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By Merit Ibe
The Centre for the Promotion of Private Enterprise (CPPE) has raised concerns over renewed calls for additional taxes on sugar-sweetened non-alcoholic beverages (SSBs) in Nigeria, warning that such a move would be detrimental to the manufacturing sector and the broader economy.
While acknowledging the need to address rising public health challenges such as diabetes and cardiovascular diseases, the centre argued that a sugar-specific tax is misguided, economically risky, and weakly supported by empirical evidence.
According to CPPE, the push for sugar taxation in Nigeria is largely driven by externally developed policy templates, particularly from global health institutions, which do not adequately reflect local economic realities.
The centre noted that global best practice does not support sugar taxation as a sustainable or standalone solution to non-communicable diseases, especially in economies like Nigeria that are grappling with high inflation, weak purchasing power, fragile industrial recovery, and widespread poverty.
CPPE stressed that Nigeria’s economy remains in a delicate recovery phase, warning that introducing additional sugar-specific taxes could reverse recent industrial gains, weaken employment, and undermine ongoing manufacturing-friendly fiscal reforms.
“Public health objectives and economic growth are not mutually exclusive.
“What Nigeria needs is balanced, holistic and development-conscious policymaking, not additional fiscal pressure on one of the most critical segments of the manufacturing sector,” the centre stated.
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It emphasised that non-alcoholic beverage manufacturers are already among the most heavily taxed businesses in the country, facing multiple fiscal obligations including 30 per cent Company Income Tax, 7.5 per cent Value-Added Tax, N10 per litre excise duty, a 4 per cent National Development Levy, a 4 per cent FOB levy on imported inputs, import duties of 5–15 per cent on raw materials, a 0.5 per cent ECOWAS levy, as well as various property, state and local government taxes.
These burdens, CPPE noted, are further compounded by high energy and logistics costs, exchange-rate volatility, and elevated interest rates, resulting in rising production costs, shrinking profit margins, reduced investment appetite, and higher consumer prices. It added that retail prices of many non-alcoholic beverages have already risen by about 50 per cent over the past two years, significantly reducing affordability even without new taxes.
The centre highlighted the strategic importance of the food and beverage industry, which accounts for about 40 per cent of total manufacturing output, according to the National Bureau of Statistics. It noted that the non-alcoholic beverages sub-sector supports a vast value chain involving farmers, input suppliers, processors, packaging firms, logistics providers, traders and the hospitality industry, sustaining millions of livelihoods nationwide.
CPPE warned that policies that undermine the sector could lead to job losses, declining household incomes, reduced investment, and setbacks to poverty-reduction efforts.
On public health, the centre argued that evidence shows sugar taxes yield limited benefits unless combined with broader lifestyle and structural interventions. It identified poor diet quality, physical inactivity, sedentary lifestyles, urban design constraints, and genetic factors as the primary drivers of diabetes and related diseases in Nigeria.
While taxation may slightly influence consumption, CPPE said it does not address these root causes, whereas the economic costs, higher prices, reduced demand, job losses and weaker investment, are immediate and potentially severe.
The centre urged policymakers to adopt evidence-based and development-friendly alternatives, including lifestyle and nutrition education, community health awareness programmes, promotion of physical activity, encouragement of fruit and vegetable consumption, healthy food subsidies, and urban planning that supports active transportation.
According to CPPE, such measures would better tackle non-communicable diseases while preserving a critical pillar of Nigeria’s manufacturing and employment base.
