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The Centre for the Promotion of Private Enterprise (CPPE) has cautioned policymakers against renewed calls for the introduction of additional taxes on sugar sweetened non alcoholic beverages, warning that such measures could undermine Nigeria’s manufacturing sustainability and weaken the country’s already fragile economic recovery.
CPPE’s Chief Executive Officer, Dr Muda Yusuf, described proposals for a sugar specific tax as economically risky, poorly contextualised and weakly supported by empirical evidence, particularly within the realities of Nigeria’s current macroeconomic environment. While acknowledging the urgency of addressing rising cases of diabetes and cardiovascular diseases, Yusuf stressed that taxation alone is neither a sustainable nor effective solution to Nigeria’s public health challenges.
According to him, advocacy for sugar taxation in Nigeria is largely influenced by externally driven policy models associated with global health institutions, without sufficient adaptation to local economic and social conditions. He noted that international experience shows sugar taxes are most effective only when embedded within broader, multi layered health and lifestyle interventions an approach that remains underdeveloped in Nigeria.
Yusuf highlighted the food and beverage industry as a cornerstone of Nigeria’s manufacturing ecosystem, with the non alcoholic beverages segment playing a particularly strategic role in industrial output, employment generation and value creation. Data from the National Bureau of Statistics indicates that the sector contributes nearly 40 per cent of total manufacturing output, supporting millions of livelihoods across agriculture, logistics, retail and hospitality value chains.
He warned that imposing additional fiscal burdens on the sector could trigger widespread job losses, reduce household incomes, discourage investment and ultimately reverse gains in poverty reduction and inclusive growth. From a sustainability standpoint, such outcomes would weaken the resilience of local industries, disrupt supply chains and exacerbate social vulnerabilities.
The CPPE further noted that manufacturers in the non-alcoholic beverage segment are already operating under intense fiscal and structural pressure. Beyond company income tax, value-added tax and excise duties, firms face multiple levies at federal, state and local government levels.
These are compounded by high energy costs, rising logistics expenses, exchange rate volatility and elevated interest rates, all of which have driven up production costs and eroded profit margins.
Yusuf disclosed that retail prices of many non-alcoholic beverages have risen by about 50 per cent over the past two years, even in the absence of any new sugar related taxes. Introducing additional levies, he argued, would further increase consumer prices, reduce affordability and strain household budgets particularly for low-income earners.
On public health outcomes, CPPE maintained that sugar taxes deliver limited benefits when implemented in isolation.
Yusuf identified poor diet quality, physical inactivity, sedentary lifestyles, urban planning deficiencies and genetic factors as the primary drivers of non communicable diseases in Nigeria. While taxation may slightly influence consumption patterns, it does not address these root causes and risks imposing immediate and significant economic costs.
Instead, the organisation urged the government to pursue more sustainable, development oriented solutions that balance health objectives with economic resilience. These include expanded nutrition and lifestyle education, community based health initiatives, promotion of physical activity, incentives for healthier food choices, subsidies for fruits and vegetables, and urban planning policies that encourage active transportation.
According to CPPE, such integrated approaches would deliver more durable public health outcomes while supporting industrial sustainability, job creation and long-term economic stability key pillars of Nigeria’s broader sustainable development agenda.