By Ali Elias
The Lagos Chamber of Commerce and Industry (LCCI) has expressed concern over the Senate’s passage of a bill seeking to reform Nigeria’s Sugar-Sweetened Beverage (SSB) tax regime, warning that the measure could exacerbate existing challenges confronting the country’s manufacturing sector.
The Senate last week approved amendments to Nigeria’s SSB tax framework, replacing the existing excise duty of ₦10 per litre with a percentage-based levy tied to retail prices. The legislation also provides for the establishment of a dedicated health fund to support the fight against non-communicable diseases and strengthen healthcare delivery.
Reacting to the development, LCCI Director-General, Dr. Chinyere Almona, said while the chamber supports government efforts to address public health concerns associated with excessive sugar consumption, such policies should not come at the expense of economic growth, industrial competitiveness and employment.
In a statement issued on Monday in Lagos, Almona noted that manufacturers are already contending with multiple economic pressures, including high energy costs, exchange-rate volatility, elevated interest rates, logistics constraints, multiple taxation and weak consumer purchasing power.
According to her, the introduction of additional taxes on beverage manufacturers could increase production costs and ultimately lead to higher prices for consumers.
“This may further worsen inflationary pressures and reduce demand for locally manufactured products,” she said.
The Senate approved the revised tax structure on the grounds that the current ₦10-per-litre levy had been eroded by inflation and was no longer effective either as a public health tool or as a revenue-generating mechanism. Lawmakers argued that the new price-linked system would better discourage excessive sugar consumption while generating resources for healthcare interventions.
However, the LCCI warned that the policy could trigger unintended consequences across the broader industrial value chain, affecting suppliers, distributors, transport operators, retailers, farmers and service providers connected to the beverage industry.
Almona cautioned that a decline in production volumes resulting from increased taxation could reduce investment, lower capacity utilisation and potentially lead to job losses.
She advocated a more balanced policy approach that combines public health education, improved product labelling, consumer awareness campaigns, voluntary product reformulation and broader stakeholder engagement.
Drawing from international experience, she noted that sugar-tax policies in several advanced economies were designed primarily to encourage manufacturers to reduce sugar content rather than serve as revenue-generating instruments.
“We want to see manufacturers reformulate their products over a transition period rather than simply raise prices due to SSB taxes,” she stated.
“A reformulation-focused tax may be more effective than a revenue-focused tax as it can achieve health objectives while preserving industrial activity.”
The chamber further urged policymakers to undertake comprehensive assessments of the potential impact of the tax on agriculture, manufacturing and supply chains before implementation, particularly in sectors that support large numbers of jobs.
Almona called on the Federal Government and the National Assembly to revisit the framework through wider consultations involving manufacturers, public health experts, organised private-sector groups, consumer associations and other stakeholders.
“Such engagement will help develop a tax framework that promotes product reformulation while preserving sales, jobs and industrial competitiveness,” she said.
The LCCI’s intervention comes amid growing debate over the proposed tax reforms. While public health advocacy groups, including the Corporate Accountability and Public Participation Africa, have welcomed the Senate’s action as a major step towards reducing the burden of non-communicable diseases, business advocacy organisations have voiced concerns about its potential impact on investment and economic growth. The bill, sponsored by Senator Ipalibo Harry-Banigo, has passed the Senate and is expected to undergo further legislative consideration before becoming law. Supporters argue that the measure will help tackle rising cases of diabetes, obesity and cardiovascular diseases, while critics insist that the timing is inappropriate given the current economic realities facing manufacturers and consumers.