Reports from Malawi have indicated that investigations by the Malawi Police Service have revealed that Malawi loses millions of dollars in export and tax revenue through smuggled tobacco to neighbouring countries with more than 15% of the leaf on the Zambian market coming from Malawi and eventually being imported back into Malawi as Zambian or Mozambican tobacco.

Deputy Commissioner and Head of Community Policing Services, George Kainja, said Malawi lost close to 90 million metric tonnes of tobacco through smuggling every year.

"The police will do all it can to ensure that the malpractice is eradicated," he said.

However, according to a report of the police investigations, farmers are forced to smuggle Malawi tobacco because of problems associated with selling tobacco in the country.

"There is a general perception that the long-term solution to the problem is to remove the problems associated with the system of selling raw tobacco in Malawi,” reads the report.

Among the problems, the report observed, "there are numerous and exorbitant taxes and levies on their tobacco".

The report also said there were long delays "for farmers to receive their money after selling the leaf at auction floors."

Noel Kayira, Projects Officer in the Community Policing Branch of the Malawi Police Service, said in 2005 alone, over 50,000 metric tonnes of tobacco, valued at US$ 59 million was smuggled out of Malawi.

"This is an equivalent of 34% of 145,000 tonnes sold at auction floors in that year," he noted.

Kayira said some of the factors that influenced smuggling included bureaucracy in the auction floors and avoiding taxes, levies for membership, transport, storage fees, avoid handling queries and corrupt customs personnel.

"Evidence shows that smugglers along Malawi's borders with Zambia in 2006 earned an estimated net return of US$ 0.60/kg of tobacco after receiving US$ 1.10/kg at illegal markets in Zambia and deducting costs for transportation, fertilizers and other production costs," he said, adding that "a farmer selling his tobacco at auction for US$ 1.18/kg a higher price per kilogramme than what smugglers receive, only earned a net return of US$ 0.34 after subtracting deductions."

Kayira said the police investigations revealed that multi-nationals in the tobacco sector, independent traders and farmers, people at high levels, such as government officials and politicians, small scale farmers, tenants, transporters and those involved sell their tobacco to subsidiary companies with import permits in Malawi fuel the malpractice.

He said, meanwhile, the police had embarked on an awareness and civic education campaign and would join operations with the Malawi Army and tobacco industry stakeholders to combat the vice.

Tobacco accounts for up to 75% of Malawi's foreign exchange earnings and contributes 23$ of the country's taxes.

The leaf also contributes to over 30% of the country's Gross Domestic Product.

To cap it all, over 80% of Malawians are employed directly or indirectly by the tobacco industry, according to Pan-African News Agency.