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Tanzania’s Silent Crisis: The Cost of Illicit Alcohol on Lives and Revenue

Tanzania must not only strengthen its regulatory and law enforcement frameworks but also address the root causes driving people to the illicit alcohol market: poverty, unemployment, and lack of education.

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The illicit alcohol trade is not just a criminal enterprise; it’s a shadow economy that undermines Tanzania’s progress. Every untaxed bottle of illegal alcohol represents stolen opportunities—funds that could support public services, improve healthcare, and drive development projects. 

Research reports and experts state that beyond the financial cost, this trade fuels public health crises and deepens social inequalities, particularly for women and vulnerable communities.

Despite government efforts to combat the illicit alcohol trade, the issue persists. According to media reports and statements from police and the revenue authority, measures implemented include surprise inspections of dealers, the introduction of the Hakiki Stempu App for tax stamp verification, and arrests in areas such as Arusha.

The Hakiki Stampu app allows the public to check their consumer products. The check detects the security features of the excise tax stamps registered.

Hakiki Stampu allows users to scan the product to see if it’s registered. PHOTO |MICHUZI BLOG.

Yet, the black market continues to deprive the government of critical tax revenue, undermine public health, and perpetuate cycles of gender-based violence (GBV).  

READ MORE: President Samia Defends Ousted Tax Boss. Here is Why the New Commissioner Has His Work Cut Out

Tax evasion within the illicit alcohol trade directly undermines Tanzania’s fiscal stability. “Government revenue collection—taxes such as excise duty, VAT, and Electronic Tax Stamps—are lost as people purchase from unscrupulous traders who don’t pay requisite taxes,” says tax expert Benedict Kombaha from  KPMG Advisory Limited. 

He highlights how, if properly collected, this revenue could fund essential projects like the Standard Gauge Railway (SGR) and improve public services.  

Illicit products

A 2022 OECD report titled Illicit Trade in High-Risk Sectors: Implications of Illicit Alcohol for Public Health and Criminal Networks reveals that 25 per cent of global alcohol consumption involves illicit products, with even higher rates in low-income countries like Tanzania. Smuggling from neighbouring nations with lower alcohol taxes further fuels the black market. 

This revenue diversion hinders Tanzania’s efforts to achieve the United Nations Sustainable Development Goals (SDGs), which include fostering good health, economic growth, and justice. As Namanga border officer Lucas Damas notes, “We still have a person in custody who we believe is not a Tanzanian, acting as a local agent supplying illegal alcohol in Longido.”  

Illicit alcohol, often produced in unsanitary conditions, poses severe risks to public health. These unregulated products frequently contain harmful substances like methanol, which can cause fatal poisoning. Lower-income consumers, more likely to buy cheaper alcohol, are particularly vulnerable, exacerbating social inequality and overburdening healthcare resources, states the OECD report.  

READ MORE: Cancellation of Tax Amnesty Regulations: What Went Wrong?

Pregnant women face additional risks. Dr Samia Lasway from Sokoine Regional Referral Hospital warns, “Women who drink during pregnancy risk having a baby with foetal alcohol spectrum disorder, which involves birth defects, behavioural issues, and intellectual disabilities. 

Alcohol use can also lead to miscarriage, stillbirth, or preterm delivery.” She adds that excessive drinking among women contributes to mental health disorders, infertility, and chronic diseases like kidney failure. “Heavy drinking doubles the risk of developing kidney disease, which weakens the kidneys’ filtering ability.”  

Counterfeit goods

A report by Enact, Organised Crime Index 2023 for Tanzania, reveals that the counterfeit goods trade significantly threatens the country’s economic growth. Over half of Tanzania’s imported goods, including pharmaceuticals, food, construction materials, clothing, electronics, and auto spare parts, are counterfeit. 

Additionally, the illicit trade in excise goods is common, with smugglers avoiding taxes on products like alcohol and cigarettes. Illegal alcohol sales make up more than half of the beer market in Tanzania.

The International Alliance for Responsible Drinking (IARD) 2018 report titled Alcohol in the Shadow Economy Unregulated, Untaxed, and Potentially Toxic states that alcohol abuse also worsens GBV, with studies linking it to increased intimate partner violence (IPV). 

READ MORE: How Fair Is Tanzania’s Tax System?

Alcohol impairs judgment, reduces impulse control, and intensifies aggression, often resulting in household violence. The widespread availability of low-cost illicit alcohol disproportionately affects low-income communities, fuelling addiction and destructive behaviours.  

Women are particularly vulnerable, both as direct consumers of unsafe alcohol and as victims of alcohol-related violence. The financial strain caused by addiction diverts household resources from necessities, escalating stress and increasing the likelihood of domestic violence. In economically disadvantaged households, women often bear the brunt of alcohol-related tensions.

The informal economy, where illicit alcohol is commonly traded, further exposes women to exploitation and violence due to a lack of regulation. Unsafe trading environments heighten risks of harassment and abuse. Women also face compounded physical, mental, and emotional tolls from living in communities where GBV is widespread and normalised.

Unsafe trading environments heighten risks of harassment and abuse. PHOTO | PIXABAY.

Cycles of poverty

According to Dr. Lasway, Illicit alcohol consumption perpetuates cycles of poverty, addiction, and violence, eroding the social fabric of Tanzanian communities. In areas with high alcohol abuse rates, incidents of GBV, sexual assault, and human trafficking are often more prevalent, disproportionately affecting women and girls. 

The economic costs extend beyond the individual, burdening families and impeding national development. Dr Lasway says: “The long-term consequences of alcohol abuse are not just personal but societal, affecting Tanzania’s ability to thrive.”

READ MORE: Street Vendors’ Struggles in Tanzania and How Media Was Used Against Them

To address this crisis, according to Kombaha,  Tanzania must not only strengthen its regulatory and law enforcement frameworks but also address the root causes driving people to the illicit alcohol market: poverty, unemployment, and lack of education.

Public awareness campaigns and targeted interventions to support vulnerable communities are essential. Greater investment in healthcare and social services can help break the cycle of addiction and its related harms.

Zahara Tunda is a freelance journalist based in Dar es Salaam, Tanzania. She can be reached at zahratunda@gmail.com or on X as @zahratunda. This story was developed following a journalistic training program in which Zahara participated. The project received support from the Thomson Reuters Foundation as part of its global work aiming to strengthen free, fair and informed societies. Any financial assistance or support provided to the journalist has no editorial influence.  The content of this article belongs solely to the author and is not endorsed by or associated with the Thomson Reuters Foundation, Thomson Reuters, Reuters, nor any other affiliates

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