POLITICS AS USUAL;TOBACCO ECONOMICS AND TOBACCO HARM REDUCTION Presented by: Sahan Lungu Tobacco Harm Reduction Advocate 13 MARCH, 2019 Contact email address: sahanlungu@gmail.com Phone: 0997 950 309 / 0884 283 007

INTRODUCTION This is a brief presentation on The state of tobacco economics and its political impact on tobacco harm reduction in Malawi It will look at; Current tobacco economics trend in Malawi, The political context in relation to tobacco production, use, public health and harm reduction

Tobacco Economics in Malawi Malawi’s economic ties to tobacco production fall in two broad categories. The relationship between tobacco production and country-level economic factors. The relationship between tobacco production and the economic livelihoods of tobacco growers. The country’s economy is heavily reliant on tobacco for income generation Malawi is currently ranked 9th amongst the largest tobacco producing nations in the world Tobacco is the main cash crop and top forex earner contributing to approximately 60% of the total forex revenue each year. Over the past decade, tobacco has represented 40.6-63.6% of Malawi's total exports Major Export Commodities such as foreign exchange earnings and direct and indirect economic effects of tobacco industry investment In 2018, tobacco revenue reached a record high of USD 337.5 million, up from the USD 212.4 million in the previous year

Tobacco Economics in Malawi… The sector contributes to at least 23% of the tax base and about 13% of gross domestic product Tobacco related employment is at 12% of the workforce The industry is however threatened by diminishing demand largely due to the anti-smoking lobby Global cigarette sales have fallen by 7.6% between 2012 and 2016 We can not stress enough the importance of the tobacco industry to the country’s economy, but Malawi’s tobacco exports have fallen by 33% in quantity between 2012 and 2016

Tobacco in the political context… Tobacco’s success or lack thereof on the market has adverse effects on the Malawi economy. Tobacco revenue has the power to either make or break the country's economy. The outcome of which is reflected in the country's economic performance thereby dictating the direction of mainstream political rhetoric.

Tobacco in the political context… There is a tobacco-related public health crisis in the country However, there is guarded support for tobacco harm reduction in the country 5700 people are killed each year by tobacco related diseases Coupled with the health care cost of treating smoking related diseases and lost productivity Still 5, 000 children and 707 000 continue to use tobacco.

Tobacco in the political context… It is a common challenge for tobacco producing countries to develop tobacco policy that is coherent and consistent across the health and economic sectors. There is a common narrative promoted by tobacco interests that tobacco control will result in economic hardship for the country Governments of many tobacco-producing countries also continue to claim that tobacco control hurts farmers’ livelihoods Policy makers often weigh the health benefits of tobacco control measures against the potential economic losses that may be brought about in a country that is largely dependent on tobacco Recent research across major tobacco-growing countries demonstrates that farming tobacco is not prosperous for most smallholder farmers. Many farmers pay too much for inputs (e.g., fertilizer, pesticides, etc.), receive very low prices for their leaf, and dedicate hundreds of hours to a mostly unprofitable economic pursuit. The opportunity costs of farming tobacco are high, the research demonstrates consistently that many tobacco farmers underestimate their costs and overestimate their returns. Farm-gate prices of tobacco in Malawi have fallen by 54% between 2012 and 2016

Tobacco harm reduction in Malawi Existing forms of tobacco control do not carter to helping people shift away from tobacco smoking The well-known piece of legislation is the "Tobacco Act" which regulates the production, manufacturing and marketing of tobacco; There is little to do with the health protection of smokers from the dangers of using combustible cigarettes There is; No national agency focused on tobacco use control, Which is the main No restrictions on smoking in public places, No restrictions on advertising or promotion. No law requiring tobacco packaging to display a warning No laws requiring a minimum tobacco exercise tax rate

Tobacco harm reduction in Malawi… Lack of regulatory support is slowing the uptake of tobacco harm reduction Malawi is not a signatory of the FCTC which provides legal dimension for international health cooperation on set public health obligations Understandably so because The FCTC has a rather stronger stance against tobacco growing, but they do raise genuine public health concerns in regards to tobacco smoking

Tobacco harm reduction in Malawi… There is a need to enhance efforts towards reducing the health risks associated with combustible tobacco products Lack of knowledge of SNP and NRT among the local smoking population Lack of access to SNP and NRT among the local smoking population Basically restricting smokers out of viable healthier options All at a serious public health cost to the country 1.Safer Nicotine Products, Nicotine Reduction Therapy

Tobacco harm reduction in Malawi… It should be noted that Malawi is not and cannot be invisible to the pressure from anti-smoking lobbyists. It is high time Malawi had a real political discussion on the need to adopt tobacco harm reduction The country also needs to intensify the implementation of tobacco harm reduction initiatives On the economics side, striving to protect smokers from smoking associated harms does not impede on income generation that comes from exporting tobacco…otherwise we already spend a lot importing the harmful cigarettes

Tobacco harm reduction in Malawi… As of 2015, it was stated that 21% of the word population smoked and it was projected that the figure will drop to 17% by 2030. This means that demand and prices of raw tobacco worldwide will continue to drop. Even though tobacco revenue was at a record high last year, the country cannot guarantee the same for this year or in the long run The country needs to step up efforts towards the finding and farming of substitute cash crops in order to reduce the tobacco over reliance. Agricultural Transformation Initiative (ATI) Preparing for a smoke-free future by facilitating globally competitive economies and farmers While we work to address the tobacco related public health concern, And this should be part of a long-term plan of strategically moving away from the tobacco over reliance…there are projects currently that are working towards helping farmers and the country transform away from tobacco farming, for example They have what I view as a comprehensive outlay of how they can achieve the transformation, they summarize their plan into a cycle Coming to this point, let us keep in mind that, even though the tobacco industry is economically important to Malawi, we also need to also look at the larger public concerns about smoking and the need to protect the health well-being of the close a million smokers in the country.

Thank you!