The Centre for the Promotion of Private Enterprise (CPPE) has expressed serious concern over what it described as renewed calls in some quarters for the imposition of additional taxes on sugar-sweetened non-alcoholic beverages in Nigeria.
Nigeria has just introduced a new set of tax laws, which is currently facing pushback from citizens who believe the new regime will worsen their tax burden.
The Centre noted that while public health challenges such as diabetes and cardiovascular diseases undoubtedly warrant urgent attention, the proposition of a sugar-specific tax is misplaced, economically risky, and weakly supported by empirical evidence.
CPPE, in a statement on Wednesday signed by its Chief Executive Officer, Dr. Muda Yusuf, said Nigeria’s economy remains in a delicate recovery phase. It noted that advocacy for sugar taxation in Nigeria is largely driven by externally derived policy templates, particularly those associated with global health institutions.
“However, global best practice does not support sugar taxation as a sustainable or standalone solution to non-communicable diseases—especially in economies characterised by high inflation, weak purchasing power, fragile industrial recovery, and widespread poverty, such as Nigeria,” it said, adding that it is not adequately contextualised within Nigeria’s prevailing structural, social, and macroeconomic realities.
The Centre said Nigeria’s food and beverage industry remains the largest and most dynamic segment of the manufacturing sector, with the non-alcoholic beverages sub-sector playing a particularly significant role.
“Data from the National Bureau of Statistics indicate that the food and beverage industry contributes approximately 40 per cent of total manufacturing output, making it a critical driver of industrial growth, employment, and value creation. Beyond factory-level operations, the sector sustains an extensive value chain that spans farmers, agro-input suppliers, processors, packaging companies, logistics providers, wholesalers, retailers, and the hospitality industry. Collectively, these activities support millions of livelihoods nationwide. Any policy that undermines this sector therefore carries wide-ranging economic consequences, including job losses, declining household incomes, reduced investment, and setbacks to poverty-reduction efforts.”
CPPE noted that manufacturers of non-alcoholic beverages are among the most heavily taxed and cost-pressured businesses in the Nigerian economy.
“These fiscal pressures are further compounded by Nigeria’s challenging operating environment, including high energy costs, prohibitive logistics expenses, exchange-rate volatility, and elevated interest rates,” it noted, adding,
“The cumulative effect has been rising production costs, shrinking margins, subdued investment appetite, and higher consumer prices.
Notably, retail prices of many non-alcoholic beverages have already increased by approximately 50 per cent over the past two years, significantly eroding affordability even in the absence of any new tax measures.”
CPPE said the new tax regime will only achieve limited public health gains at high economic costs.
“Available evidence suggests that sugar taxes deliver limited public health benefits unless embedded within broader, long-term lifestyle, behavioural, and structural interventions.
In Nigeria, the rising incidence of diabetes and related non-communicable diseases is driven primarily by poor overall diet quality, particularly carbohydrate-heavy meals, physical inactivity, sedentary lifestyles, and urban design that discourages walking and cycling. While taxation may marginally influence consumption patterns, it does not address these root causes.
Conversely, the economic costs of additional taxation—higher consumer prices, reduced demand, job losses, and weakened industrial investment—are immediate, tangible, and potentially severe.”
Rather than introducing a new tax, CPPE urged policymakers to prioritise evidence-based, inclusive, and development-friendly alternatives.
“Introducing additional sugar-specific taxes at this time risks reversing recent industrial gains, weakening employment outcomes, and undermining the objectives of ongoing manufacturing-friendly fiscal reforms,” it observed.
While insisting that public health objectives and economic growth are not mutually exclusive, the Centre said what Nigeria requires is balanced, holistic, and development-conscious policymaking, rather than additional fiscal pressure on one of the most important segments of the manufacturing sector.
