8 February 2013

Namibia: A Huff and a Puff Save Money

Short of saying the Ministry of Finance supports smoking, the CEO of the Tobacco Institute of Southern Africa, Mr Francois van der Merwe said good cooperation exists between South African and Namibian authorities referring to the Memorandum of Understanding between the Institute and the ministry, to curb illicit trade in tobacco products.

The current total cigarette market size of Namibia is estimated to be 350 million sticks of which 10% is estimated to be illicit. Because of Namibia's vast borders, it is also used by enterprising traders as a transit route for illicit tobacco products into South Africa. Namibia is abused as a transit country for tobacco products from Zimbabwe, Angola and Dubai/China, while some of the products are also sold in the Namibian market.

Over the past three years, the Tobacco Institute estimates that the South African Fiscus lost approximately R12billion due to illegal cigarette trading. "This has a direct impact not only for South Africa but also the revenue sharing SACU member states, Botswana, Lesotho, Namibia and Swaziland," Mr van der Merwe noted.

The Tobacco Institute has been actively working towards a more collaborative approach in combating illicit trade not only in South Africa, but across the southern African region. MoUs have also recently been concluded with all other SACU countries and Mozambique. Because illicit trade occurs within countries and across borders, it is necessary to work together within a legitimate framework to curb the growing tide of illegal trading in cigarettes in the southern African region.

It is against this background that the Ministry of Finance, represented by the Directorate of Customs and Excise, and the Tobacco Institute of Southern Africa (TISA) announced their collaboration within a formal framework based on their mutual commitment to facilitate legitimate trade in tobacco products, whilst combating illicit activities. The two parties signed a MOU to formalize and legitimize a platform for the exchange of information and other collaborative action in the prevention, investigation and curbing of illicit trade in cigarettes and other tobacco products.

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