One of the key features of the Nigerian cigarette market concerns the fact that it is one of the few in the world where non-duty paid sales were traditionally higher than legitimate volumes. Historically, this situation was brought about by excessively high import duties, but in recent years, despite a situation where import duties have been reduced, the problem has been perpetuated by inefficient border controls and rampant smuggling from neighboring markets such as Benin.
The Nigerian cigarette market improved government efforts to stamp out illegal trade, sales were estimated to have reached 17.5 billion pieces in 2014 with projections for 2015 indicating that sales will reach 18.4 billion pieces. The country's two principal manufacturers are British American Tobacco (Nigeria) Ltd, and the smaller independent International Tobacco Company (ITC) Ltd. BAT accounted for 75% of the duty paid market in 2014 with its Benson & Hedges brand holding around a quarter of sales.
The duty paid market is expected to slowly strengthen assisted by GDP growth and strong expansion in Nigeria's population.
The market will still be affected by the presence of contraband, although industry and government efforts should reduce its profile further, to the benefit of the duty paid sector.
The expected tightening of restrictions on smoking in public is set to have an impact, although its extent remains unquantifiable.
Volumes are forecast to reach 28.0 billion pieces by 2025, 52.3% up on 2015 levels.
In per capita terms, based on current population trends, this will equate to a 20.3% increase to 121 pieces.
Filter cigarettes now dominate, accounting for over 99% of duty paid sales.
Virginia blend brands are popular in the legitimate market, with American blends taking a growing share.
Mentholated brands are also important with around a quarter of sales.
King size/long lengths are now the largest sector with over 90% of sales. The majority of sales are in packs of 20.
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