Cigarette market dynamics in Ethiopia
Commissioned by the National Tobacco Enterprise (NTE) in Ethiopia
While Ethiopia already had a large illicit cigarette market prior to 2020, recent changes to the excise regime and the implementation of higher excise taxes have affected the country’s legal and illicit market dynamics.
Whereas excise was previously levied as an ad valorem rate based on cigarette production costs, a new mixed excise regime was introduced early in 2020. The new excise regime consists of an ad valorem rate in addition to a fixed charge per pack of cigarettes. The fixed rate per pack of cigarettes was subsequently more than doubled in 2024.
Against this background, this study analyses how the legal and illicit market dynamics changed from 2019 (prior to the introduction of the new mixed excise regime) until 2025. It also examines the size of the illicit cigarette market in the country and quantifies the foregone tax revenues due to illicit cigarette sales.
The experts behind the research
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Cobus de HartDirector of Africa Consulting, OE Africa
Cobus is currently the Director of Consulting at Oxford Economics Africa, previously the company’s Chief Economist for North and West Africa. Cobus completed his B.Com Econometric Analysis degree at the University of Stellenbosch, opting to also pursue a B.Com Honours in Economics at the same institution. He spent two years with GSEC, a consultancy focused on strategy realignment services in the public and private sectors, before moving to B&M Analysts as a research analyst and later project manager. During this time, Cobus completed his master’s degree and thereafter completed a D.Com in Economics at the University of South Africa. Cobus has been at Oxford Economics Africa for ten years and has managed and worked on a significant number of bespoke projects for both local and international clients, governments and multilateral institutions.
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