The Centre for the Promotion of Private Enterprise (CPPE) has rejected proposals for additional taxation on sugar-sweetened beverages (SSBs), warning that such a move would worsen cost pressures on businesses, undermine economic recovery, and trigger job losses across Nigeria’s manufacturing value chain.
In a policy brief released Tuesday, signed by its Chief Executive Officer, Dr Muda Yusuf, CPPE described the proposal, championed by Corporate Accountability and Public Participation Africa, as “ill-conceived” and “poorly timed.”
It argued that the proposal runs counter to the Federal Government’s ongoing tax reform agenda.
“At a time when the Nigerian economy is still navigating a fragile recovery, the imposition of new taxes on the manufacturing sector… would be profoundly counterproductive and disruptive to growth, employment, and investment,” Yusuf said.
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Pinnacle Daily recalls that CAPPA has consistently raised concerns about the rising incidence of non-communicable diseases, warning that it poses a growing national health crisis, and has criticised any policy stance that appears to prioritise economic gains over public health.
Cost crisis at breaking point
CPPE, however, anchored its opposition on what it described as “unprecedented cost pressures” facing businesses, particularly in the food and beverage sector.
The Centre cited persistently high inflation, lending rates above 30 per cent, and surging energy costs as key constraints.
Diesel prices have risen by more than 70 per cent and petrol by over 200 per cent in two years, the group noted, while exchange rate depreciation has sharply increased the cost of imported inputs.
According to the CPPE, the SSB industry is especially vulnerable due to its heavy reliance on energy-intensive processes such as water treatment, bottling, refrigeration, and distribution.
“Imposing additional taxes on an already energy-burdened sector would amount to a punitive layering of fiscal pressure on top of an unprecedented cost crisis,” it stated.
It maintained that consumer goods prices have already risen by over 50 per cent, while declining purchasing power has weakened sales volumes and pushed many small and medium-scale producers to the brink.
Jobs, investment at risk
The group warned that further taxation could trigger widespread economic fallout, including factory closures, production cutbacks, and job losses across agriculture, manufacturing, logistics, and retail.
“The food and beverage sector is the largest employer in manufacturing and supports an extensive value chain,” Yusuf said, cautioning that additional taxes could “accelerate downscaling of production” and “increase informalisation as firms struggle to survive.”
Public health argument ‘misplaced’
While acknowledging concerns about rising cases of non-communicable diseases such as diabetes, CPPE argued that taxing sugary drinks is not an effective solution.
“Taxation of sugar-sweetened beverages is not a silver bullet,” it said, pointing instead to broader factors such as diet, physical inactivity, and lifestyle choices.
The group called for alternative interventions, including public health education, preventive care, and collaboration with industry stakeholders, noting that global evidence on sugar taxes shows “mixed outcomes.”
Policy inconsistency concerns
CPPE also warned that introducing new sector-specific taxes would contradict the government’s stated commitment to reducing the tax burden, improving efficiency, and creating a more investment-friendly environment.
“Such measures would create policy uncertainty, send negative signals to investors, and undermine confidence in Nigeria’s manufacturing sector,” Yusuf said.
Call for rejection
The organisation urged the Federal Government and National Assembly to reject the proposal outright, insisting that policy priorities should focus on supporting businesses and protecting jobs.
“At this critical stage of Nigeria’s economic recovery, the policy imperative should be to support businesses, protect jobs, and strengthen growth—not impose additional tax burdens,” the CPPE added.
Alex is a business journalist cum data enthusiast with the Pinnacle Daily. He can be reached via ealex@thepinnacleng.com, @ehime_alex on X
