Inside the Senate’s Fierce Battle 

Over Nigeria’s Sugar Drink Tax

The nation’s push to overhaul its sugar-sweetened beverage tax has exploded into a high-stakes national tussle, pitting urgent health warnings against the survival anxieties of a battered manufacturing sector, writes

Festus Akanbi

The mood in the National Assembly has shifted in recent weeks, sharpening into a combative, data-laden contest over one of Nigeria’s most consequential fiscal health proposals in years: the restructuring of the sugar-sweetened beverage (SSB) tax.

What began as a routine amendment to the Customs and Excise Tariff (Consolidation) Act has swelled into a national referendum on the boundaries of taxation, the economics of survival in a distressed manufacturing climate, and the urgent public-health warnings surrounding Nigerians’ changing diets.

Consultations

Behind closed-door consultations and in public hearings that drew huge crowds, senators, ministers, manufacturers, doctors, economists, and civil-society actors wrestled with the central question: should Nigeria replace the flat N10-per-litre excise with a percentage-based levy of at least 20 per cent of retail price, as recommended by the World Health Organisation? The proposed regime would also, for the first time, earmark a portion of the revenue for health-promotion programmes that have long been starved of funding.

The Senate’s Joint Committees on Finance and Customs and Excise opened the floor, and the arguments that followed showed the depth of the divide. Health advocates anchored their case on epidemiological trends that they say have reached an inflection point. Manufacturers countered with economic data that paints a picture of an industry staggering under the weight of inflationary shocks, currency volatility, energy crises, and consecutive rounds of tax escalation.

Rising Health Conditions

For supporters, the stakes are clear. Non-communicable diseases, once a footnote in Nigeria’s health profile, now account for roughly 29 per cent of all deaths, according to global health estimates, with obesity, diabetes, and cardiovascular conditions rising steadily across urban and semi-urban communities.

Sugary beverages, they argue, have become one of the cheapest, most widely consumed vectors of excess sugar, especially among low-income households and young people. According to the Federal Ministry of Health, consumption of SSBs has expanded significantly in the past decade, coinciding with a rise in preventable lifestyle diseases that impose heavy financial burdens on families and on the national health budget.

Macroeconomic Realities

But opponents of the bill insist that the conversation cannot be divorced from Nigeria’s brutal macroeconomic realities. The Manufacturers Association of Nigeria (MAN) entered the hearing with pointed reservations. Its representative, Mr. Adeyemi Folorunsho, argued that the health narrative exaggerates Nigeria’s sugar-consumption profile.

Using per-capita consumption comparisons, he said Nigerians consume far less sugar, less than 10 kilograms per person annually, relative to countries where SSB taxation has proven more impactful, some of which exceed 30 kilograms per capita. On that basis, he warned, a steep retail-price tax would miss its health target while crippling a sector that employs thousands and drives a long value chain spanning packaging, logistics, distribution, and petty retail.

Beyond consumption data, MAN pointed to the cascading pressures already weighing on producers. Factory-input costs, according to industry submissions, have risen by an estimated 40 to 60 per cent in the last year alone, driven by energy tariffs, diesel inflation, foreign-exchange constraints, and higher logistics costs. Beverage prices, manufacturers noted, have already climbed by 200 to 300 per cent since 2021 due to successive excise adjustments and rising operating expenses. Another tax shock, they warned, could push companies to scale down production or exit the market entirely.

The Abuja Chamber of Commerce and Industry bolstered its economic argument with employment figures. Up to 1.5 million jobs, both formal and informal, are linked to the SSB industry, including bottling plant workers, suppliers, transporters, wholesalers, street vendors, and kiosk operators. In a climate where market confidence is fragile and credit costs are rising, ACCI President, Dr. Emeka Obegolu, urged caution, arguing that poorly sequenced taxation risked driving more businesses underground or into insolvency.

Deepening Uncertainty among Investors

The Centre for the Promotion of Private Enterprise added a procedural critique to the mix. Its director, Dr. Muda Yusuf, questioned why the review was being driven by the health ministry rather than the finance ministry, which traditionally coordinates excise-rate policy.

He warned that a sector-targeted tax without broader inter-ministerial alignment could deepen uncertainty among local and foreign investors at a time when the manufacturing sector is already shrinking in real terms. The group urged senators to consider alternative interventions, such as improved food labelling, national fitness campaigns, and industry-led sugar-reduction reformulations, rather than relying on taxation as a blunt behavioural-change instrument.

Opponents also noted that sugar consumption in Nigeria extends beyond beverages to bread, pastries, baby food, confectionery, and carbohydrate-dense staples. Singling out SSBs, they said, created an inequitable policy landscape that risked distorting competition while failing to address the broader dietary drivers of disease.

Yet, as the debate broadened, the health lobby mounted a forceful, data-grounded push of its own. The Minister of Health, Prof. Ali Pate, positioned the bill within a national health-security framework. He noted that while the N10 per litre tax introduced in 2021 had initial promise, runaway inflation, now hovering in the 20 to 30 per cent band, has eroded its deterrent value and diminished its fiscal relevance. A soda that once sold for N150 now retails between N300 and N450, rendering the fixed levy ineffective. By WHO standards, only a retail price tax of at least 20 per cent has a measurable impact on consumption and industry reformulation.

Pate stressed that part of the SSB revenue would be earmarked for preventive care, an investment he described as critical in a country where out-of-pocket spending accounts for more than 70 per cent of total health expenditure. With non-communicable diseases now costing Nigerian households billions in treatment expenses every year, he argued that the tax reform is less about penalising consumers and more about securing long-term health financing.

Civil-society organisations reinforced the point with even more aggressive recommendations. Corporate Accountability and Public Participation Africa urged senators to adopt a 50 per cent retail price tax, or, at a minimum, the 20 per cent WHO benchmark.

CAPPA referenced global studies indicating that substantial SSB taxes can reduce consumption by up to 24 per cent within two years, while incentivising producers to reformulate products with lower sugar content. The organisation also advocated the creation of a national monitoring and evaluation task force to ensure transparency, track health outcomes, and adjust rates based on evidence.

The Diabetes Association of Nigeria added urgency to the discourse. With national diabetes prevalence now estimated at around seven per cent, and with treatment costs rising, the association argued that the fiscal measure was overdue.

Far from shrinking revenue, it said, a percentage-based tax could grow SSB tax proceeds by up to 200 per cent, funds that could be redirected into preventive screening, education campaigns, and non-communicable disease clinics nationwide.

Inside the hearing room, lawmakers listened keenly, though subtle cues suggested where the pendulum might tilt. A representative of the Senate President, Senator Adeniyi Adegbomire, described the reform as a “strategic health investment” rather than a conventional excise revision.

While emphasising that the intention was not to compound economic hardship, he argued that Nigeria could not continue operating on outdated fiscal structures that no longer align with either monetary or health realities.

The Ministry of Finance offered cautious endorsement, reminding senators that the president retains statutory authority to vary rates, but confirming that a more exhaustive review of SSB and alcoholic-beverage taxes is underway.

The clash, at its core, is a familiar one: the tension between industrial continuity and societal well-being. Manufacturers warn that the proposed levy could threaten jobs, shrink output, and dampen competitiveness in a period of economic fragility. Health advocates counter that the cost of inaction is far steeper, measured not in factory closures, but in rising morbidity, household medical bankruptcies, and the long-term fiscal strain of an overburdened health-care system.

Both sides cite data. Both invoke global precedents. Both warn of unintended consequences. And both accuse the other of overlooking the bigger picture.

As the Senate moves towards harmonising the competing proposals, the question remains whether Nigeria can strike a middle ground, one that preserves industrial viability while confronting a public-health crisis that grows more visible by the day.