WORLD – Tobacco use poses not only a public health threat but also a significant economic cost to countries, employers and workers, according to a brief published by the United Nations Development Programme (UNDP) in collaboration with the Secretariat of the World Health Organization Framework Convention on Tobacco Control (WHO FCTC).
According to the brief, “Tobacco Control: What Ministries of Labour and Employment Need to Know,” published in 2024, the economic losses associated with smoking are estimated at approximately 1.8% of global GDP, with low- and middle-income countries bearing around 40% of this burden.
Across 24 low- and middle-income countries assessed under the FCTC 2030 project, the cost of tobacco use was estimated at more than 2% of annual GDP on average. The brief notes that stronger tobacco-control measures in these countries could help prevent approximately $64 billion in economic losses over 15 years, by reducing healthcare costs and productivity losses.
The impact of tobacco also extends to employers and public spending. Global healthcare expenditure related to diseases caused by smoking is estimated at approximately $422 billion annually.
Tobacco Taxes Generate High Returns
The brief highlights the strong economic returns from investing in tobacco control. Across the 24 countries assessed, intervention packages generated an average return on investment of $41 for every $1 invested over five years, rising to $101 over 15 years.
Tobacco taxation is identified as one of the most economically effective tools. In Jordan, raising cigarette taxes in line with World Health Organization recommendations was estimated to generate a return of $647 for every $1 invested over five years, increasing to $1,547 over 15 years.
The Jordanian example highlights the gap between tobacco-industry revenues and the broader economic cost of tobacco use. The tobacco industry generated JOD 889 million in 2015, while total economic losses resulting from tobacco use reached approximately JOD 1.6 billion.
Protecting Workers and Supporting Alternatives
The risks associated with tobacco extend beyond smokers. The brief highlights labour conditions linked to tobacco farming, including low-paid labour, forced or bonded labour, child labour and occupational health risks, including nicotine poisoning caused by direct contact with tobacco leaves.
At the same time, the report stresses the importance of providing sustainable economic alternatives for workers and farmers dependent on tobacco production. In Kenya, farmers shifted to alternative crops, including high-iron beans, with sales exceeding 550 tonnes by January 2023. Zambia also explored a social bond model aimed at improving farmers’ incomes while protecting forests.
The brief calls on ministries of labour and employment to participate in national tobacco-control coordination efforts, cooperate with employers and workers’ organizations, use economic evidence when developing policies, support economically viable alternatives for tobacco-sector workers and protect policymaking from interference by the tobacco industry.
The brief concludes that tobacco control can generate benefits extending beyond improved public health, including reducing economic losses, increasing productivity, lowering healthcare costs and supporting healthier and more sustainable labour markets.
