The Centre for the Promotion of Private Enterprise has urged the government and policymakers to prioritise health interventions over imposing additional taxes on sugar-sweetened beverages. It warned that a sugar tax would undermine Nigeria’s manufacturing and employment base.

In a statement on Wednesday, Chief Executive Officer of Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, argued that evidence showed sugar taxes delivered “limited benefits” unless combined with broader lifestyle and behavioural interventions.

The CPPE identified poor diet quality, physical inactivity, sedentary lifestyles, urban design, and genetic factors as the primary drivers of diabetes and related diseases in Nigeria.

“While taxation may marginally influence consumption patterns, it does not address these root causes,” Yusuf said, warning that the economic costs of additional taxes would be “immediate, tangible, and potentially severe.”

Instead, the organisation urged the government to adopt alternatives such as lifestyle and nutrition education, community-based health awareness programmes, promotion of physical activity and exercise, encouragement of fruit and vegetable consumption, healthy food subsidies, and urban planning that supports walking and cycling.

“These measures directly address the underlying drivers of diabetes and cardiovascular diseases, deliver broader social benefits, and avoid undermining a critical pillar of Nigeria’s manufacturing and employment base,” Yusuf said.

CPPE’s chief decried the recent calls to impose additional taxes on sugar-sweetened non-alcoholic beverages in Nigeria,” describing the proposal as ‘misplaced, economically risky, and weakly supported by empirical evidence.”

Yusuf, acknowledging the urgency of addressing diabetes and cardiovascular diseases, said sugar taxation failed to reflect Nigeria’s “prevailing structural, social, and macroeconomic realities,” especially in an economy battling high inflation, weak purchasing power, and fragile industrial recovery.

He added that advocacy for sugar taxes in Nigeria was largely driven by “externally derived policy templates,” noting that global best practice did not support sugar taxation as “a sustainable or standalone solution to non-communicable diseases,” particularly in developing economies such as Nigeria.

The CPPE stressed that the food and beverage sector remained the backbone of Nigeria’s manufacturing industry. Citing data from the National Bureau of Statistics, the organisation stated that the sector contributed about 40 per cent of total manufacturing output, with the non-alcoholic beverages sub-sector playing a key role in industrial growth, employment, and value creation.

“The sector sustains an extensive value chain spanning farmers, agro-input suppliers, processors, packaging companies, logistics providers, wholesalers, retailers, and the hospitality industry,” the statement said, adding that millions of livelihoods depended on it nationwide. It warned that policies that undermined the sector could trigger job losses, reduced household incomes, falling investment and setbacks to poverty reduction.

The CPPE also noted that beverage manufacturers were already among the most heavily taxed businesses in the country. It listed existing obligations to include 30 per cent Company Income Tax, 7.5 per cent Value Added Tax, a N10 per litre excise duty, a four per cent National Development Levy, a four per cent FOB levy on imported inputs, import duties of five to 15 per cent on raw materials, a 0.5 per cent ECOWAS levy, property taxes and multiple state and local government levies.

Yusuf said these burdens were compounded by high energy and logistics costs, exchange rate volatility, and elevated interest rates, leading to rising production costs and higher consumer prices. He added that retail prices of many non-alcoholic beverages had risen by about 50 per cent in the past two years, “even in the absence of any new tax measures.”

The CPPE concluded that Nigeria’s economy remained in a delicate recovery phase, cautioning that introducing sugar-specific taxes now could reverse industrial gains and weaken employment. It said public health goals and economic growth were not mutually exclusive, calling for “balanced, holistic and development-conscious policymaking.”