The Centre for the Promotion of Private Enterprise (CPPE) has pushed back against renewed calls for an additional tax on sugar-sweetened non-alcoholic beverages, warning that such a move could further strain Nigeria’s manufacturing sector and stall an already fragile economic recovery.

The warning came from CPPE’s chief executive officer, Muda Yusuf, who described the proposed sugar-specific tax as economically risky and poorly grounded in evidence, particularly at a time when the country is grappling with inflation, high production costs, and weak consumer purchasing power.

Yusuf acknowledged the growing public health concerns around diabetes and cardiovascular diseases but argued that the tax proposal fails to take Nigeria’s realities into account. According to him, “while these health challenges deserve urgent attention, a sugar tax has not been properly contextualized within Nigeria’s structural, social and macroeconomic environment.”

He noted that much of the advocacy for sugar taxation in Nigeria appears to mirror policy templates promoted by global health institutions, rather than being driven by local data and conditions. International experience, he added, does not show sugar taxes as a reliable or standalone solution to non-communicable diseases in developing economies like Nigeria.

Yusuf also stressed the strategic importance of the food and beverage industry to the wider economy, describing it as the backbone of Nigeria’s manufacturing sector. According to him, data from the National Bureau of Statistics shows that the sector accounts for about 40 percent of total manufacturing output, with non-alcoholic beverages playing a significant role.

“Beyond factory floors, this industry supports a long value chain, from farmers and transporters to retailers and hospitality workers, sustaining millions of livelihoods,” he said. Any policy that weakens the sector, Yusuf warned, could trigger job losses, reduced household incomes, lower investment, and setbacks to poverty reduction.
The CPPE chief further pointed out that beverage manufacturers are already weighed down by multiple taxes and levies, including company income tax, value-added tax, excise duties, import charges, and various state and local government fees. He added that these fiscal pressures are compounded by high energy costs, expensive logistics, exchange rate volatility, and elevated interest rates.

“The result has been rising production costs, thinner margins and higher prices for consumers,” Yusuf said, noting that retail prices of many non-alcoholic beverages have climbed by roughly 50 per cent over the past two years, even without any new sugar tax.

On the health front, CPPE argued that sugar taxes deliver limited benefits unless they are part of a broader, more holistic strategy. Yusuf identified poor diet quality, physical inactivity, sedentary lifestyles, urban design, and genetic factors as the main drivers of diabetes and cardiovascular diseases in Nigeria.

“Taxation may slightly influence consumption, but it does not address these root causes. The economic costs, on the other hand, are immediate and potentially severe,” he said.

Instead of additional taxes, CPPE urged policymakers to focus on longer-term, development-friendly solutions such as lifestyle and nutrition education, community-based health programmes, promotion of physical activity, incentives for fruit and vegetable consumption, healthy food subsidies, and urban planning that encourages active transportation.