Special Paper No. 15 of 2014 on Situational Analysis of Illicit Trade in Tobacco Products in Kenya

Abstract

Illicit trade in tobacco products imposes many social and economic costs, including increased health expenditure as a result of increased access to tobacco products, and loss of government revenue through tax evasion. Tobacco consumption in Kenya contributes to about 3 per cent of male deaths annually. While the Kenya government has in the past taken several initiatives in terms of legislation and establishing institutions to fight not only illicit trade in tobacco products but also tobacco consumption, illicit trade in tobacco products as well as consumption are still mattering of policy concern. The purpose of this study is to investigate the nature and extent of illicit trade in tobacco products in Kenya and review the relevant institutional framework with a view to gaining insight on the various dimensions of illicit trade in tobacco products. The study used complementary approaches, including key informant interviews; analysis of seizure data; review of literature; analysis of the legal framework; and review of international best practices. The results show that cigarette is the main illicitly traded tobacco product in Kenya. Counterfeit cigarette smuggled through the sea is the main illicit tobacco import, while diverted exports by road form the main illicit product originating from the domestic economy. The key institutional challenges include weak fines, limited resources for Anticounterfeit Agency, and weak coordination and information sharing among different agencies. Regionally, the East African Community (EAC) countries are at different stages of enacting legislation on illicit trade, and this continues to pose challenges in establishing concerted effort to curb the problem.