Although the policymakers driving Nigeria’s recovery from stupendously difficult and heartbreaking economic scenarios think they have their eyes set on reaping as many benefits from the country’s tobacco fixation by smokers, the African Tax Administration Forum (ATAF) think Africa can get more as a whole.

Before the ATAF released the 2023 edition of the African Tax Outlook (ATO) on tobacco taxation this past 30 June, Nigeria had ambitions that clearly showed Africa’s most populous nation wanted to maximise the appetite for products like cigarettes.

In 2022, according to the Observatory of Economic Complexity, Nigeria exported US$91million worth of raw tobacco, and the main destination of the exports was Tanzania ($91million).

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Noticeably, two years ago, then Minister of State for Health, Dr Olorunnimbe Mamora had painted a picture of just how much when he was addressing a press briefing commemorating World No Tobacco Day. The former cabinet member had projected an outcome that extended to the sharp increase in tax payment by this year and all is to discourage the consumption of the nicotine-addictive plant by the population to protect their wellbeing.

This new regime increased the Ad-Valorem tax rate from 20 per cent to 30 percent, says Dr Momora in June 2022. In addition to the 30 percent ad-valorem, a specific excise rate has been increased from ₦58 to ₦84 per pack of 20 sticks of cigarette, and this will further be increased to ₦94 per pack in 2023; and then ₦104 per pack in 2024.

Analysing the state of Nigeria’s productivity among all 36 African Tax Administration Forum members since 2022, the African Tax Outlook document published last month admitted the country was a top performer year-on-year, meaning the policymakers are staying the course even though there has been a change of governments.

The C-efficiency ratio measures a country’s value-added current tax receipts against what ideally ought to have been collected if a standard rate had been applied. On this front, Nigeria is doing better than most, says the ATO publication.

Based on the Tobacco Control Data Initiative’s key insights, up to 3.2 million Nigerians between the ages of 15 and 49 used tobacco in 2018. This demography for as long as they want to remain smokers or use the tobacco plant in any type of way, should be fetching their government money.

In terms of the year-on-year changes in the C-efficiency ratios, [the] highest increases were observed in Nigeria, Benin, and Morocco whose ratios increased by 23.36, 22.58 and 22.05 percentage points during the review period, according to the African Tax Outlook of June 2024.

Three months after President Bola Tinubu assumed office, he set up the Presidential Fiscal Policy and Tax Reforms Committee (PFPTRC). The committee, led by former PricewaterhouseCoopers International Limited professional Mr Taiwo Oyedele, had as one of its duties, the job of collapsing repetitive tax items and coming up with recommendations, forging a better path forward.

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Within a maximum of 60 days, that better path will be known as the chairman has confirmed, we envisage that by quarter three, our documents will be ready to go to the National Assembly and by the end of that Q3, we should have them enacted into law.

Until then, the trajectory previously set by an earlier government to maximise tobacco cultivation and stop the youths from rapid consumption for their health and safety, will stay the same.

Ayodele Johnson

Ayodelé is a Lagos-based journalist and the Content and Editorial Coordinator at Meiza. All around the megacity, I am steering diverse lifestyle magazine audiences with ingenious hacks and insights that spur fast, informed decisions in their busy lives.