BAT Kenya CEO Sidney Wafula Prioritizes Fight Against Illicit Trade and Growth of Modern Nicotine Products

Sidney Wafula, recently appointed Chief Executive Officer of British American Tobacco (BAT) Kenya, has outlined his key priorities amid a challenging business environment marked by illicit tobacco trade and evolving regulatory landscapes.

Combating Illicit Tobacco Trade

Wafula emphasized that tackling the high levels of illicit cigarette trade is critical for the company’s sustainability. He highlighted that illicit cigarettes account for a significant portion of the market, citing South Africa’s factory closure as a cautionary example where 75% of cigarettes are illicit. According to Wafula, this illegal trade not only undermines BAT’s competitiveness but also results in substantial tax revenue losses estimated at KSh 12 billion annually, mainly from excise and VAT.

Expanding Modern Oral Nicotine Products

Another strategic focus for Wafula is the growth of modern oral nicotine products, which currently contribute about 1% of BAT Kenya’s revenue. The company re-entered this market segment in June 2025 after regulatory uncertainties had previously caused a pause. Wafula envisions this category growing to represent 15-20% of total revenue in the medium term, aligning with BAT’s goal to provide safer alternatives to traditional smoking.

Regulatory Environment and Tax Policy

Wafula called for progressive, balanced, and evidence-based regulations, particularly in light of the impending Tobacco Control Bill. He stressed the importance of regulatory certainty to support business planning and potential revival of manufacturing operations for modern oral products in Kenya. On taxation, Wafula welcomed the government’s stable tax policy over recent years and proposed a multi-year excise roadmap to help manufacturers and the government plan effectively, ultimately benefiting the economy.

Addressing Enforcement and Corruption Challenges

Highlighting enforcement gaps, Wafula noted the need for decisive, coordinated, and sustained government action involving multiple agencies to curb illicit trade. He acknowledged corruption as a root cause undermining enforcement efforts and urged for a robust crackdown to uphold existing regulations.

Engagement Approach with Policymakers

Wafula advocates for transparent dialogue with regulators, sharing extensive industry experience and evidence to inform policy decisions. He aims to foster open discussions to reach balanced outcomes that reflect the varying harm profiles of tobacco and nicotine products.