Kampala, Uganda : A new report by the Uganda Alcohol Industry Association (UAIA) has revealed that Ugandans consume twice as much illicit alcohol as legally regulated alcohol, posing significant risks to public health and government revenue.
According to the study, titled “Understanding the Illicit Alcohol Market in Uganda,” Ugandans consume an average of 4.6 litres of pure illicit alcohol per year, compared to just 2.3 litres of legal alcohol. This means the average Ugandan drinks the equivalent of four 500ml beers, four glasses of wine, or seven 30ml shots of vodka per week from unregulated sources.
The report, researched by Euromonitor International and launched at Kampala Serena Hotel, found that illicit alcohol now accounts for 71% of Uganda’s alcohol market, up from 69% in 2020. Traditional fermented beverages like Malwa, Kwen, Kasese, and Arege dominate this sector.
The total alcohol market in Uganda was valued at Shs 15 trillion in 2024, with Shs 6 trillion (40%) coming from illicit sales. This illegal trade has led to massive tax losses, estimated at Shs 3 trillion in 2024 alone.
Emmanuel Njuki, UAIA Vice Chairperson, warned that the government is losing crucial revenue. “Legal alcohol contributes over Shs 1 trillion in taxes, yet illicit alcohol—which makes up 65% of the market—pays nothing. If we tackle this issue, we could attract more investment, increase tax revenue, and protect public health,” he said.
The report identified poverty, unemployment, and rising living costs as key drivers of illicit alcohol consumption. Home-brewed spirits and wines are up to 81% cheaper than legal alternatives, making them more accessible to low-income consumers.
Benjamin Rideout, a consultant at Euromonitor, noted that low enforcement and porous borders enable the illicit trade. “Smuggled alcohol from Kenya and DR Congo enters through poorly controlled borders and Lake Victoria. Counterfeit products also flood the market, mimicking legal brands but evading taxes,” he explained.
Despite the risks, only 10% of consumers associate illicit alcohol with tax evasion or lost government revenue. Many are unaware of the dangers, including health risks from unregulated production.
Government Response: URA Steps Up Enforcement
Abel Kagumire, Commissioner of Executive Operations at Uganda Revenue Authority (URA), acknowledged the findings, stating that the tax body has formed a special task force to combat illicit trade in alcohol and tobacco.
“This report exposes major leakages. We’ve been collecting Shs 1 trillion from the alcohol sector, but with better enforcement, we could collect up to Shs 4 trillion,” Kagumire said.
Regional Hotspots for Illicit Alcohol
The report highlighted regions with the highest illicit alcohol consumption:
Buganda (26%)
West Nile (19%)
Lango (19%)
Teso (13%)
Busoga border areas (15%)
The UAIA is calling for public awareness campaigns to educate consumers on the dangers of illicit alcohol, not just to health but also to national development.
“If people understand how illicit alcohol reduces funding for schools, hospitals, and roads, they may reconsider their choices,” Njuki added.
With Uganda’s alcohol market reaching 1.7 million hectolitres in 2024—67.3% of which was illicit—stakeholders urge tighter regulations, better enforcement, and economic reforms to curb the booming black-market trade.
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