tobacco-related deaths will occur in developing countries. The tobacco industry continues to expand into Africa, hooking many people to its products. According to a fact sheet released by the World Health Organization and the Center for Disease Control in Kampala on September 12, despite the regulations issued under Statutory Instruments 2004 No. 12 by the Minister of Water, Land and Environment, more youths in Uganda are using tobacco at an early age than before.
The fact sheet shows that at least 67 percent of adolescents between 13 and 15 years have smoked cigarettes or attempted to use tobacco products. "20.4% of the students had ever smoked cigarettes, 21% currently use any tobacco product, 8.5% currently smoke cigarettes, 17 % currently use other tobacco products, while 7.2% of never smokers are likely to initiate smoking next year," reads the fact sheet on the Uganda-National Global Youth Tobacco Survey (GYTS) 2007.
The highlights of this report (yet to be made public) also show that in addition to those who willingly take the tobacco products, many more are passive smokers, who are equally at risk of being affected by tobacco as those who actively smoke. According to the survey, 20 percent of the children surveyed said that they lived in homes where others smoke in their (children's) presence, while 48.5 percent often find themselves around others who smoke in places outside their homes (e.g. restaurants and taxis).
Experts warn that this is a time bomb waiting to explode on poor countries like Uganda, which may not have enough resources to counter cases of lung cancer and heart disease that are brought on by inhaling tobacco products. Other effects include a weakened immune system that leaves the body more vulnerable to diseases that can cause hair loss, ulcerations in the mouth and rashes on the face, scalp and hands. Others include hearing loss, skin cancer, tooth decay, wrinkling skin, stomach ulcers, discoloured fingers, uterine cancer, miscarriages in women and deformed sperms in men.
Anti-tobacco experts say that multinational tobacco corporations are very much aware of the side effects of their products but keep changing tactics by calling some of their products 'light' and influencing the creation/effectiveness anti-tobacco laws, especially in the developing world. "We have been taking note of public health concerns by developing 'lighter' products, but we cannot promote these products as 'safe' cigarettes because we simply don't have sufficient understanding of all the chemical processes to do so," says a report attributed to BAT by Tobacco Reporter in 1997.
Although they have not yet been quantified in Uganda, the health costs of tobacco are real and significant. However, the tobacco industry in Uganda is largely viewed as a major source of revenue for the nation, one that offers employment to a big number of Ugandans, especially in the West Nile region. However, anti-tobacco crusaders argue that billions of Uganda shillings of tobacco profits are not worth a single life lost from a tobacco related illness. That is why the World Health Organization woke up and called tobacco smoking a public health concern. It went ahead to come up with the Framework Convention of Tobacco Control (FCTC), a public health treaty which aims to use various approaches such as price, tax and non-price measures on the tobacco industry to end smoking.
Although Uganda slapped a ban on tobacco smoking in public places in 2004 and increased taxes on cigarettes before ratifying the FCTC in June 2007, Ugandan activists say little has been seen on the ground in terms of complete elimination of this public health problem. Jackie Tumwine, the Executive Director of the Health & Environmental Rights Organization (HERO-UGANDA) says that despite the law banning tobacco advertising and promotion, British American Tobacco Uganda (BATU) is sponsoring and chairing the Commonwealth Business Forum, 2007. "BATU's sponsorship of the upcoming Commonwealth Business Forum shows one of the ways the tobacco industry thrives. By continuing to aggressively market its lethal and addictive products through direct and indirect advertising, the industry increases tobacco consumption and diverts the attention of the public and governments from the devastating health effects of tobacco. It also protects the industry from unwanted criticism and regulations," she says.
Tumwine notes that the lack of strong tobacco industry regulation means that the industry will continue to thrive despite health concerns. "For instance, contrary to FCTC requirements, the almost invisible health warnings on cigarette packets in Uganda are inadequate in informing and protecting smokers from the devastating health effects of their habit."
Large health warnings on cigarette packets are exactly what Uganda's Ministry of Health has been advocating for. However, this has not been enforced by other government agencies, including the Ministry of Finance, because of fear that the government could lose huge sums of money in the form of taxes paid by tobacco firms.
Tumwine, who participated as an observer at the second conference of the parties to the WHO FCTC in Bangkok last July, says that over-taxing tobacco firms is an option that should be adopted because it means more wealth for the nation and better health for the citizens. "Tobacco tax increases are a win-win option because it means more money for the government coffers and improved health for the people. Raising tobacco taxes will reduce smoking rates."
This observation is supported by a recent World Bank report: Curbing the Epidemic- Governments and the Economics of Tobacco Control. According to the report, a ten percent increase in tobacco prices reduces smoking by 8% in developing countries. It says that in South Africa, between 1993 and 2003, tobacco prices doubled due to tax increases and in effect, consumption fell by about 40%, while revenues from the industry increased by 115%.
Tumwine advises the Ugandan government to increase cigarette taxes in the next budget reading - just like Kenya, Tanzania, South Africa and many parties to the FCTC have already done. She notes that previous attempts by the Ugandan government to increase tobacco taxes have been met with stiff resistance from BATU, which is proud of its position as the fifth biggest taxpayer in the country, contributing 50 billion Uganda shillings annually.
Other health and anti-tobacco experts say that although tobacco companies pay huge sums of money to governments in the form of taxes, these governments, especially those in the third world, fund a much bigger budget to finance public health programmes where illnesses related to tobacco use (including cancer and tuberculosis) consume a big part of such budgets. They add that there is a health cost these countries bear in terms of reduced production, brought about by the poor health of the labour force that is employed in agriculture and other sectors.
Researchers say that areas where tobacco is grown extensively are at a high risk of suffering from food scarcity. This is because, unlike other crops, tobacco cannot be planted together with other crops at the same time and it is a one-season crop. They say that this is the reason why tobacco-growing communities are among the poorest, particularly in Uganda. Dr. Sheila Ndyanabangi, the Tobacco Health Control focal person in Uganda's Ministry of Health, says that this is because these farmers are exploited by the tobacco companies and because they fail to grow other crops. "These farmers are given loans by BATU and then BATU determines the prices of the tobacco leaves they produce. After BATU deducts loan repayments from their wages, the tobacco farmers have very little left to cater for their other financial needs.
"These people, after receiving the loans (which often amount to between 350,000 and 500,000 Uganda shillings), buy radios and bicycles. They dance and cerebrate, only to sell these items a few months later out of poverty. These people feel rich only for a short time. This is how BATU takes advantage of the poor farmers."
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First published: November 10, 2007
Gideon Munaabi is a journalist and public relations practitioner with Ultimate Media Consult (U) Ltd. He has been and continues writing widely for different publication locally and internationally. He is a founding member of Ultimate Media Consult (U) Ltd and is currently the chairman of the organisation.