Sugar tax harmful to manufacturing sector –CPPE

Sugar tax harmful to manufacturing sector –CPPE

 The Centre for the Promotion of Private Enterprise (CPPE) has expressed strong concerns over proposals to introduce additional taxes on sugar-sweetened non-alcoholic beverages (SSBs) in Nigeria. While recognizing the importance of addressing public health challenges such as diabetes and cardiovascular diseases, CPPE argued that a sugar-specific tax is economically risky, poorly supported by evidence, and largely influenced by externally developed policy templates that do not reflect Nigeria’s unique economic realities.

The centre warned that introducing such taxes could undermine Nigeria’s fragile economic recovery, weaken employment, and reverse gains in the manufacturing sector. Non-alcoholic beverage producers, already heavily taxed through multiple fiscal obligations and burdened by high energy costs, logistics challenges, exchange-rate volatility, and elevated interest rates, would face further strain, leading to higher production costs, shrinking profits, reduced investment, and rising consumer prices. Retail prices of these beverages have already increased by about 50% in the past two years.

Highlighting the strategic role of the food and beverage industry—which accounts for roughly 40% of total manufacturing output—CPPE emphasized its extensive value chain, supporting farmers, suppliers, processors, logistics providers, traders, and the hospitality sector, and sustaining millions of livelihoods. The centre cautioned that policies harming the sector could trigger job losses, lower household incomes, and hinder poverty reduction efforts.

On public health, CPPE noted that sugar taxes alone are unlikely to significantly curb non-communicable diseases, pointing instead to poor diet quality, physical inactivity, urban design limitations, and genetic factors as key drivers. The centre recommended more holistic, evidence-based measures such as lifestyle and nutrition education, community health programs, promotion of physical activity, subsidies for healthy foods, and urban planning that encourages active transport. These approaches, CPPE argued, would better address health challenges while preserving a vital component of Nigeria’s economy and employment.