BAT Battles Billion Pounds Lawsuits

+Do Fintechs Facilitate Illicit Financial Flows?

BAT Battles Billion Pounds Lawsuits

Individuals who realise the damage tobacco production has constituted to their health, whether they are active smokers or not, are leading the legal battles against tobacco companies, the British American Tobacco (BAT) 2023 Annual Report shows.

256 cases, amounting to 83% of the total 308 cases filed against BAT subsidiaries globally in 2023, were filed by or on behalf of individuals.

In Nigeria, none of the six lawsuits was an Individual Smoking and Health Case. 

Instead, the 6 cases were filed by the federal government and 5 Nigerian states of Kano, Oyo, Lagos, Ogun, and Gombe, collectively demanding N10.6 trillion from the BAT Subsidiary in Nigeria to cover healthcare expenses associated with smoking-related diseases.

British American Tobacco (BAT), a multinational company, produces and sells cigarettes, tobacco, and other nicotine products.

These lawsuits were instituted at different times, notably in 2007, 2008 and 2017.

In Oyo State, on November 13, 2015, and February 24, 2017, BAT challenged the jurisdictional issues in the Court of Appeal, leading to the setting aside of the writ of summons.

This legal and regulatory action will likely present substantial financial risks for BAT. However, these risks are nothing compared to the huge risks its products pose to public health and the general economy.

Globally, tobacco use places a huge health burden on individuals, communities, and healthcare systems alike.

An estimated 8.7 million deaths are attributed to direct tobacco use yearly, 1.2 million of which are a result of environmental exposure to tobacco smoke. 

Tobacco use varies in prevalence across different regions. It comes in the form of smoked or smokeless tobacco, cigarettes, shisha and others. 

The prevalence rate of tobacco use in Nigeria has generally decreased in the last two decades. 

In Nigeria, Tobacco use among men saw a significant fall from 15.2% in 2000 to 6.2% in 2020. For women, it decreased from 1.7% to 0.5% in the same period.

While the level of decline in tobacco use in Nigeria is noteworthy, its continued use remains a significant concern for both the health of individuals and the country's economy.

Tobacco use is a lifestyle choice that often leads to adverse health conditions in users. Its use has been associated with different diseases, including heart disease, cancer, stroke, and many other non-communicable diseases.

In 2019, Nigeria recorded an estimated 2.7 million tobacco-attributable diseases. The highest disease incidence in this period is chronic lower respiratory disease, followed by tuberculosis, cardiovascular diseases, and variants of cancer.

Besides the health risks that tobacco use/smoking poses to users, they also incur huge economic losses in terms of lost productivity, costs of treatment and overall burden on the health sector.

According to the Tobacco Control Data Initiative, 15 non-communicable diseases were associated with tobacco use in 2019. This accounts for N24.4 million in direct health costs.

In 2022, the Nigerian Federal Competition and Consumer Protection Commission (FCCPC) fined British American Tobacco $110 million for alleged violations of the Nigerian Competition and Consumer Protection Act.

Amidst these legal feuds, finding a balance between business potential and the broader public good is essential to ensure that business operations do not infringe on community rights.

According to the World Health Organization, a 50% increase in taxes on cigarette packs would lead to a reduction of 49 million smokers and prevent 11 million smoking-related deaths globally.

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Do Fintechs Facilitate Illicit Financial Flows?

Recently, the Central Bank of Nigeria directed 4 fintech companies, including Opay, Kuda, Moniepoint, and PalmPay, to cease onboarding new customers.

This action follows allegations that certain bank accounts associated with these fintech companies are involved in money laundering and terrorism financing.

Fintechs in Nigeria have evolved over the years, offering various financial solutions to the larger consumer community. 

Despite the disruptive innovation that fintechs bring to the Nigerian banking sector, certain issues with their operations threaten their operations. These include compliance with government regulations, data security, lack of mobile and tech expertise, etc.

Fintech companies are financial institutions that provide various financial services through technological innovation and credit solutions. These services include remittances, business lending, mortgages, blockchain, and cryptocurrency. 

The number of fintech companies in Nigeria has increased by 193% in the last seven years, from 74 in 2017 to 217 in 2023.

Presently, OPay has accumulated a user base of over 35 million registered app users and 500,000 agents in Nigeria who depend on its services for money transfers, bill payments, and more. 

Moniepoint serves over 3 million customers, while Palmpay boasts over 30 million users and serves numerous businesses. 

Kuda, on the other hand, has garnered a user base exceeding 6 million.

Thanks for reading this edition of Marina and Maitama. It was written by Funmilayo Babatunde and edited by Oluseyi Olufemi.