The Centre for the Promotion of Private Enterprise (CPPE) has expressed serious concern over renewed calls in some quarters for the imposition of additional taxes on sugar-sweetened non-alcoholic beverages in Nigeria, warning that such a policy would be economically damaging, poorly targeted, and misaligned with the country’s current realities.
CPPE acknowledges that public health challenges such as diabetes and cardiovascular diseases require urgent and sustained attention. However, the organisation maintains that the introduction of a sugar-specific tax is a misplaced response that carries significant economic risks while offering limited public health benefits. The proposal, CPPE notes, is weakly supported by empirical evidence and fails to adequately reflect Nigeria’s prevailing structural, social, and macroeconomic conditions.
According to the Chief Executive Officer of CPPE, Dr. Muda Yusuf, advocacy for sugar taxation in Nigeria is largely driven by externally derived policy templates, particularly those promoted by global health institutions. While such approaches may appear attractive on paper, global best practice does not support sugar taxation as a sustainable or standalone solution to non-communicable diseases—especially in economies like Nigeria’s, which are characterised by high inflation, weak purchasing power, fragile industrial recovery, and widespread poverty.
The organisation emphasised that 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 show 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 operations, the sector supports an extensive value chain that includes farmers, agro-input suppliers, processors, packaging companies, logistics providers, wholesalers, retailers, and the hospitality industry. Collectively, these interconnected activities sustain millions of livelihoods across the country. CPPE warned that any policy that undermines this sector would have far-reaching consequences, including job losses, declining household incomes, reduced investment, and setbacks to poverty-reduction efforts.
CPPE further noted that manufacturers of non-alcoholic beverages are already among the most heavily taxed and cost-pressured businesses in the Nigerian economy. Existing fiscal obligations include a 30 per cent Company Income Tax, 7.5 per cent Value-Added Tax, a ₦10 per litre excise duty, a 4 per cent National Development Levy on assessable profits, a 4 per cent FOB levy on imported inputs, import duties of between 5 and 15 per cent on intermediate raw materials, a 0.5 per cent ECOWAS levy, property taxes at sub-national levels, as well as multiple state and local government levies.
These fiscal burdens are further compounded by Nigeria’s challenging operating environment, including high energy costs, prohibitive logistics expenses, exchange-rate volatility, and elevated interest rates. The cumulative effect has been rising production costs, shrinking profit margins, subdued investment appetite, and higher consumer prices. CPPE highlighted that retail prices of many non-alcoholic beverages have already increased by approximately 50 per cent over the past two years, significantly eroding affordability even without the introduction of any new taxes.
From a public health perspective, CPPE argued that available evidence suggests sugar taxes deliver limited benefits unless they are 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 and sedentary lifestyles, urban designs that discourage walking and cycling, as well as genetic and hereditary factors.
While taxation may marginally influence consumption patterns, CPPE stressed that it does not address these root causes. In contrast, the economic costs of additional taxation—higher consumer prices, reduced demand, job losses, and weakened industrial investment—are immediate, tangible, and potentially severe.
The Centre therefore urged policymakers to adopt more sustainable, evidence-based, and development-friendly approaches to improving public health outcomes. These include intensified lifestyle and nutrition education, community-based health awareness programmes, promotion of physical activity and exercise, encouragement of fruit and vegetable consumption, the use of healthy food subsidies rather than punitive taxation, and urban planning that supports walking, cycling, and other forms of active transportation.
According to CPPE, such measures directly address the underlying drivers of diabetes and cardiovascular diseases, deliver broader social benefits, and avoid undermining a critical pillar of Nigeria’s manufacturing and employment base.
In conclusion, CPPE cautioned that Nigeria’s economy remains in a delicate recovery phase, and 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. The Centre reiterated that public health objectives and economic growth are not mutually exclusive, and called for balanced, holistic, and development-conscious policymaking rather than additional fiscal pressure on one of the most important segments of the manufacturing sector.
