Charting a Blueprint for the Tobacco Industry

Why are there so many gaps between regulation and policy action within Nigeria’s Tobacco Industry, Solomon Elusoji and Ugo Aliogo wonder
It was a bright Wednesday morning at Protea Hotel Ikeja GRA. The day was carved out to discuss the policy regulation facing the Food, Beverage and Tobacco industry. Experts in the industry saw the moment as an opportunity to exchange ideas on the challenges facing the sector, and proffer solutions on the way forward for the industry, considering its negative trajectory in 2016. The event was the breakfast dialogue session organised by Initiative for Policy Analysis (IPPA) with the theme: ‘Moving from Regulation to Policy Action- the Challenge’.

To begin the dialogue session was the Director, Research and Advocacy, Lagos Chamber of Commerce and Industry (LCCI), Dr. Vincent Nwani. He is a man with an appetite for knowledge. With over 14 years industry experience, his career has endowed him with robust experience and an excellent track record in banking and finance.

He began his presentation without elaborate preambles, focusing on the regulations guiding the diversification of the Nigeria economy. He took a cursory look at the elements affecting the Nigeria business environment. He explained that multiple taxation and the policy duplicity of governments were one of the major problems facing businesses in the country.

Nwani’s argument is that the aforementioned challenges have increased the cost of doing business, created regulatory uncertainty, and reduced Nigeria’s attractiveness as an investment destination.

This is true, especially in Nigeria’s Tobacco industry. In his remarks, the Chairman, House Committee on Information, Hon. Odebunmi Dokun, expressed displeasure over the non-passage of the National Tobacco Control Act (NTCA).

He said despite the enactment of the Act in May 2015, there are still concerns expressed in some quarters, while assuring participants at the event that there are concerted efforts in addressing these concerns without compromising public interest.

He further explained that the non-passage of the Act has worsened the business environment for the private sector players.
“It is not just accidental therefore that the National Bureau of Statistics (NBS) reported that the food, beverage and tobacco industry contracted by the end of 2016 at -2.7 per cent from 5.8 per cent in the third quarter,” he said.

Dokun who was represented by his Special Assistant, Al-Marruf Ajibolu, added that the lack of effective implementation of the provisions contained in the Act, has made it inappropriate in reforming the Act.

He further stated: “Globally, regulations are important as a way to forestall possible externalities. The recognition of the important role that regulations could play in bringing about a sustainable society is a key reason why legislative processes usually involves many stakeholders in order to ensure that the outcomes consider all shades of opinion.

“Without this, the law may not be balanced, which will likely lead to lots of unintended consequences. The Nigeria’s National Assembly has demonstrated this belief by ensuring that viewpoints of all actors are considered in the course of law-making. This is usually in form of public hearing and consultative/constituency meetings.

“Therefore, I strongly believe that laws should always be implemented before the consideration of any amendment. They have to be tested, evaluated, gaps identified and addressed before new laws or amendments are introduced. The act can only be implemented by the executive branch and not by the stakeholders in the sector.

“I want to enjoin everyone to join hands with the government in the implementation of the law and point out whatever gaps that may exist. As you all know, perfection is a process and every one of us are part of that process. I want this gathering to know that whatever Act that is passed by the National Assembly, it is meant for the general well-being of the citizenry. We are your representatives and we are doing people’s business.”

In his remarks, the Executive Director of IPPA, Mr. Thompson Ayodele, said as a group their focus is not only on tobacco, but on the food and beverages industry, adding that the sector is very important to the growth of the economy.

He added that the growth of the sector was slow; as a result it could not contribute to the Gross Domestic Product (GDP) which means that if it continues it would affect the overall growth of the economy, especially with the country’s exit from recession.

Ayodele added: “stakeholders in tobacco industry are committed to adhering to the provisions of National Control on Tobacco Act 2015 because the Act forbids promotion of tobacco products in Nigeria. As such industry leaders prevent youth access and smoking at point of sale and discourage the sale of tobacco products near schools.

“Also it strongly discouraged the use of child labour at tobacco retail points to prevent minors from selling and promoting the use of tobacco products and do not partner with anyone who engages under aged persons to sell their products.

“The premise of the report is biased and flawed as the report was embarked on to basically validate the position of those who commissioned the report. This is because available facts do not support the key arguments in the report. Facts show that tobacco is a declining product globally and smoking prevalence rate in Nigeria is the lowest.
“This is why the argument of child smoking and selling to school children is flawed. Again and again the law clearly forbids selling to minor and legal producers will always obey the law in both production and distribution of their products. Should any infringement be noticed, they should be able to report to the regulators, but none so far in the public domain.”

Regulations are critical to shaping environments and societies. The objective of any regulatory policy is to ensure that it works effectively and is in the public interest. For highly regulated products, such as tobacco industry, a fair balance has to be made for all areas involved in public interest. This consists of those who consume the products and those that don’t. Sovereignty also plays a critical role as regulations takes different shapes dependent on various factors such as capacity, economy, infrastructure, and funding. The role of regulations for products and services is always critical to the success of any economy. That means foreign laws should not be copied into Nigeria without considering the local peculiarities.

Also speaking at the event, a UK-based Health Economist, Dr. Damilola Olajide, said available data on tobacco use in Nigeria do not support an overly regulated tobacco industry, adding that the current level of regulations seems more of doing the dictates of World Health Organisation (WHO) than what is required locally.

He also stated that effectiveness in the regulation of tobacco use is largely dependent on addressing complementary health behaviours (alcohol), noting that there is a socioeconomic dimension to tobacco use which requires targeted regulatory regimes.

Olajide argued that when the production, distribution, or consumption of a product or service imposes some externalities for health hazards on the public, the market price for the product or service would not capture the associated hazards imposed on the society.

“Regulation is essentially important to ensure that the public interest is protected. It often takes the form of interventions by government agencies in the private market to implement policy and efficient outcomes,” he noted.