The Centre for the Promotion of Private Enterprise (CPPE) has raised serious concerns over renewed calls for the imposition of additional taxes on sugar-sweetened non-alcoholic beverages in Nigeria.
The warning was contained in a policy brief made available to Naijaonpoint on Wednesday.
CPPE warned that such a move could carry significant economic risks while delivering limited public health benefits.
While acknowledging the growing burden of non-communicable diseases such as diabetes and cardiovascular ailments, the policy advocacy group said a sugar-specific tax is misplaced, weakly supported by empirical evidence, and poorly aligned with Nigeria’s structural and macroeconomic realities.
CPPE noted that advocacy for sugar taxation in Nigeria is largely influenced by externally derived policy frameworks, particularly from global health institutions, without sufficient adaptation to local conditions.
According to the group, “global best practice does not support sugar taxation as a standalone or sustainable solution to non-communicable diseases, especially in economies grappling with high inflation, weak purchasing power, fragile industrial recovery, and widespread poverty, such as Nigeria”.
The organisation emphasised that Nigeria’s food and beverage industry remains the largest and most vibrant segment of the manufacturing sector, with the non-alcoholic beverages sub-sector playing a pivotal role.
Data from the National Bureau of Statistics (NBS) indicate that the food and beverage industry accounts for about 40 per cent of total manufacturing output, making it a critical driver of industrial growth, employment, and value creation.
Beyond factory operations, CPPE said the sector supports an extensive value chain involving farmers, agro-input suppliers, processors, packaging firms, logistics operators, wholesalers, retailers, and the hospitality industry—collectively sustaining millions of livelihoods nationwide.
CPPE warned that manufacturers of non-alcoholic beverages are already among the most heavily taxed and cost-burdened businesses in the Nigerian economy.
Existing fiscal obligations include 30 per cent Company Income Tax, 7.5 per cent Value-Added Tax, N10 per litre excise duty, a 4% National Development Levy, 4% FOB levy on imported inputs, import duties of 5–15% on intermediate raw materials, a 0.5% ECOWAS levy, as well as multiple state and local government taxes.
These obligations, the group said, are compounded by high energy costs, expensive logistics, exchange-rate volatility, and elevated interest rates, resulting in rising production costs, shrinking margins, subdued investment, and higher consumer prices.
CPPE noted that retail prices of many non-alcoholic beverages have already risen by about 50% over the past two years, significantly reducing affordability even without new taxes.
According to CPPE, available evidence suggests that sugar taxes generate limited public health gains unless implemented as part of broader, long-term lifestyle and behavioural interventions.
The group identified the main drivers of diabetes and related conditions in Nigeria as poor diet quality, physical inactivity, sedentary lifestyles, urban design that discourages active movement, and genetic factors.
While taxation may marginally affect consumption patterns, CPPE argued that it does not address these root causes, while the economic costs—higher prices, reduced demand, job losses, and weakened industrial investment—are immediate and substantial.
While taxation may marginally affect consumption patterns, CPPE argued that it does not address these root causes, while the economic costs—higher prices, reduced demand, job losses, and weakened industrial investment—are immediate and substantial.
Instead of additional taxation, CPPE urged policymakers to adopt evidence-based and development-friendly alternatives, including lifestyle and nutrition education, community health awareness programmes, promotion of physical activity, increased consumption of fruits and vegetables, healthy food subsidies, and urban planning that supports walking and cycling.
The group said such measures would address the underlying causes of non-communicable diseases without undermining a critical pillar of Nigeria’s manufacturing and employment base.
CPPE cautioned that Nigeria’s economy remains in a delicate recovery phase, warning that the introduction of sugar-specific taxes could reverse recent industrial gains and undermine ongoing manufacturing-friendly fiscal reforms.
According to the organisation, public health objectives and economic growth are not mutually exclusive, stressing the need for balanced, holistic, and context-sensitive policymaking rather than additional fiscal pressure on a key manufacturing sector.
Earlier this month, CPPE warned that Nigeria’s ongoing tax reform drive could undermine the informal sector if it is not carefully designed and properly sequenced.
The warning comes amid broader efforts by the government to expand the tax net, raise revenue, and strengthen compliance across the economy.