Sugar Beverage Tax May Disrupt Industrial Value Chains, Says CPPE

The Centre for the Promotion of Private Enterprise (CPPE) has urged the House of Representatives to reject the proposed Sugar-Sweetened Beverage (SSB) Tax Bill, warning that the legislation could undermine Nigeria’s manufacturing sector, disrupt industrial value chains, threaten jobs and weaken investor confidence.

The Chief Executive Officer of CPPE, Dr. Muda Yusuf, expressed concern over the Senate’s passage of the bill despite what he described as widespread opposition from private sector stakeholders, particularly manufacturers.

According to Yusuf, the proposed tax comes at a period when businesses are grappling with significant economic challenges, including high energy costs, elevated interest rates, exchange rate volatility, logistics constraints, weak consumer purchasing power and multiple taxes and levies.

He argued that imposing an additional tax burden on non-alcoholic beverage manufacturers would further increase production costs, reduce competitiveness and complicate efforts by the Federal Government to improve the ease of doing business and stimulate industrial growth.

“The bill is ill-timed, insensitive to prevailing economic realities and inconsistent with government’s commitment to reducing the burden on businesses,” Yusuf said.

The CPPE noted that the food and beverage industry remains one of the largest contributors to Nigeria’s manufacturing sector, supporting thousands of jobs and maintaining extensive linkages across agriculture, packaging, transportation, retail trade, hospitality and distribution networks.

It warned that higher taxes on beverage producers would inevitably translate into increased consumer prices, lower demand, reduced capacity utilisation and potential job losses throughout the value chain.

According to the organisation, the proposed legislation risks becoming a tax on production, investment and employment at a time when the economy requires stronger industrial expansion and increased private sector investment.

The economic policy advocacy group also questioned the necessity of the proposed legislation, pointing out that the 2026 fiscal policy framework already imposes an excise duty of ₦10 per litre on non-alcoholic beverages.

CPPE argued that introducing another layer of taxation through separate legislation would create policy inconsistency, increase regulatory uncertainty and send negative signals to both local and foreign investors.

“Investors thrive on predictability. Frequent additions to the tax burden undermine confidence and discourage long-term investment decisions,” the organisation stated.

Beyond the economic implications, CPPE challenged the public health rationale behind the bill, maintaining that evidence from various jurisdictions suggests sugar taxes alone have limited impact in addressing lifestyle-related diseases.

The organisation acknowledged the need to tackle rising cases of diabetes and other non-communicable diseases but argued that factors such as poor dietary habits, excessive consumption of carbohydrate-rich foods, sedentary lifestyles, inadequate health awareness and genetic predisposition are more significant contributors to the health challenges.

It stressed that taxation does little to address these underlying issues while imposing immediate costs on businesses and consumers.

Instead, CPPE advocated alternative measures such as nutrition education, public health awareness campaigns, promotion of physical activity, healthier dietary choices, improved preventive healthcare systems and urban planning initiatives that encourage walking and cycling.

According to the organisation, such interventions would provide more sustainable public health benefits without undermining economic productivity or industrial competitiveness.

The group therefore called on members of the House of Representatives to withhold concurrence to the bill, describing it as fundamentally anti-growth and contrary to the objectives of economic recovery and industrial development.

CPPE maintained that lawmakers should prioritise policies that support production, preserve jobs, strengthen investment confidence and provide relief to businesses and households facing rising cost pressures.

“The economy needs relief, not additional taxation; support for production, not policies that weaken enterprise; and reforms that create jobs, not measures that put them at risk,” Yusuf said.

The organisation concluded that while public health and economic growth can be pursued simultaneously, the proposed Sugar-Sweetened Beverage Tax Bill fails to achieve an appropriate balance and should be rejected in its entirety.