CPPE Warns Nigerian Govt Against Proposed Tax on Coke, Fanta, Other Soft Drinks
- CPPE has cautioned against imposing additional taxes on sugar-sweetened beverages in Nigeria
- The organisation says sugar taxes alone do not effectively address the root causes of diabetes
- CPPE argues that the beverage sector is vital to manufacturing output and employment
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The Centre for the Promotion of Private Enterprise (CPPE) has advised the federal government and policymakers against implementing a proposed tax on soft drinks and sugary beverages.
Source: UGC
The economic think tank urged the government to focus on health-based interventions rather than introducing additional taxes on sugar-sweetened beverages, warning that such a move could harm Nigeria’s manufacturing sector and jobs, PUNCH reported.
Sugar taxes not solely beneficial to public health
The Chief Executive Officer of CPPE, Dr Muda Yusuf, said evidence showed that sugar taxes produced limited public health benefits when implemented without broader lifestyle and behavioural reforms.
According to the organisation, the main drivers of diabetes and related non-communicable diseases in Nigeria include poor diet quality, physical inactivity, sedentary lifestyles, urban planning challenges and genetic factors.
Yusuf argued that while taxation could slightly affect consumption, it failed to tackle these underlying causes. He added that the economic consequences of imposing new taxes would be immediate and potentially severe, especially for manufacturers and workers.
“While taxation may marginally influence consumption patterns, it does not address these root causes,” Yusuf said.
CPPE urges govt to improve nutrition education
Instead of additional taxation, the CPPE urged the government to prioritise lifestyle and nutrition education, community health awareness programmes, promotion of physical activity, increased consumption of fruits and vegetables, healthy food subsidies, and urban designs that encourage walking and cycling.
The organisation said these measures would directly address health challenges without weakening what it described as a critical pillar of Nigeria’s manufacturing and employment base.
Dr Yusuf also criticised recent calls for higher taxes on sugar-sweetened non-alcoholic beverages, describing the proposal as economically risky and weakly supported by empirical evidence.
While acknowledging the need to address rising cases of diabetes and cardiovascular diseases, he said sugar taxation did not reflect Nigeria’s current economic realities, particularly at a time of high inflation, reduced purchasing power and fragile industrial recovery.
Advocacy for sugar taxes externally influenced
He further noted that advocacy for sugar taxes in Nigeria was often influenced by externally developed policy models, adding that global experience did not support sugar taxation as a sustainable or standalone solution to non-communicable diseases in developing economies.
The CPPE stressed that the food and beverage sector remained central to Nigeria’s manufacturing industry. Citing data from the National Bureau of Statistics, it said the sector accounted for about 40% of total manufacturing output, with non-alcoholic beverages playing a significant role in industrial growth, employment and value creation.
According to the organisation, the sector supports a wide value chain involving farmers, input suppliers, processors, packaging firms, logistics operators, wholesalers, retailers and the hospitality industry, sustaining millions of livelihoods nationwide.
Source: Getty Images
Sugar tax could lead to job losses
It warned that policies that weaken the sector could lead to job losses, reduced household incomes, lower investment levels and setbacks in poverty reduction efforts.
The CPPE also pointed out that beverage manufacturers already face multiple taxes and levies, including Company Income Tax, Value Added Tax, excise duties, development levies, import duties and various state and local government charges.
Yusuf added that these tax obligations were compounded by high energy and logistics costs, exchange rate volatility and rising interest rates, contributing to higher production costs and consumer prices.
He noted that retail prices of many non-alcoholic beverages had increased by about 50% over the past two years, even without the introduction of new sugar-related taxes.
The organisation concluded that Nigeria’s economy was still in a delicate recovery phase, cautioning that introducing sugar-specific taxes at this time could reverse industrial gains and weaken employment. It called for balanced policies that support both public health goals and economic growth.
Manufacturers warn of job losses
Legit.ng earlier reported that the Manufacturers Association of Nigeria (MAN) had equally warned the federal government against going ahead with the sugar tax, warning that it would lead to massive job losses in the manufacturing sector.
The manufacturers presented their argument on the issue during a public hearing organised by the Senate Committees on Finance and Customs.
Meanwhile, the Federal Ministry of Health supported the amendment, saying it aligns with public health goals and provides sustainable financing
Source: Legit.ng
