Tobacco Taxation, Smuggling, and Street Tobacco Vendors in Eritrea

Eritrea has taken steps to control tobacco use. Its 2004 proclamation aims to curb consumption, as do higher tax rates on cigarettes and other tobacco products. However, in spite of these measures, tobacco consumption is increasing. Enforcement of the proclamation is weak, and cheap, smuggled cigarettes and other tobacco products are widely available.

The tobacco problem is complex. Eritrea's border is poorly guarded, which encourages smuggling and makes these products easy to access. The bulk of the smuggled cigarettes are sold by street vendors, many of them women and children, giving Eritreans access to cheap tobacco products. It also helps expand the market for the tobacco industry.

These contraband cigarettes do not meet the tobacco control proclamation's requirements, and weaken its value. There are also strong indications that the tobacco industry sees Eritrea as a strategic gateway to east and northeast Africa. The industry may be planning to develop Eritrea as a distribution hub for its products. This will make the country even more vulnerable.

This project will assess the impact of tobacco taxation, smuggling, and street vending on consumption, and its implication for tobacco control in Eritrea. Researchers will use quantitative and qualitative methods to:

  • assess the impact of taxation on tobacco consumption and use control;
  • determine the price elasticity of tobacco products (change in demand based on cost), particularly cigarettes;
  • assess trends and identify networks of smuggling and legal cross-border shopping for tobacco products, particularly between Sudan and Eritrea, and its implications for government revenue;
  • identify the reasons why people sell on the streets; and,
  • analyze how the tobacco industry and smugglers use street vending as a retail outlet.

Project ID

106840

Project status

Closed

Start Date

Friday, May 31, 2013

End Date

Tuesday, March 31, 2015

Duration

18 months

IDRC Officer

Lecours, Natacha

Total funding

CA$ 84,900

Countries

Eritrea, North of Sahara, South of Sahara, Sudan

Program

Food, Environment, and Health

Project Leader

Zemenfes Tsighe

Institution

Makerere University

Institution Country

Uganda

Institution Website

http://www.makerere.ac.ug