Addressing obesity in South Africa through taxation

November 17, 2016

In 2008, it was estimated that South Africa’s total burden from non-communicable diseases (NCDs) stood at 40%, and was steadily increasing. Obesity is a risk factor for many NCDs, including stroke, heart disease, hypertension, diabetes, and cancer.

A three-year research study supported by IDRC, “The economic and health impacts of legislative and fiscal policies to improve nutrition in South Africa”, found that a sugar-sweetened beverages (SSB) tax of 20% can reduce obesity by 3.8% in men and 2.4% in women. This reduction would account for 25% (the equivalent of 220,000 adults) of the target in the National Department of Health Strategic Plan for the Prevention and Control of NCDs (2013–2017). The same tax can reduce diabetes prevalence in adults by 4%, and incident cases of the disease by 160,000 over 20 years. Similarly, the incidents of stroke cases could be reduced by 85,000 over 20 years. It is estimated that healthcare cost savings during that period could be US$860 million for diabetes-related care, and up to US$576 million for stroke-related care.

This demonstrates that fiscal and regulatory policies can have a significant impact on the health of the South African population. However, these policies are only one component of a multi-pronged strategy to address obesity. They should be accompanied by other effective initiatives such as reducing the availability of unhealthy products while increasing the accessibility of fresh and minimally processed foods, and regulating food labelling, advertising, and marketing to reduce consumption of unhealthy products.

The project produced more than 10 peer-reviewed papers that make important contributions to existing scientific literature on SSB taxation and its potential impact on population health. Such literature is scarce in both high-, middle- and low-income countries because SSB policies are relatively new.

This research provided evidence for policymakers about the positive health impacts that an SSB tax could have in South Africa, as well as the costs of inaction. The research team regularly engaged with the Chief Director of NCDs at the National Department of Health and was invited to speak to government on the matter. The team also met with Treasury to discuss excise taxes. In addition, Prof. Karen Hofman, the project’s principal investigator, was appointed a member of the national Obesity Task Team.

In March 2016, South Africa’s Ministry of Finance introduced an SSB tax in the budget speech; this will come into force in April 2017. Although the Department of Health had previously considered introducing a tax on sugar-sweetened foods and beverages in the country, the evidence and dialogue generated by this project on SSB taxation played a key role in speeding up the process, resulting in a concrete policy outcome only a few months after project closure.

Read more about the project outputs: