Excise duty on SSBs impacting economy negatively – CIFIAN

By Cynthia Alo

The Chartered Institute of Financial and Investment Analysts, Nigeria, CIFIAN, has called on the Federal Government to urgently align its Sugar-Sweetened Beverage (SSB) tax policy with broader public health objectives and Nigeria’s industrial development goals.

The Institute warns that steep tax increases, if implemented without a coherent framework, could harm the country’s sugar economy, undermine jobs, and fail to deliver the intended health outcomes.

Speaking at a policy workshop themed “Understanding the Impact of SSB Taxation on Nigeria’s Sugar Economy: Supply, Demand, and the Policy Disconnect”, CIFIAN President, Prof. Godfrey Omojefe, said the current N10 per litre excise duty on SSBs, introduced in 2022, has already had significant economic consequences.

Citing data from the National Sugar Development Council (NSDC), Omojefe revealed that national sugar consumption declined by 16 percent in 2023, while domestic sugar production fell by 35 percent, from 46,479 metric tonnes in 2022 to 30,053 metric tonnes in 2023.

He noted that these drops are closely linked to a challenging economic environment and the direct impact of the existing SSB tax on beverage manufacturers, who are among the largest industrial consumers of sugar.

According to him, the SSB tax was introduced with good intentions, but without a holistic policy framework, its impact will remain limited and potentially harmful to local production, investment, and jobs.

The Institute expressed concern over recent proposals by advocacy groups such as the Corporate Accountability and Public Participation Africa (CAPPA), which is calling for a twelve-fold increase in the excise duty from ¦ 10 per litre to ¦ 130 per litre. Such an increase, CIFIAN argued, would likely push retail prices up by between 20 percent and 50 percent, triggering a sharp drop in demand, further reducing aggregate production in the beverage sector, and weakening the Nigerian Sugar Master Plan (NSMP).

The NSMP, a flagship government initiative, aims to achieve self-sufficiency in sugar production, cut dependence on imports, create jobs, and conserve foreign exchange. However, punitive taxes on sugar’s primary industrial application, SSBs, risk undermining these targets by discouraging investment in sugarcane cultivation, refinery expansion, and backward integration programmes.

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