Governments worldwide are hemorrhaging revenue as illicit alcohol and tobacco markets expand, and Uganda is no exception. The hidden costs are staggering–not just for public coffers, but for public health.
The World Health Organization (WHO) estimates that the global illicit tobacco trade drains an eye-watering $40.5 billion (around Shs 153 trillion) from governments each year.
In some countries, illegal tobacco accounts for 40-50% of total sales.
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Cigarettes remain the prime culprit, but other products such as smokeless tobacco and shisha are surging.
Between 2012 and 2013, seizures of smokeless tobacco rose from 8 to 38 tonnes, while shisha seizures increased from 69 to 75 tonnes.
The implications are devastating. Eliminating the illicit tobacco trade could recover at least $31.3 billion (Shs118 trillion) annually and, from 2030 onwards, prevent over 164,000 premature deaths worldwide, particularly in developing countries.
WHO urges nations to commit to the Protocol to Eliminate Illicit Trade in Tobacco Products–a binding international instrument designed to coordinate political, technical, and legal measures against the trade.
Uganda, however, faces a twin challenge. Beyond tobacco, illicit alcohol is exploding. The Uganda Alcohol Industry Association, in partnership with Euromonitor, released a report titled, “Understanding the Illicit Alcohol Market in Uganda,” revealing that illegal alcohol now dominates 71% of the market, up from 69% in 2020.
The statistics are alarming. Ugandans consume an average of 4.6 litres of illicit alcohol annually–almost double the 2.3 litres of legally sold alcohol.
Uganda’s total alcohol market in 2024 was valued at Shs15 trillion, with Shs6 trillion coming from illicit sales.
Tax losses alone are estimated at Shs 3 trillion, an 80% increase in just four years.
Several factors fuel this booming shadow industry. Affordability and accessibility top the list: some unregulated alcohol products sell at prices up to 81% lower than legal alternatives.
Deep-rooted cultural acceptance of local brews such as malwa, waragi, and tonto, often produced in unregulated conditions, compounds the problem.
Health risks are severe. Many artisanal brews contain unsafe ingredients or are improperly distilled, resulting in alcohol poisoning, long-term illness, and even death.
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Weak enforcement and regulatory gaps allow producers to operate with impunity, creating a ticking public health time bomb.
“This is more than just lost revenue; it is a growing public health crisis,” said a senior official from the Uganda Alcohol Industry Association during the report launch at Serena Hotel.
Stakeholders, government representatives, and civil society groups voiced alarm over the scale and impact of the illicit market, stressing that action is long overdue.
Uganda’s struggle mirrors a global trend but hits harder in countries where healthcare systems are already strained and tax revenues are crucial for social services.
Experts urge a multi-pronged approach: stronger enforcement, public awareness campaigns, and regional cooperation.
For tobacco, this means acceding to the WHO Protocol to Eliminate Illicit Trade in Tobacco Products.
For alcohol, a national strategy is needed–one that goes beyond law enforcement to include taxation, public health measures, and cultural engagement.
The warning is clear: without decisive action, Uganda risks watching billions of shillings slip away while its citizens pay the price through preventable illnesses and deaths.
The clock is ticking, and the public, industry, and government must act together–or continue to face the devastating consequences of inaction.
