In a recent statement, the Centre for the Promotion of Private Enterprise (CPPE) cautioned that Nigeria is not ready for a sugar-specific tax on sugar-sweetened beverages, arguing that such a measure could harm the economy rather than help public health.
The CPPE’s Chief Executive Officer, Dr. Muda Yusuf, stressed that although rising cases of diabetes and cardiovascular diseases deserve urgent attention, a sugar tax is misplaced, economically risky, and weakly supported by empirical evidence. He argued that pushing a sugar tax based on global policy templates fails to reflect Nigeria’s unique macroeconomic and structural challenges.
Nigeria’s food and beverage industry, particularly the non-alcoholic beverage segment, forms a vital part of the manufacturing sector. According to Yusuf, data from Nigeria’s National Bureau of Statistics show that this sector contributes roughly 40 per cent of total manufacturing output. It also sustains a broad value chain, from farmers and processors to transporters and retailers, supporting millions of livelihoods countrywide.
The CPPE warns that increasing the fiscal burden on this already pressured sector could lead to significant job losses, reduced household incomes, and lower investment, which would undermine poverty-reduction efforts. Manufacturers of non-alcoholic beverages, Yusuf noted, are already among the most heavily taxed businesses in Nigeria. Their current obligations include a 30 per cent company income tax, 7.5 per cent value-added tax (VAT), a ₦10 per litre excise duty, development levies, import duties, and multiple state and local government charges.
These fiscal pressures are exacerbated by Nigeria’s broader operating environment challenges: high energy costs, costly logistics, volatile exchange rates, and elevated interest rates, which collectively increase production costs, shrink profit margins, and deter investment. Retail prices of many non-alcoholic beverages, CPPE highlights, have already risen by about 50 per cent over the past two years without any new sugar tax.
On public health outcomes, CPPE argues that evidence shows sugar taxes deliver limited benefits unless paired with broader, sustained interventions. It notes that rising instances of diabetes in Nigeria stem more from poor overall diets, inactivity, urban design issues, and genetic factors than sugar consumption alone.
Instead of punitive taxation, the think tank recommends alternatives such as lifestyle and nutrition education, community health awareness campaigns, promotion of physical activity, encouragement of fruit and vegetable consumption, healthy food subsidies, and urban planning that supports active living. Yusuf insisted that “public health objectives and economic growth are not mutually exclusive,” and that balanced, development-focused policymaking is needed rather than additional fiscal pressure on a manufacturing pillar.
Across Nigeria’s policy debate, critics of a sugar tax echo some of CPPE’s concerns. For example, other commentators have warned that past increases in excise duties on sugar-sweetened beverages risk destabilising the beverage sector and increasing unemployment if not carefully aligned with economic realities.
Economists point out that broadening Nigeria’s tax base through new levies like a sugar tax could temporarily raise government revenue, but could simultaneously dampen industrial output, reduce foreign investment, and weaken consumer demand, slowing economic growth. Balancing revenue generation with economic competitiveness remains a key fiscal policy challenge for Nigeria.
