Firm faults health claims behind proposed SSB tax hike

By **Bianca Iboma-Emefu **

A new policy report has warned that Nigeria’s planned sharp increase in taxes on sugar-sweetened beverages (SSBs) may fail to deliver meaningful reductions in obesity, diabetes and hypertension, even as it raises prices for consumers already under economic pressure.

ThinkBusiness Africa, a Lagos-based policy and investor-relations firm, released the report titled “Nigeria’s CETA Bill, Fiscal Policy, and Health Outcomes,” recently. It examines the Senate-passed amendment to the Customs, Excise Tariff, Etc. (Consolidation) Act, which would replace the current flat N10-per-litre excise duty on SSBs with a levy tied to retail prices, with the rate set by the Minister of Finance.

The bill awaits House of Representatives consideration.

While acknowledging rising concern over non-communicable diseases, the firm argued that the evidence linking higher SSB taxes to better population health outcomes is far from conclusive.

“Reducing purchases is not the same as reducing obesity, diabetes or hypertension,” the report stated. Chronic conditions are driven by multiple factors including overall diet, physical activity levels, income, education, access to healthcare and broader living conditions, it noted. Higher taxes can cut sales of taxed drinks, but the translation into lower rates of obesity, diabetes and hypertension remains weaker and more uncertain.

The report referenced modelling cited by the Manufacturers Association of Nigeria estimating that a N130-per-litre tax scenario could lift retail prices by about 39 per cent and cut annual per-capita consumption of the taxed beverages by roughly 29 per cent. However, ThinkBusiness Africa cautioned that lower purchases of SSBs do not automatically mean equivalent drops in total sugar intake, as consumers may simply switch to other products.

It also pointed to declines in overall sugar consumption (from about 1.72 million tonnes in 2022 to 1.44 million tonnes in 2023) and domestic sugar production, while stressing these trends cannot be attributed solely to the existing levy and reflect wider pressures on the value chain.

Against a backdrop of high inflation, elevated production costs and weakened household purchasing power, the firm argued that a substantially heavier tax burden risks feeding through to higher retail prices and costs across manufacturing, agriculture, packaging, logistics and retail sectors that support an estimated 1.5 million jobs, according to industry figures.

ThinkBusiness Africa called for a thorough review of the current N10-per-litre levy before any major escalation. That review should assess revenue raised so far, how the funds have been used, shifts in consumption patterns, and crucially any measurable improvements in health outcomes linked to the policy.

The firm recommended considering alternative designs, such as sugar-content-based taxation modelled on the United Kingdom’s approach, which aims to push manufacturers to reformulate products and lower sugar levels rather than simply taxing retail value.

It also urged policymakers to pair any fiscal measures with stronger non-tax interventions: public health education, nutrition awareness campaigns, physical activity programmes, early screening, disease prevention efforts and better access to primary healthcare.

The objective, ThinkBusiness Africa said, should be a policy framework that genuinely advances public health while accounting for Nigeria’s manufacturing base, household incomes, employment and investment needs. A comprehensive impact assessment covering prices, production, jobs, consumption patterns, informal markets, government revenue and health effects is essential before implementation, the report concluded.

The post Firm faults health claims behind proposed SSB tax hike appeared first on The Sun Nigeria.