The Case for Sin Taxes in Africa
South Africa – which has the highest obesity rates in sub-Saharan Africa – took a bold move this weekend in the right direction to try to erase this dubious distinction. On April 1st, the government’s Sugary Beverages Levy came into effect in an effort to bring down obesity rates by 10% by 2020. The tax will raise prices for soda and other sugary drinks, and was applauded by the WHO and other stakeholders as a move that should be emulated by other countries in Africa.
Indeed, having successfully fought against the spread of infectious diseases such as HIV/AIDS and tuberculosis, whose rates have fallen dramatically across Africa over the past decade, governments there now face a new dilemma: countering lifestyle illnesses, or non-communicable diseases (NCDs) such as obesity, diabetes, cardiovascular illnesses and certain types of cancer.
But thanks to private corporate interests, don’t expect the road ahead to be without hiccups.
Because roughly at the same time that South Africa was implementing its sugar tax, efforts in Kenya (which has among the highest diabetes rates in the continent) took a step backwards – in part due to successful lobbying efforts by soft drinks manufacturers.
Late last year, the Kenya Revenue Authority announced plans to enforce excise stamps on soda and other bottled beverages in a long-overdue move to rein in sugar intake, broaden tax compliance, and raise its revenues. Unsurprisingly, the move was bashed by the soft drinks industry, which even threatened to pull out of the country. Luckily, due to a court case filed by a local activist, that was no longer the case. Just as the South African government was putting the final touches on its sugar tax legislation, a judge overturned efforts by Kenyan lawmakers to impose the tax. The judge found the tax unconstitutional and an “unfair burden” on consumers and taxpayers – a rather spurious assessment that breezes over the fact that NCDs are notoriously expensive to treat and take a heavy toll on Kenya’s cash-strapped economy.
As NCDs grow throughout Africa, policymakers might be discouraged by Kenya’s abortive efforts. But giving in to corporate interests for the sake of short term economic gains will only result in long-term problems, as rising sugar consumption continues to fuel rates of obesity-related diseases in the coming decades. This means that taxes on sugary beverages and other preventative initiatives will help them achieve both health and development goals.
According to the latest Global Nutrition Report, a quarter of the world’s 41 million overweight children under the age of five now live in Africa, a figure that has nearly doubled over the last 20 years. More than 30% of adults living on the continent today are overweight, according to the WHO, with obesity rates nearing 10% even in some of the poorest countries such as Sierra Leone and Liberia. And in an ironic twist for a continent that has spent most of the past 50 years battling malnutrition, the WHO says that it is obesity-related NCDs such as diabetes that are now expected to become the single largest killer in Africa by 2030.
Which is where sin taxes come in: raising the price of sugary drinks and junk food will not just deter public consumption but will also generate more funds for state coffers. The WHO strongly promotes sin taxes on sugary drinks, as well as on alcohol and tobacco, as a cost-effective measure that has been shown to curb the threat of NCDs that kill 40 million people worldwide each year and account for 70% of all deaths.
So far, more than 30 countries have introduced a tax on sugary drinks or passed legislation to implement such a policy. A larger group of countries, including the Philippines, Antigua, Nepal, and the Seychelles are debating the introduction of a tax on sugary drinks. Such policies have already helped people choose heathier products: in Mexico, for instance, soda consumption fell by between 7-10% and water consumption rose following the implementation of a sugary drink tax.
Of course, that’s not to say that a sugar tax – or any kind of sin tax – will be a silver bullet. Other key measures in curbing the rise of NCDs in Africa include investing in health education, improving nutrition labels on products, and banning marketing of such goods to children. But when it comes to both curbing unhealthy behaviour and increasing the funds available to government health authorities, there’s nothing like a sin tax. One can only hope that more governments will follow South Africa’s example and see this logic, before rising NCDs become the continent’s next epidemic.