July 29, 2025 (New York)— Governments are under increasing pressure to respond to the growing noncommunicable disease (NCD) crisis by securing sustainable financing and strengthening health systems. Vital Strategies, in collaboration with the Economics for Health team at Johns Hopkins University and the Research Unit on the Economics of Excisable Products at the University of Cape Town, today released “The Future of Health Financing in Africa: The Role of Health Taxes,” which presents evidence that targeted excise taxes on harmful products such as tobacco, alcohol and sugar-sweetened beverages can be a transformative tool in improving public health and boosting domestic revenue across Africa.
Africa faces mounting public health threats: a rapidly growing toll of NCDs alongside persistent infectious diseases, all exacerbated by rapid urbanization, changing demographics and tightened domestic budgets. Meanwhile, official development assistance is declining and financing for NCDs remains woefully low, despite NCDs accounting for over one-third (37%) of deaths across the continent.
“Health taxes on all unhealthy products—including tobacco, alcohol and sugary drinks—save lives, reduce health care costs and generate revenue,” said Dr. Mary-Ann Etiebet, CEO and President of Vital Strategies. “The “Future of Health Financing in Africa” brief is a powerful tool, offering regionally grounded evidence, policy examples and practical guidance to support African governments in their efforts to resist industry interference and design and implement health taxes that maximize benefits for citizens, advance government priorities and secure a healthier future for their populations. This is even more relevant today as governments grapple with budget deficits, overwhelmed health systems, rising health care costs and a growing burden of noncommunicable diseases.”
The brief outlines how well-designed health taxes are a triple win for African countries:
- Premature Deaths Averted. Numerous studies in countries of all income levels show that excise taxes on unhealthy products drive down consumption and can also incentivize producers to shift to products with lower levels of harmful ingredients.
- Domestic Revenue. Health taxes provide stable and predictable funding streams that can be allocated to strengthen public health systems and other development priorities such as education, infrastructure and social protection.
- Health Cost Savings. Health taxes can reduce the incidence of disease, injury and preventable deaths, thereby allowing governments to redirect scarce resources toward other development priorities.
Despite the proven benefits and potential for generating substantial revenue, including recommendations from the World Health Organization and Africa Centres for Disease Control and Prevention, health tax implementation across Africa remains insufficient. Most African countries apply excise taxes on tobacco, alcohol and sugary drinks, but at rates too low to reduce affordability and consumption. In addition, poor design often leaves the taxes vulnerable to inflation and industry interference.
“The structure and design of health taxes matter,” said Corne van Walbeek, Director of the Research Unit on the Economics of Excisable Products, University of Cape Town. “International best practice indicates that taxes that are levied as a specific amount per pack of cigarettes, or per litre of alcohol, or per gram of sugar in sugar-sweetened beverages, are better than taxes that are levied on the value of these products. Taxes should be increased regularly to take account of both inflation and real income growth. When well designed, and protected against industry manipulation, health taxes lower consumption of unhealthy products and offer governments a stable revenue stream.”
“A 50% price increase on tobacco, alcohol, and sugary beverages could raise $2.1 trillion in five years for low- and middle-income countries, revenue equal to 40% of their total health spending,” said Jeffrey Drope, Ph.D., Research Professor and Director of the Economics for Health team at Johns Hopkins University. “That’s the scale of opportunity we are looking at. Health taxes are one of the most powerful tools we have to tackle the growing burden of preventable disease in Africa.”
The brief highlights success stories across the continent that demonstrate the potential of well-designed health taxes:
- In 2018, South Africa introduced an excise tax on sugary drinks, resulting in a ~29% reduction in taxed beverage purchases per person, with a ~51% less sugar intake as the industry reformulated products. The tax also raised ~R5.8billion (~US$319 million) in the first two years.
- In 2021, Botswana introduced a sugar tax at 2 thebe per gram of sugar for sugar content beyond 4 grams per 100 mL (~US$0.04 per can of soda). In the 2023-24 fiscal year, the tax generated about 100 million Botswana pula (~US$8 million).
- In 2023, Ghana increased taxes on tobacco products, increasing the tax share of the retail price from 23% in 2020 to 38% in 2024. The tax revenue more than doubled, from GHS 82 million (US$5.4 million) in 2021 to over GHS 187 million (US$12 million) in 2023.
“Health taxes are among the most effective public health interventions available to governments to address the growing burden of noncommunicable diseases like cardiovascular disease, cancer and diabetes,” said Adam Karpati, Senior Vice President, Public Health Programs at Vital Strategies and co-author of the new brief. “Governments around the world, recognizing the multiple benefits of health taxes—saving lives, reducing health care costs and raising revenue—are taking action. All countries should follow suit.”
“Taxes are synonymous with trust,” said Serah Makka, Executive Director for Africa, ONE. “Because there’s such a resistance to increased prices of any nature, whether elastic or inelastic, the population must be informed how these funds will be spent, and there must be a transparent through-line from the increased taxes in the product to the development that can be seen, felt and experienced by citizens. There is an openness to paying taxes where people can see what it’s used for.”
As the global community prepares for the upcoming UN High-Level Meeting on NCDs this September, “The Future of Health Financing in Africa: The Role of Health Taxes” urges African leaders and global policymakers to adopt and strengthen health taxes. Best-practice health taxes—designed to rise with inflation and income, earmarked for public benefit, and shielded from industry interference—are foundational to protecting public health.
Read the full brief here: https://www.vitalstrategies.org/resources/the-future-of-health-financing-in-africa-the-role-of-health-taxes/
For more information on Vital Strategies’ work on health taxes, please visit: https://www.vitalstrategies.org/healthtaxes
About Vital Strategies
Vital Strategies believes every person should be protected by an equitable and effective public health system. We partner with governments, communities, and organizations around the world to reimagine public health so that health is supported in all the places we live, work, and play. The result is millions of people living longer, healthier lives.
To learn more, visit vitalstrategies.org, or follow us @VitalStrat.
About Economics for Health
Based at the Johns Hopkins Bloomberg School of Public Health in the Department of Health, Behavior & Society, we conduct economic research to demonstrate the effects of existing policies and chart pathways to new ones that promote healthier populations and more robust and equal economies. Our approach emphasizes collaboration among economists, health experts, key stakeholders, and decision-makers. Fiscal policies are pivotal drivers of everything, from the decision to smoke and consume alcohol, to food choices, and to environmental factors. In our work, we support researchers in low- and middle-income countries to build a local evidence base for effective economic policies like tax that can engender both improved public health and economic prosperity. Learn more at www.economicsforhealth.org
About Research Unit on the Economics of Excisable Products
The Research Unit on the Economics of Excisable Products (REEP) at the University of Cape Town is dedicated to advancing knowledge and evidence-based policy on excisable products such as tobacco, alcohol, and sugar-sweetened beverages. REEP conducts independent and cutting-edge research on the economic, public health, and social implications of excise taxation. We want to support policy to promote health, reduce harmful consumption, and enhance fiscal policies. Through collaboration and engagement with stakeholders, REEP aims to contribute to the development of effective tax policies that balance public health objectives with economic and social considerations. Learn more at commerce.uct.ac.za/reep
About ONE
ONE is a global, nonpartisan organization advocating for the investments needed to create economic opportunities and healthier lives in Africa. Our trusted advocacy uses hard-hitting data, grassroots activism, political engagement, and strategic partnerships to influence decision-makers. Learn more at www.one.org