- Says Sector Already Grappling With An Over-Burdened Industry
The Centre for the Promotion of Private Enterprise (CPPE) has raised the alarm over renewed calls for additional taxes on sugar-sweetened non-alcoholic beverages in Nigeria, warning that such a move could cripple the country’s manufacturing backbone.
While acknowledging the seriousness of public health challenges like diabetes and cardiovascular diseases, CPPE insists that a sugar-specific tax is “misplaced, economically risky, and weakly supported by empirical evidence.” Dr. Muda Yusuf, Chief Executive Officer of the organisation, stressed that the proposal fails to account for Nigeria’s “prevailing structural, social, and macroeconomic realities.”
According to CPPE, the push for sugar taxation is largely driven by external policy templates promoted by global health institutions. But Yusuf argued that “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.”
Nigeria’s food and beverage industry, which contributes about 40 percent of total manufacturing output, is described as the “largest and most dynamic segment of the manufacturing sector.”
The non-alcoholic beverages sub-sector alone sustains millions of livelihoods across a vast value chain that includes farmers, processors, packaging companies, logistics providers, retailers, and the hospitality industry.
“Any policy that undermines this sector carries wide-ranging economic consequences—job losses, declining household incomes, reduced investment, and setbacks to poverty-reduction efforts,” Yusuf warned.
Manufacturers in the sector are already grappling with what CPPE calls “an overburdened industry.”
It noted that current fiscal obligations include a 30 percent company income tax, 7.5 percent VAT, ₦10 per litre excise duty, multiple levies, and import duties ranging from 5 to 15 percent.
“These pressures are compounded by high energy costs, volatile exchange rates, and prohibitive logistics expenses. Retail prices of many beverages have surged by nearly 50 percent in just two years, eroding affordability even before any new tax measures”.
On the health front, CPPE argues that sugar taxes deliver “limited public health benefits” unless integrated into broader lifestyle and structural interventions.
The organisation points to poor diet quality, sedentary lifestyles, urban designs that discourage physical activity, and genetic factors as the real drivers of Nigeria’s rising diabetes rates.
“Taxation may marginally influence consumption patterns, but it does not address these root causes,” Yusuf said.
Instead, CPPE urged policymakers to pursue more sustainable alternatives: nutrition education, community-based health awareness, promotion of exercise, subsidies for healthy foods, and urban planning that encourages walking and cycling.
“Public health objectives and economic growth are not mutually exclusive,” Yusuf emphasised. “Nigeria requires balanced, holistic, and development-conscious policymaking, not additional fiscal pressure on one of the most important segments of the manufacturing sector.”
