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Stronger tobacco control is good news for the economy

Publish Date:

September 20, 2022

The economic impact of tobacco on countries and communities is enormous. The tobacco industry produces and markets products that kill millions of people prematurely, robs households of finances that could have been used for food and education, and imposes immense healthcare costs on families, communities and countries. Conversely, strong tobacco control measures as included in South Africa’s Control of Tobacco Products and Electronic Delivery Systems Bill, will create jobs, improve lives and livelihoods, say South Africa’s leading health and community organisations forming part of the Protect our Next initiative.

In South Africa, the economic cost of smoking was estimated at R42 billion in 2016. This includes total healthcare costs (R14.48 billion), the cost of productivity loss (R369 million), and the cost of premature death (R28.5 billion). Conversely, over the 2016/2017 period, the tobacco industry generated just R12 billion in excise taxes. “This means that the economy loses R3.43 for every R1 raised from tobacco tax revenue,” says  Prof. Lekan Ayo-Yusuf, Director of the National Council Against Smoking (NCAS) and the Head of the School of Health Systems and Public Health at the University of Pretoria . “It’s clear that the huge burden that tobacco use places on our health system and economy trumps any economic contribution from the industry.”

To put these numbers in perspective, the Tobacco Control Data Initiative shows that if the annual economic cost of tobacco was available to be used, it could build approximately 250,000 Reconstruction and Development Programme (RDP) houses; pay approximately 215,000 high school teachers for a year; or provide approximately 8.8 million children with the Child Support Grant for a year.

Over-inflating negative economic and employment impacts of tobacco control and tax policies is a commonly used tactic by the tobacco and e-cigarette industries to oppose policies that might reduce sales and profits.  However, Ayo-Yusuf says studies show that a decline in expenditure on tobacco is usually associated with an increase in expenditure on other goods and services in the economy. “The money saved by consumers from not using tobacco products is spent on other goods and services, creating jobs in these sectors,” says Ayo-Yusuf.  “In terms of the overall impact on both health and the economy, the benefits of reducing smoking rates and properly regulating e-cigarettes in South Africa will always far outweigh any cost to industry.”

While the net effect of tobacco control policies on employment may be negative in a small number of countries that are heavily dependent on growing and exporting tobacco, South Africa is not one of these countries, says Ayo-Yusuf. The number of jobs dependent on tobacco has been falling in most countries, largely due to advances in farming and manufacturing processes to maximise profit for shareholders, rather than the impact of tobacco control laws or taxation increases.

Tobacconomics research reports indicate that empirical evidence, mostly based on simulations of sharp declines in consumption, shows either no effect or a net-positive effect of tobacco tax and other tobacco control policies on overall employment, especially in net-importing countries. In the net-exporting countries, global rather than domestic tobacco control policies are more likely to have an impact on employment. Even in those cases, the effect would be gradual. “The economy can gradually adjust to the change and government has time to allocate resources in a way that would assist people to transition to other livelihoods.”

The 2021 Global Adult Tobacco Survey for South Africa (GATS-SA) found that 12.7 million people use tobacco, 29.4% of our population. It further revealed the highest prevalence of e-cigarettes and emerging products was in the 15-24 age group, an alarming statistic for harmful products.  21% of e-cigarette users have been using these products for more than two years while many continue to also smoke, indicating users simply sustained or switched addiction. 

“There is an urgent need to protect our youth from the impact of tobacco and e-cigarettes,” says Sanele Zulu of the South African Tobacco-Free Youth Forum (SATFYF). “The research shows how economies can prosper and lives can be saved when governments implement cost-effective, proven measures, like smoke-free policies, restrictions on tobacco industry marketing activities, prominent health warning labels and significant tax increases on tobacco products. Instead of allowing the tobacco companies to continue to reap profits while creating huge burdens on our public health, our government should strengthen tobacco policies and increase taxes.”

South Africa’s proposed new tobacco control regulation, the Control of Tobacco Products and Electronic Nicotine Delivery Systems Bill,  includes these measures and also regulates electronic nicotine delivery systems (vapes).

Lorraine Govender of the Cancer Association of South Africa (CANSA) says that evidence-based tobacco control interventions as included in the Bill make sense from an economic as well as a public health standpoint. “Tobacco control is a critical measure to reduce the economic burden of NCDs in South Africa, mostly cardiovascular disease, cancers, chronic obstructed pulmonary disease and diabetes. NCDs account for the deaths of over 50% of South Africans prematurely every year. It’s time for South Africa to strengthen our tobacco control legislation and pass the Bill. It can only benefit our economy and our health.”


About Protect our Next

Health organisations forming part of the #protectournext partnership include the National Council Against Smoking (NCAS), the Cancer Association of South Africa (CANSA), the Heart and Stroke Foundation South Africa (HSFSA) and the South African Tobacco Free Youth Forum (SATFYF). Together, these organisations are steadfast in driving awareness of the dangers of tobacco and e-cigarettes, while campaigning for the Control of Tobacco and Electronic Delivery Systems Bill to be passed.

About the Bill:

The Tobacco Control Bill requires that any enclosed public area is 100% smoke-free, and will make certain outdoor public places smoke-free too, providing protection for many South Africans who are often involuntarily exposed to second-hand smoke. It removes the requirement to provide for smoking areas in all enclosed public places, workplaces and on public conveyances and applies the 100% smoking ban to common areas of multi-unit residences. It further prohibits smoking in private dwellings used for commercial child care or education, and in cars carrying children under 18, rather than under 12.

The Bill introduces uniform plain packaging for all brands and pictorial warnings on all packages. Cigarette advertising at tills and the sale of cigarettes through vending machines will be prohibited. Importantly, the Bill also includes the regulation of e-cigarettes.



Prof. Lekan Ayo-Yusuf, Director of the National Council Against Smoking (NCAS) and the Head of the School of Health Systems and Public Health at the University of Pretoria

Sharon Nyatsanza (PhD), Deputy Director, National Council Against Smoking (NCAS)

Dr Catherine Egbe, Specialist Scientist: Alcohol, Tobacco and other Drug Research Unit, South African Medical Research Council

Sanele Zulu, Convenor: South African Tobacco Free Youth Forum

Zanele Mthembu, Public Health Policy and Development Consultant

Lorraine Govender, National Manager, Health Promotion, CANSA


Tamaryn Brown

Connect Media for CART Agency

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