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Economic Impacts of Global Ban on Tobacco

Tobacco is by far the drug that is highly consumed in the world (Abedian, 2000). The number of people who are using the substance is estimated to be over 1 billion individuals most of whom are located in developing countries (Abedian, 2000). This number has been rising drastically due to the marketing strategies that have been employed by tobacco companies. These strategies have mainly focused on women. The focus on women has increased the preference of the drug to teenagers and children due to the direct relationship that they have with one another. Due to this fact therefore, a larger proportion of the working population is using the drug i.e. individuals between the ages of 18-69 years (Abedian, 2000).

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Nicotine is the substance that is found in tobacco. It is highly addictive. In addition, excessive consumption of the substance can lead to the development of health complication. As a result, it has been projected that by the year 2030, tobacco will be causing over 10 million deaths annually. This will make it the single largest killer in the world (MacSween, 1999). Due to this fact, several countries have tried to come up with policies and regulations to curb the use of the drug. These policies aim at reducing the consumption of the commodity using various methods; banning being one of them. However, banning of this commodity will have negative economic impacts on the tobacco industry, a venture that is well established in many countries worldwide.

The demand for cigarettes and tobacco related products is very high. To sustain this demand, many companies and industries have been established all around the world (Russell, 2000). These industries have employed millions of people. These individuals range from managers, engineers, market analysts, causal laborers and so on. If a global ban on tobacco is effected then these individuals will have no jobs. As a result, unemployment rate in all nations will increase, the standards of living will decline and the overall rate of economic growth and development will reduce drastically.

As stated earlier, there are over 1 billion uses of tobacco products in the world. Many governments have been controlling the use of tobacco products by levying high taxes on its products. As a result, they have been collecting a lot of revenue from the taxes imposed on cigarettes and other tobacco related products. This money has been used to fund other projects that have led to the growth and development of several sectors of the economy. A global ban of tobacco use will therefore lead to the loss of this revenue. This will in turn affect the rate at which the economy is growing (Productdisplay, 2011).

The consumption of tobacco is high in developing countries as compared to developed countries. Due to this fact, many foreign investors have been investing huge sums of money to establish and sustain tobacco industries in developing countries (Productdisplay, 2011). This has led to the establishment, growth and development of one of the most profitable industries in the world. Foreign investment boosts the economy of developing countries. A ban on the use of tobacco will thus have a heavy blow on this development. This will mean that the rates of unemployment will increase, there will be low economic growth and the poverty levels in developing countries will continue to rise.

From the above discussions, it is evident that the global ban of tobacco will have a heavy blow in the economy of the world. This can be attributed to the fact that the industry is critical in the growth and development of various sectors of the economy especially in developing countries. In this respect therefore, a lot of care and considerations has to be put in place before effecting a ban on the substance.


Abedian, I. (2000). Demand Elasticities, Taxation of Tobacco Products and Economic Consequences: A Developing Economy Perspective. Web.

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MacSween, E. (1999). The Case for a Strong Anti-Tobacco Lobby by the CDA—If Not Now, When, and If Not Us, Who? Journal of the Canadian Dental Association, 65, p. 40-41

Productdisplay. (2011). Effects of Point of Sale Display Bans. Web.

Russell, B. (2000). Studies on the Economic Effects of Bans. Web.

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