The Centre for the Promotion of Private Enterprise, CPPE, has warned against renewed calls for the introduction of additional taxes on sugar-sweetened non-alcoholic beverages, describing the proposal as harmful to Nigeria’s manufacturing sector and the broader economy.
In a statement, the Executive Director of CPPE, Dr. Muda Yusuf, said while public health concerns such as diabetes and cardiovascular diseases “undoubtedly deserve urgent attention,” the introduction of a sugar-specific tax is “misplaced, economically risky, and weakly supported by empirical evidence”.
The organization argued that the proposal is not properly aligned with Nigeria’s economic realities. “More importantly, it is not adequately contextualized within Nigeria’s prevailing structural, social, and macroeconomic realities,” CPPE stated.
According to the group, advocacy for sugar taxation in Nigeria is largely driven by foreign policy models.
“The push for sugar taxation is mostly inspired by externally derived policy templates, particularly those promoted by global health institutions,” CPPE noted, adding that “global best practice does not support sugar taxation as a sustainable or standalone solution to non-communicable diseases, especially in economies like Nigeria.”
CPPE warned that imposing additional taxes on the sector could have far-reaching consequences. “The likely outcomes include job losses, declining household incomes, reduced investment, and setbacks to poverty-reduction efforts,” it said.
The think tank stressed that manufacturers of non-alcoholic beverages are already heavily burdened by multiple taxes and levies.
“These companies currently contend with 30 per cent company income tax, 7.5 per cent VAT, N10 per litre excise duty, a 4 per cent national development levy, import duties, ECOWAS levies, and multiple state and local government charges,” CPPE stated.
It added that these fiscal pressures are worsened by Nigeria’s challenging operating environment.
“High energy costs, expensive logistics, exchange-rate volatility, and elevated interest rates have continued to drive up production costs, squeeze margins, dampen investment appetite, and push consumer prices higher,” the group said.
CPPE disclosed that affordability has already been severely eroded. “Retail prices of many non-alcoholic beverages have increased by about 50 per cent in the past two years, even without the introduction of any new tax measures,” it noted.
On the public health argument, CPPE maintained that sugar taxes offer limited benefits in isolation.
“Available evidence suggests that sugar taxes deliver minimal public health gains unless they are embedded within broader, long-term lifestyle and behavioral interventions,” the organization said.
It identified the main drivers of diabetes and other non-communicable diseases in Nigeria as “poor overall diet quality, physical inactivity, sedentary lifestyles, and urban designs that discourage walking and cycling, as well as genetic and hereditary factors.”
While acknowledging that taxation may slightly influence consumption, CPPE argued that “it does not address these root causes,” warning that “the economic costs of additional taxation—higher prices, reduced demand, job losses, and weakened industrial investment—are immediate and potentially severe.”
The organization urged the government to pursue alternative approaches.
“Policymakers should prioritize evidence-based, inclusive, and development-friendly strategies such as lifestyle and nutrition education, community-based health awareness programs, promotion of physical activity, healthy food subsidies, and urban planning that supports active transportation,” CPPE said.
According to the group, “These measures directly address the underlying drivers of diabetes and cardiovascular diseases while avoiding policies that could undermine a critical pillar of Nigeria’s manufacturing and employment base.”