At today’s 24^th Annual General Meeting of British American Tobacco Uganda Limited (BAT Uganda) held at Sheraton Kampala Hotel, Henry Rugamba has been announced as the incoming Board Chairperson. He takes over over from Hon. Dr. Elly Karuhanga who retired from the position that he has held since 2013.

At the same meeting, shareholders also approved UGX8.9 billion (UGX181 per ordinary share) as a first and final dividend for the year ended 31^st December 2023.

The dividend, which is in line with the Company’s 100% dividend pay-out policy, will be paid net of withholding tax on 30^th July 2024 to shareholders whose names appear on the Company’s share register at the close of business on 26^th July 2024.

Mr. Rugamba is a seasoned business leader and public relations professional with 30 years in public relations and marketing communications. He began his career at BT Group plc in the United Kingdom (formerly British Telecom), before joining British American Tobacco, where he worked in the Marketing and Corporate Affairs departments for over 10 years. After a period in consultancy work, Henry joined Umeme Limited as Head of Communications, where he was instrumental in building Umeme’s brand and implementing a successful stakeholder management policy.

Henry joined the BAT Uganda Board as a director in 2022.

Commenting on the business’s outlook during the AGM, BAT Uganda Managing Director, Mathu Kiunjuri said that the business’ fundamentals remain solid, amidst a challenging operating environment.

“The strategic guidance of Henry and the entire Board remains critical to addressing the high prevalence of illicit cigarettes in the country, leading to an estimated revenue loss to the Government of Ushs 30 billion annually, continued shrinkage of the legitimate cigarette market, and related challenges such as the funding of criminal activity as reported in the Eastern and Southern Africa Anti Money Laundering Group (ESAAMLG) 2018 report on Smuggling of Cigarettes and Associated Money Laundering in the ESAAMLG Region,” Mr. Kiunjuri said.

“BAT Uganda welcomes the opportunity for an enhanced approach to addressing these challenges, focused on leveraging partnerships for the effective enforcement of anti-illicit trade policies and regulations,” he added. 

Dr. Elly Karuhanga, the outgoing board Chairperson said that after 11 years as Chairperson of the BAT Uganda Board, he was proud of the “achievements we have made over time to further solidify the Company’s position as a resilient and progressive business entity”. 

“I appeal to the Government to increase efforts towards the fight against illicit trade, especially in cigarettes. Working closely with the private sector, I am optimistic that this challenge can be dealt with sustainably. Further, I congratulate Henry on his appointment, and wish him, together with the entire Board, every success as they steer the affairs of the Company forward,” Karuhanga emphasised.

BAT Uganda is a member of the BAT Group, a leading, multi-category consumer goods business, with brands sold in more than 180 markets. BAT began operations in Uganda in 1928 and has been listed on the Uganda Securities Exchange (USE) since 2000. Approximately 1,200 of BAT Uganda’s shareholders are local (East African). BAT Uganda is in the business of distribution and sale of cigarettes in Uganda. 

Rugamba joins at one the most difficult moments of the company characterised by over-regulation, over-taxation, illicit trade, as well as a besiegement by the local and global anti-tobacco movements.  

Numbers show, that between 2016 and 2023 turnover has declined by 37.8% from UGX138.3 billion to UGX86 billion.  

In fact, UGX86 billion is the lowest turnover, ever since the company listed in 2000. While the company has been profitable between 2016 and 2023, profitability growth has also been erratic with a CAGR of just 1.7% in net profitability across this period. The problem seems to lie in erratic cigarette sales performance- at least for 5 of the 8 years, the company has alluded to low sales volumes in its annual reports, without saying how much exactly.

The company is also faced with the challenge of fewer and fewer smokers every other year.

A Global Adult Tobacco Survey (GATS) report for 2013 done by Uganda’s Ministry of Health, together with the Uganda Bureau of Statistics, the World Health Organisation, CDC Foundation and the Centres for Disease Control and Prevention reported that 7.9% (1.3 million) of Ugandans aged above 15 were using tobacco products. Overall only 5.8% of adults (above 18 years) were using tobacco products and of these, 5.3% smoked cigarettes, with the rest using other tobacco products. 

GATS is one of the components of the Global Tobacco Surveillance System (GTSS) established by WHO, CDC) and other partners to systematically monitor adult tobacco use (smoking and smokeless) and track key tobacco control interventions.

However, according to Dr Hafsa Lukwata, Head of the Ugandan Health Ministry’s Mental Health Division, there has been a 51% drop in the prevalence of tobacco smoking between 2014 and 2022.

“Since the law came into force, smoking prevalence has fallen from 7.9% in 2014, to 3.8% in 2022,” she says.

The law in question is the Tobacco Control Act 2015, which came with a raft of measures aimed at controlling smoking.