Nigeria's tax on sugar-sweetened beverages (SSB), introduced in 2022 to curb rising diabetes rates, has been rendered largely ineffective by soaring inflation, public health experts and economists say. They argue the levy is too small to change consumer behavior and urge the government to raise the rate and implement structural reforms.
Non-communicable diseases (NCDs) account for 29% of deaths in Nigeria, according to the World Health Organization (WHO). Experts warn that NCDs are becoming a major health burden, especially in cities where ultra-processed foods high in salt, unhealthy fats, and sugar are increasingly common.
Approximately 11 million Nigerians live with diabetes, but millions more are likely undiagnosed. The country ranks among the highest in Africa for diabetes prevalence. The SSB tax of 10 naira (about $0.65) per liter was expected to discourage excessive sugar consumption and generate healthcare revenue.
However, four years on, the tax has lost its bite. Ikemesit Effiong, Managing Partner at SBM Intelligence, called it "pocket change, not policy," noting it represents barely 2% of the retail price, far below the WHO-recommended 20%.
Some experts calculate that raising the tax to 130 naira per liter would increase retail prices by about 39% and potentially reduce annual per-capita SSB consumption by 29%. Health Minister Muhammad Pate said the government could allocate at least 40% of the revenue to health programs.
Nigeria ranks 4th globally in SSB consumption, with annual sales of about 38.6 million liters. Since the tax was introduced, the country has faced economic shocks, including the removal of fuel subsidies, which exacerbated the cost-of-living crisis and pushed up beverage prices.
Opeyemi Ibitoye of CAPPA explained that because the tax is fixed rather than percentage-based, its value erodes with inflation. "The tax adds only about 5 naira or less per 50cl bottle, providing no incentive for manufacturers to reformulate," he said.
The beverage industry opposes a tax hike. The Manufacturers Association of Nigeria (MAN) argues it could trigger job losses. But Adewunmi Emoruwa of Gatefield accused the industry of "weaponizing the country's economic precarity" to slow reforms.
Successful examples from Mexico and South Africa show that SSB taxes can reduce consumption. Mexico's 10% tax in 2014 led to a nearly 10% drop in consumption. Experts recommend indexing Nigeria's tax to inflation, ring-fencing revenue for healthcare, and introducing mandatory warning labels.
"Nigeria adopted the tax but refused to enforce the playbook. The result is a policy that looks good on paper but does nothing on the ground," Effiong concluded.
Source: www.dw.com