The Corporate Accountability and Public Participation Africa (CAPPA) is seeking an increase in tax on Sugar-Sweetened Beverages (SSBs) by not less than 20 per cent of the product’s retail price.
The CAPPA made its case recently during a programme on Effective SSB Tax and Industry Monitoring, in Lagos, suggesting that a raise from N10 per litre to N130 per litre will be better with the aim to correct market failure, address information asymmetry and trigger behavioral change among consumers and industry players.
The Federal Government had introduced an Excise Duty of N10 per litre on all carbonated SSBs through the 2021 Finance Act, implemented in June 2022, to curb the harmful effects of SSB consumption on Nigerians.
Reports have it that Nigeria has been ranked fourth globally in Sugar Sweetened Beverage (SSB) consumption, with an alarming 38.6 million liters sold annually. This has led to an upward trend in deaths linked to SSB consumption in the country.
The proposed tax aims to increase fiscal revenue and reduce the health burden associated with SSB consumption. With consumers becoming increasingly worse off due to the negative effects of SSBs, experts believe that a tax is necessary to correct this market failure.
In his address, the Executive Director of CAPPA, Akinbode Oluwafemi decried that over 11 million people are living with diabetes, adding that Nigeria is the fourth-largest soft drink consumer in the world.
The CAPPA boss said the N10 tax per litre introduced by the FG in the Finance Act of 2021 was not enough to discourage the high consumption of sugary drinks by Nigerians, as that is less than the worldwide suggested 20 per cent rise in SSB tax.
Oluwafemi expressed concern over Nigeria’s position as the fourth-largest consumer of soft drinks globally, warning that the high rates of obesity, diabetes, hypertension, and other cardiovascular diseases paint a worrying picture of our country’s health crisis.
He appealed to journalists to join in the campaign for an increase in the SSB tax, saying “it is essential to collaborate to ensure that our communities have access to accurate information, that policymakers are held accountable for national policy framework, and that public health remains a top priority in our communities and country.”
The Research Officer, Centre for the Study of the Economies of Africa (CSEA), Mr. Fidelis Obaniyi, in his paper titled “SSBs and Economic Impact on Household: Cost of Disease and Effective Taxation,” viewed that higher taxes on unhealthy products like SSBs would reduce their consumption and shift consumption towards healthier options, thereby reducing long-term healthcare costs.
Obaniyi identified excise tax aimed at reducing consumption of harmful products as one of effective SSB Tax.
He said: “It has been implemented by over 100 governments globally, including Mexico, California (USA), South Africa, Nigeria (tax of N10 per litre in 2021), etc., to combat health issues like obesity and diabetes and increase government revenue.
“Studies suggest that SSB taxes can effectively improve public health by reducing consumption, encouraging healthier beverage choices, and potentially generating revenue for health promotion initiatives.
“For instance, in South Africa, a 20 per cent tax on SSBs was predicted to avert 8,000 type 2 diabetes-related premature deaths over 20 years.
“A 20 per cent tax on SSBs was predicted to reduce obesity prevalence by more than 3 per cent in men and more than 2.0 per cent in women.
“We observe that the per capita consumption of SSBs is expected to decrease by 30 per cent for males and 9.0 per cent for females due to the tax induced increase in the retail price.”
He projected an annual decrease of 29 per cent for aggregate consumption of SSBs in Nigeria following a practical implementation of the SSB Tax.
To mitigate the economic and health impacts of unhealthy food, Nigeria should increase and enforce an SSB tax, promote public awareness about the health risks associated with SSB consumption, use tax revenues to support healthcare and disease prevention programs.
“The economic impacts of unhealthy food are profound, including direct healthcare costs and broader societal implications.
“An SSB tax is a viable policy intervention that can improve public health, reduce healthcare costs, and generate revenue for further health initiatives.
“While the tax of N10 per litre on SSB in Nigeria is a good beginning, the tax rate must be improved to have a significant fiscal and health impact,” Obaniyi said.
The SSB Tax Project Officer, CAPPA, Ms. Opeyemi Ibitoye, said: “Global recommendation on SSB Tax is at least 20 per cent increase in the final retail price in order to significantly reduce habitual consumption.
“What we are saying is that government should focus on health on health and not on commercial profits.”
A Public Health Consultant, University College Hospital, University of Ibadan, Dr. Francis Fagbule, in his paper titled “Sugar-sweetened Beverages and Non-Communicable Diseases Burden in Nigeria,” emphasised preventive measures because of the expensive nature of managing and curing non-communicable diseases.
Fagbule said: “A group of conditions that are not mainly caused by an acute infection, result in long-term health consequences and often create a need for long-term treatment and care.
“Evidence shows a growing burden of NCDs facing Nigerians.”
Ms Joke Kujenya the Executive-in-Charge, Media Mentors Journalism Centre, collaborated other speakers who harped on the need to highlight the risks of SSB consumption.