Introduction of sugar tax on sugar-sweetened non-alcoholic drinks could hurt the country’s manufacturing sector, threaten jobs, and slow the country’s economic recovery, stated the Centre for the Promotion of Private Enterprise (CPPE), reports Business Day.
CPPE raised concerns over the renewed calls for extra taxes on sugary drinks.
CPPE released a statement on Wednesday in which Chief Executive Officer Muda Yusuf said the proposal does not align with Nigeria’s present economic situation.
Yusuf recognised the rising health challenges linked to diabetes and other long-term diseases but argued that a sugar-focused tax would be economically risky, poorly supported by evidence, and out of touch with Nigeria’s social and economic conditions. He said while public health issues require serious attention, singling out sugar through taxation is unlikely to deliver the desired results.
He said advocacy for sugar taxes in Nigeria is largely influenced by policies adopted abroad, adding that global experience shows such measures are not a lasting or stand-alone solution to public health problems, particularly in developing economies.
The CPPE chief described the food and beverage industry as a core part of Nigeria’s manufacturing sector, citing National Bureau of Statistics data showing it accounts for about 40 per cent of total manufacturing output. He noted that the non-alcoholic beverages segment plays a key role in job creation, value addition, and industrial growth.
According to Yusuf, the industry supports a wide value chain that includes farmers, suppliers of agricultural inputs, processors, packaging firms, transporters, distributors, retailers, and hospitality businesses, sustaining millions of livelihoods nationwide.
He warned that any policy that weakens the sector could result in job losses, falling household incomes, reduced investment, and setbacks to poverty reduction efforts.
Yusuf also pointed out that beverage manufacturers already face heavy tax burdens, including company income tax, value-added tax, excise duties, development levies, import duties, and numerous state and local government charges.
He said these pressures are made worse by high energy costs, expensive logistics, unstable exchange rates, and high interest rates, leading to rising production costs, shrinking profit margins, weaker investment appetite, and higher prices for consumers.
The CPPE chief disclosed that prices of many non-alcoholic beverages have risen by about 50 per cent over the past two years, even without the introduction of a new sugar-related tax.
On public health, Yusuf said evidence suggests sugar taxes bring limited benefits unless combined with broader and long-term lifestyle changes. He noted that the increase in diabetes cases in Nigeria is driven more by poor overall diets, physical inactivity, sedentary lifestyles, urban design challenges, and genetic factors than by sugar consumption alone.
He urged the government to focus on more sustainable public health measures, including nutrition and lifestyle education, community health awareness programmes, promotion of physical activity, encouragement of fruit and vegetable intake, support for healthy food options, and urban planning that promotes walking and cycling.
Yusuf said such steps would address the root causes of non-communicable diseases without harming a key pillar of Nigeria’s manufacturing and employment base, adding that public health goals and economic growth should be pursued together through balanced and evidence-based policies.
