The Centre for the Promotion of Private Enterprise (CPPE) has cautioned the Federal Government against introducing a sugar tax on beverages, warning that the policy could undermine Nigeria’s manufacturing sector and lead to job losses across the value chain.
According to the private sector advocacy group, while sugar taxation is often presented as a public health measure, its economic consequences for local beverage producers could be severe, particularly at a time when businesses are already struggling with high operating costs and weak consumer spending.
Speaking on the issue, CPPE’s Chief Executive Officer, Dr Muda Yusuf, said evidence from other markets suggests that sugar taxes have only a limited effect on reducing consumption and do not directly address the root causes of diabetes and other non-communicable diseases.
He explained that health challenges linked to sugar intake are more strongly driven by lifestyle factors such as poor nutrition habits, physical inactivity, sedentary work patterns, and rapid urbanisation. Yusuf argued that relying on taxation alone would fail to deliver meaningful health outcomes while placing immediate pressure on manufacturers.
According to Brandspur Brand News, the CPPE advised the government to adopt a more comprehensive public health strategy that focuses on prevention rather than punitive taxation. The organisation recommended investments in nutrition education, community health awareness, promotion of physical activity, and policies that encourage healthier food choices through subsidies for fruits and vegetables.
The group also highlighted the importance of urban planning that supports walking, cycling, and recreational exercise, noting that such interventions offer long-term health benefits without disrupting industrial productivity or employment.
CPPE further warned that Nigeria’s beverage industry is already heavily taxed, facing multiple layers of fiscal obligations including company income tax, value added tax, excise duties, import levies, and various state and local government charges. These burdens, combined with rising energy costs, logistics challenges, and currency volatility, have significantly increased production expenses.
The organisation noted that retail prices of beverages have risen by about 50 per cent over the past two years, even without the introduction of a sugar tax. It warned that imposing an additional levy at this stage could worsen inflationary pressures, reduce consumer demand, and discourage further investment in the sector.
Beyond manufacturers, CPPE stressed that the food and beverage industry supports millions of Nigerians across farming, raw material supply, processing, distribution, retail, and hospitality services. Any policy that weakens the sector, it said, could have far-reaching implications for employment, household incomes, and economic recovery.
Yusuf emphasised that public health objectives and economic growth are not mutually exclusive, but achieving both requires carefully designed policies that balance health goals with industrial sustainability.
