Beyond tragedy: Why Uganda's illicit alcohol crisis demands comprehensive action

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OPINION

By Emmanuel Njuki

When ten people, including two children, were killed by illicit alcohol in Kyotera District in 2023, there was an understandable outpouring of grief.

While the community mourned, police seized huge volumes of the local brew waragi and health authorities prohibited its production and sale.

But such a crisis-driven response, while necessary in the moment, failed to address the wider problem, which still exists today.

The uncomfortable truth is that the Kyotera tragedy was not an isolated incident but a symptom of a much larger crisis that continues to devastate Uganda’s economy and endanger public health.

Today, illicit alcohol dominates our market in ways that should alarm every policymaker and citizen who cares about Uganda’s future.

The scale of the problem is staggering. In 2024, illicit alcohol sales represented an overwhelming 67% of the total alcohol market in volume terms, and 40% in value terms, according to a damning Euromonitor report.

This means that more than two out of every three alcoholic drinks consumed in Uganda are produced and sold outside the regulatory framework designed to protect consumers and ensure fair taxation.

The fiscal haemorrhaging is equally dramatic. Illicit alcohol is bleeding Uganda’s treasury of sh3 trillion annually - a figure that has grown by a shocking 80% since 2020. To put this in perspective, that loss is significantly more than half of what the Government plans to spend on education this year.

However, most Ugandans do not fully grasp the economic dimensions of this crisis.

Research shows that while consumers are concerned about health risks related to illicit alcohol, only 10% associate illicit beverages with tax evasion or the loss of government revenue. This disconnect between public perception and economic reality is part of the problem.

The Ushs. 3 trillion we are losing annually to illicit alcohol represents foregone investments in hospitals, schools, roads and other essential infrastructure. Every bottle of illegal waragi or counterfeit whiskey sold represents stolen resources that could have been used to improve the lives of all Ugandans.

The irony is bitter. At a time when the government is striving to increase domestic revenue by almost sh5 trillion by 2027, criminal networks are stealing more than half that amount annually just from alcohol alone. It is economic sabotage on a massive scale.

The solution requires more than incident-driven responses. We need comprehensive reform that addresses the root causes of illicit alcohol proliferation. This includes better regulation of ethanol production that fuels counterfeits, stronger enforcement against illegal distilleries and public education about the true costs of illicit alcohol consumption.

We also need to examine whether our tax policies are inadvertently encouraging illicit trade. When legal alcohol becomes prohibitively expensive due to high taxes, consumers inevitably turn to cheaper illegal alternatives, creating a vicious cycle that undermines both public health and revenue collection.

We need sustained political will and coordinated action to tackle the illicit trade crisis.

Uganda cannot afford to wait for another tragedy like Kyotera to act. We need smart policymaking and decisive action before the trillions lost to illicit trade become even more devastating to our economy and our people’s lives.

The writer is the Chairperson, Uganda Alcohol Industry Association