The British American Tobacco (BAT) Uganda and BAT Kenya have taken advantage of the loopholes in tobacco control governance systems and control the illicit trade of tobacco products to dump illicit cigarettes into the country, an investigative undercover report has revealed.

A spot check market survey has since established that several cigarette packets clearly labelled with digital export tax stamps for Rwanda, Tanzania and the Democratic Republic of Congo have been dumped into the Ugandan Market.

Ironically, last year, BAT Uganda launched a study, which found that 23% of cigarettes sold in Uganda were illicit, indicating unfair competition to established tobacco dealers and loss of revenue to the government.

The findings based on BAT Uganda’s approved study were carried out in the second half of 2021 by Kantar and indicated that there was a 54.5% increase in illicit trade in cigarettes into the country compared to September 2020 when the number stood at 15.4%.

The term illicit, according to BAT, refers to any cigarette pack, which based on its physical features, appears to be non-compliant with applicable legal requirements for sale in the country.

30 different packets of the Dunhill Switch had been specifically manufactured for the DRC market and also Dunhill Sweet for the Rwanda market and Tanzania respectively and were being sold in different bars, shops including Petrol stations such as ORYX and streets in Kampala ranging from sh25, 000-sh80, and 000 depending on the Location or venue.

The cigarettes had clearly been smuggled and were untaxed and unregulated.

Last year, Uganda Revenue Authority noted that trade in illicit cigarette trade could have cost the government of Uganda a total loss of about sh30b in revenue.

BAT in its 2022 performance results, said they had recorded a 6% revenue growth, to Sh99.5b.

BAT Uganda Managing Director, Mathu Kiunjuri said: “Whilst our business remains resilient, we reiterate our concern regarding the escalating prevalence of the illicit trade in tobacco products.”

It should be noted that on the 16th March 2023 BAT sponsored a Public-Private Sector Dialogue on Illicit Trade which was held at Kampala Serena Hotel, Kyoga Room.

In line with the Anti-Tobacco Control Act, such public engagements are not supposed to be sponsored by Tobacco Companies but BAT has continued to enjoy a front seat and showing the public that it is fighting Illicit Trade and yet the Government continues to lose revenue through BAT Brands being smuggled into the Country.

At the end of 2022, the illicit trade incidence in illicit tax-evaded cigarettes stood at approx. 29%, up from 24% in 2021 despite the efforts in place to curb it.” He added: “We acknowledge and appreciate efforts by the Government to fight illicit trade, including seizure of illicit cigarettes by the Uganda Revenue Authority, especially at the border towns in the North and Eastern parts of the country.

Some of the illicit cigarettes that are secretly smuggled and on sale in Uganda

While launching the Kantar report on June 28, 2022 BAT Board Chairperson, Elly Karuhanga, said that the biggest concern to the tobacco industry relates to tax-evaded cigarettes bearing fake stamps or no tax stamps at all.

“These products also do not bear the prescribed graphic health warnings on their packaging, in contravention with the Tobacco Control Regulation, 2019,” he said.

Karuhanga said the study reveals that more than half of illicit cigarettes (51%) on the market appear to be manufactured in Uganda based on the park markings with the rest being smuggled into the country from other countries and yet our investigations prove that what BAT said is true only that much of the products falling in that category are their high-end brands.

The same cigarettes being sold on the Ugandan market and imported from BAT sister company BAT Kenya were illicit and did not have the marks, no health warnings, packaging or labeling requirements which a requirement was set by the Ministry of Health and were readily available to several youths endangering their lives. They also didn’t have the necessary digital tax stamps of Uganda.

 These illicit products were untaxed and unregulated, and according to a report by the World Health Organization (WHO) affordability and accessibility to such cigarettes lead to increased use, this downward spiral into poverty and illness because of money spent on tobacco, and additional money spent on treating its ill-health effects, has dire health and economic consequences.

WHO in its 2022 report says that Tobacco use kills nearly 6 million people every year, including the 600 000 who are killed by the effects of exposure to second-hand smoke. Tobacco use is one of the main risk factors for a number of non-communicable diseases, including cancer, lung diseases and cardiovascular diseases.

Negative health impacts are associated with the use of all types of tobacco, including cigarettes, water pipes and smokeless tobacco.

The adverse health effects of tobacco use are also experienced by non-smokers exposed to secondhand smoke. Long-term exposure to second-hand smoke increases the risk of lung cancer, coronary heart disease and respiratory problems.

The investigation has revealed that cigarettes were being smuggled into the country disguised as legitimate brands such as Sportsman which is a serious customs offence and could attract penalties and jail sentence if found guilty in line with the East African Community Customs Management Act section 203, 207,208 and 210 respectively.

Illicit tobacco trade protocol to the WHO Framework Convention on Tobacco Control is the first international legal instrument that provides countries with guidance on political, technical and international collaboration, needed to eliminate the illicit trade in tobacco products.

Eliminating the illicit trade of tobacco products, will increase tobacco product prices, lower consumption, reduce premature deaths, and increase government revenues. Ratification, acceptance, approval or accession to the Protocol to Eliminate Illicit Trade in Tobacco Products is the starting point.

The Uganda Revenue Authority on March 5, 2023 launched an operation targeting BAT products and this website still waits to see what action will be done on all those behind.

It should be noted that Tax evasion is a Board room policy and from research BAT has been a subject of various Tax Evasion Investigations cases and Uganda should be on a watch out,

It is alleged that for every carton imported into the country from Kenya, some Dunhill Bombers are hidden. This will be the work of Customs to subject risk management and verify 100% on such consignments.

The investigations showed various places and made purchases of the Illicit Brands and the following are established sources of BAT brands as detailed: Cask bar kololo, Plot 8 lounge Kololo, Levers bar Kololo, Lavent Najera, Old Timers Ntinda, Total Ntinda, Oryx Nalya, Total Kyaliwajara, Nexus Najera, Chambers Ntinda, Shell kiwatule, Oryx kiwatule, Xhub Najera, Oryx Lugogo bypass.

WHO recommended actions for eliminating the illicit trade in tobacco products, is to commit to, and become Party to the Protocol to Eliminate Illicit Trade in Tobacco Products. Ratifying, accepting, approving or acceding to the Protocol, is the starting point to saving lives lost to tobacco.

When contacted for a comment, BAT MD Mathu Kiunjuri said he was not in Uganda and the company will issue a statement at an appropriate time.

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Bank of Uganda Monetary Policy Committee (MPC) has maintained the Central Bank Rate (CBR) for the month of April 2023 at 10%.

Michael Atingi-Ego, the BoU Deputy Governor, said this is to continue the sustained economic recovery that is marked by a drop-in inflation.

The March 2023 data from the Uganda Bureau of Statistics indicated that annual headline and core inflation dropped to 9.0% and 7.6% in March 2023 from 9.2% and 7.8% in February 2023, respectively.

“In the MPC’s current assessment, absent new shocks, inflation will continue decelerating and converge to the 5% target by the end of 2023. The factors favouring the continued decline of inflation are lower energy prices, improved global supply chains, lower food crop prices due to favourable weather, the existing spare capacity in the economy, and the exchange rate stability owing to tight monetary and fiscal policies,” Dr Ego said at a press conference on Thursday, 06 April 2023.

The Deputy Governor also explained that whereas the tight monetary policy has enabled the economy to recover, there are still internal and external risks.

“The MPC assesses that the near-term risks to the inflation outlook remain elevated, with considerable uncertainty surrounding the economic outlook,” he said.

“Economic growth remains on a recovery path, averaging 6.8% in the first two quarters of the Financial Year (FY) 2022/23, supported by a stronger recovery in services and agriculture output,” he said.

Dr Ego said, however, the quarterly economic growth for Q2 FY2022/23 dropped to 4.4% from 9.2% for Q1 FY 2022/23, due to a decline in industrial output and a moderation in services output growth.

 “Moreover, growth in economic activity, measured by high-frequency indicators, points to a moderation in recent months. The Composite hides of Economic Activity (CIEA) grew by 0.9 percent in the three months to February 2023, lower than 1.2% in the quarter to November 2022. The moderation in growth partly reflects the tight monetary and fiscal policies, as the increase in domestic interest rates and tight credit standards by banks affected the growth in private sector credit,” he explained.

Bank of Uganda projects economic growth in the 5.5 – 6.0% range for FY2022/23, remaining below its long-term trend until FY2025/26 partly because of the tight domestic and external financial conditions.

“Moreover, growing external financing needs are expected to put pressure on the shilling. With lower export-to-import prices and slower growth in export volumes, the current account balance is forecast to deteriorate to a deficit of 7.4% of GDP for the next three years, keeping some drag on economic growth,” the Deputy Governor said.

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Marie Stopes Uganda (MSU) and Dfcu Women in Business Program have announced a joint campaign that will allow the Bank’s female customers to get access to free and specialised healthcare services for a period of one month, starting March 3, 2023. The campaign will run under the name, ‘Every Stage of Woman.’

Under the campaign, Marie Stopes Uganda will offer free gynecology and antenatal consultations, free screening services which include body mass index, blood pressure and breast examinations. Dfcu’s customers will also get access to subsidized pap smear tests and family planning services.

Through ‘Every Stage of Woman’, Dfcu bank seeks to create an environment where women who use its financial solutions can easily access wellness tests that will help them know the status of their health and make informed lifestyle choices. 

‘‘Empowering women is a core contributor to socio-economic transformation, and as Dfcu bank we strive to create an environment that allows for all-round wellness and empowerment,’’ said Ruth Asasira, the Manager, Women in Business and Special programs at Dfcu bank Uganda.

Speaking at the launch of the event, MSU’s Deputy Country Director, Dr. Peter Ddungu stated that Marie Stopes Uganda is committed to prioritising women’s health and wellness throughout Uganda.

“Women, in their quest to juggle multiple roles, often fail to prioritise their own health by neglecting regular check-ups and preventive care. Marie Stopes will continue to provide holistic solutions to promote accessibility and awareness about women’s healthcare – including sexual and reproductive health. Women’s health is a great contributor to successful business outcomes in women-led enterprises and we are delighted to partner with Dfcu bank on our For Every Stage of Woman campaign,’’ he said.

Robert Wanok, Dfcu bank’s Ag. Chief Commercial Officer &, Head Personal and Business Banking reiterated Dfcu’s commitment to empowering the members of the communities in which it does business.

“At Dfcu bank, we recognise the vital role women play in our society, and we understand the challenges faced by women everywhere, including poor health. We, therefore, encourage our female customers to prioritize their well-being by taking advantage of the free and subsidized healthcare services offered at Marie Stopes Hospital & Maternity and various centres.”

“This partnership is a testament to our commitment to Making More Possible in our communities, and we applaud Marie Stopes Uganda for their dedication to improving women’s quality of life and for working with us in pursuit of the same” Wanok added. 

The campaign will run for a period of one month, starting on 31st March.

All women who bank with Dfcu are encouraged to visit any nearby Marie Stopes Centre and hospital with their National ID and Dfcu Visa Card to access these services.

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