Illicit cigarette trade costs Kenya Ksh.9 billion annually, new report reveals

The report shows that the share of illicit cigarettes in the market has surged from 27% in 2023 to 37% in 2024—a concerning trend with major economic and security implications.

The findings come as the Kenya Revenue Authority (KRA) reports an increase in the value of smuggled goods this year, rising by KShs 43.5 million to reach KShs 243.5 million. According to BAT Kenya, the spike in illicit cigarette sales is now costing the country an estimated KShs 9 billion annually in lost tax revenue—funds critical for public services and national development.

Crispin Achola, Managing Director of BAT Kenya, expressed deep concern over the trend:

“This rise in illegal cigarette trade not only deprives the government of vital revenue but also undermines security and threatens the livelihoods of thousands of Kenyans connected to the legitimate tobacco supply chain.”

The report highlights that a significant proportion of illicit cigarettes entering Kenya originate from neighboring countries, with Uganda identified as a major source. The cross-border nature of the trade presents significant enforcement challenges and calls for coordinated regional responses.

Achola emphasized that the issue extends beyond lost revenue:

“Illicit cigarette trade is a matter of national security. Each illegal cigarette sold strengthens organized crime networks and harms legitimate businesses. While we acknowledge the efforts of Kenyan authorities and regional partners, a more robust and collaborative approach is urgently needed.”

He called for joint action involving government agencies, law enforcement, the private sector, civil society, and the media to effectively combat illicit trade and protect Kenya’s economic and social interests.

“This is a fight that no one entity can win alone. Our commitment to addressing this issue is unwavering, but it requires a unified front to safeguard Kenya’s future.”

As Kenya continues to grapple with revenue pressures and economic uncertainty, addressing illicit trade—particularly in high-revenue sectors like tobacco—remains a national priority