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, saying that additional taxes on the consumers will be detrimental to the nation’s economy in the medium and long terms.
The organized private sector advocacy group, in its Policy Note issued on Wednesday and signed by the Director/Chief Executive Officer, Dr. Muda Yusuf, pointed out that while public health challenges such as diabetes and cardiovascular diseases undoubtedly warranted urgent attention, the proposition of a sugar-specific tax is misplaced, economically risky, and weakly supported by empirical evidence.
The Centre maintained that more importantly, it the fiscal proposal was not adequately contextualised within Nigeria’s prevailing structural, social, and macroeconomic realities.
According to the CPPE, advocacy for sugar taxation in Nigeria is largely driven by externally derived policy templates, particularly those associated with global health institutions.
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It added that, however, global best practice didn’t support sugar taxation as a sustainable or standalone solution to non-communicable diseases, especially in economies characterized by high inflation, weak purchasing power, fragile industrial recovery, and widespread poverty, such as Nigeria.
Describing the food and beverage sector as the backbone of the nation’s real sector, the OPS group stated that the food and beverage industry remained the largest and most dynamic segment of the manufacturing sector, with the non-alcoholic beverages sub-sector playing a particularly significant role.
The Centre buttressed its claims with data from the National Bureau of Statistics, which indicated that the food and beverage industry contributes approximately 40 percent of total manufacturing output, making it a critical driver of industrial growth, employment, and value creation.
It further pointed out that beyond factory-level operations, the sector had been sustaining 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.
The OPS advocacy group warned that any policy that undermines this sector would result in wide-ranging negative economic consequences, including job losses, declining household incomes, reduced investment, and setbacks to poverty-reduction efforts.
On the current level of tax burdens on manufacturers in the food and beverages industry, the CPPE noted that they were among the most heavily taxed and cost-pressured businesses in the Nigerian economy.
It listed some of the existing fiscal obligations on them as including 30% Company Income Tax; 7.5% Value-Added Tax (VAT); N10 per litre Excise Duty; 4% National Development Levy on assessable profits; 4% FOB levy on imported inputs; Import duties of 5–15% on intermediate raw materials; 0.5% ECOWAS levy; Property taxes at sub-national levels; and Multiple state and local government levies
The CPPE further clarified: “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. 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 percent over the past two years, significantly eroding affordability even in the absence of any new tax measures.
“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 and sedentary lifestyles, urban design that discourages walking and cycling, and genetic and hereditary factors
“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”, it added.
The frontline OPS advocacy group urged policymakers, as a more sustainable path to public health services delivery, to prioritise evidence-based, inclusive, and development-friendly alternatives, including lifestyle and nutrition education, community-based health awareness programmes, promotion of physical activity and exercise, encouragement of fruit and vegetable consumption, healthy food subsidies rather than punitive taxation, and urban planning that supports walking, cycling, and active transportation
It maintained that these measures would 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 its conclusive remarks, the CPPE stressed: “Nigeria’s economy remains in a delicate recovery phase. 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.
“Public health objectives and economic growth are not mutually exclusive. 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”, it added.
