The Centre for the Promotion of Private Enterprises (CPPE) has raised concerns that the proposed sugar tax on sugar-sweetened non-alcoholic beverages could seriously impact Nigeria’s manufacturing sector, employment, and overall economic recovery. CPPE’s Chief Executive Officer, Muda Yusuf, emphasized that while public health concerns like diabetes are real, a sugar-specific tax may not suit the country’s current economic conditions.
Yusuf explained that implementing such a tax would be economically risky and poorly contextualized within Nigeria’s unique structural and macroeconomic environment. “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,” he said. He further noted that sugar tax advocacy in Nigeria often follows global policy templates, which may not be practical for a developing economy.
Highlighting the importance of the food and beverage industry, Yusuf pointed out that it accounts for around 40% of total manufacturing output in Nigeria. The non-alcoholic beverages sub-sector, in particular, plays a critical role in creating jobs, generating value, and supporting industrial growth. He stressed that any policy weakening the sector could result in job losses, reduced household incomes, and slower poverty-reduction efforts.
Yusuf also drew attention to the heavy tax burden already faced by beverage manufacturers. Businesses in the sector must navigate multiple fiscal obligations, including 30% company income tax, 7.5% VAT, excise duties, development levies, import duties, and various state and local government charges. These costs, combined with high energy expenses, logistics challenges, exchange-rate volatility, and elevated interest rates, have already raised production costs and consumer prices.
The CPPE CEO warned that retail prices for many non-alcoholic beverages have surged by about 50% over the past two years even without a sugar-specific tax. He concluded that introducing an additional levy could exacerbate economic strain, reduce investment appetite, and negatively affect millions of livelihoods across Nigeria’s extensive value chain—from farmers and processors to distributors and retailers.
source: dailytrust