Evaluating Nigeria’s Sugar-Sweetened Beverage (SSB) Tax: A Critical Review of CAPPA’s Policy Proposals

 

 

1. Introduction

In May 2025, the Corporate Accountability and Public Participation Africa (CAPPA) published a follow- up to its 2024 report on sugar-sweetened beverages (SSBs) and processed food marketing. Titled “Junk on Our Plates: Exposing Deceptive Marketing of Unhealthy Foods Across Seven States in Nigeria” the report calls for a steep increase in the SSB tax—from ₦10 to ₦130 per litre and stronger regulations on the marketing of SSBs and manufactured processed foods. CAPPA argues that marketing strategies employed by beverage companies significantly influence consumer habits and contribute to the rise in non-communicable diseases (NCDs) such as obesity, diabetes and hypertension.

While the report raises important concerns, its recommendations are based on weak data and flawed assumptions. This report provides a critical analysis of CAPPA’s policy proposals and their implications for Nigeria’s economy and public health.

 

2. Key Claims and Recommendations by CAPPA

CAPPA’s first report on SSBs was titled “Potential Fiscal and Public Health Effects of Sugar-Sweetened Beverages in Nigeria.” Released in 2024, the report focused on how increase in SSBs tax will raise government revenues, reduce the consumption of SSBs, and lower obesity. In addition to the latest report, CAPPA’s main assertions are:

Policy Recommendations:

 

3. Analysis of the CAPPA Reports

3.1 Selective Use of Data

CAPPA’s first report cites Adeloye et al., which highlights a high prevalence of obesity, particularly among urban women. However, CAPPA’s own findings show higher SSB consumption among young males aged 15–19, creating a mismatch between cause and effect in its justification for an SSB tax hike.

CAPPA has not updated its data but reached the same conclusions in 2025 report. In addition, CAPPA attributes rising obesity solely to SSBs, despite the Adeloye et al. report pointing to multiple causes, including processed foods, income levels, and urbanization.

Also, CAPPA’s Body Mass Index (BMI) data used in the report was an aggregation of different BMI survey data from 1990, unable to track changes and transitions. It would have been helpful if the surveys had tracked both the consumption of SSBs and BMI of the same data set.

3.2 CAPPA’s Simulation: Flawed and Risky

CAPPA’s simulation predicts a 29% drop in SSB consumption with a 39% increase in retail prices, targeting young people as the most price-sensitive group. However, such a dramatic price hike could lead to:

3.3 SSBs Taxes is not a “Silver Bullet” to Reducing Obesity and Diabetes.

The report suggests that the rise in SSBs taxes in Nigeria is the silver bullet required to control the growth of diabetes and obesity in the country. Contextualizing the conclusions of the report – the SSBs sector that already pay 45% of its gross profits in different forms of taxation is now required to pay additional N729 billion, a near 100% of the 2024 health budget of the federal government of Nigeria.

The increase in SSBs taxes to N130 per litre will not solve the problem. For instance, we don’t know how the current SSBs taxes have helped. Throwing more money at the problem will only result in declining investments, growth, and jobs in the industry and not resolve the problem, especially that SSBs consumption is only responsible for 5.1% sugar consumption in Nigeria.

Global evidence on the effectiveness of SSB taxation is inconclusive. In countries like the UK and Ireland, reductions in beverage consumption have not translated into sustained decreases in obesity or sugar-related illnesses. Instead, consumers often shift to alternative sugar sources.

3.4 Inadequate Evidence of Impact

CAPPA fails to provide evidence that the existing ₦10/litre tax has reduced SSB consumption or improved health outcomes. Without a clear assessment of the current policy’s effectiveness, its recommendation for a 1200% tax hike lacks credibility.

Health-based justifications for the SSB tax lack firm grounding in Nigeria’s context. Per capita sugar intake stands at just 7.1 kg—well below the World Health Organisation (WHO) recommendation of 9.1 kg and far beneath the global average. Beverages contribute only 5.1% of household sugar intake and 2.4% of calories, while the vast majority of Nigerians struggle with food insecurity and spend over half their income on basic staples. Moreover, obesity and non-communicable diseases are concentrated in wealthier urban populations, not among the poor who rarely consume SSBs due to cost.

3.5 Research shows that Nigeria’s sugar consumption remains relatively low

Research shows that Nigeria’s sugar consumption remains relatively low compared to both global and regional averages. For example, a study by Folahanmi et al. revealed that only 2% of Nigerians suffer from tooth decay—a stark contrast to countries with higher sugar intake. The study attributes this lower incidence of dental caries to Nigeria’s comparatively modest sugar consumption.

Supporting this, the International Sugar Organisation (ISO), as cited in a 2020 Daily Trust article by Latif Busari (former Executive Secretary of the National Sugar Development Council) and journalist Abdullahi Yunusa, reported that Nigeria’s per capita sugar consumption stood at just 6.9kg in 2018— one of the lowest figures in West Africa.

Moreover, while the World Health Organisation (WHO) recommends a per capita sugar intake of 9.1kg, Nigeria’s current consumption level of 7.1 kg suggests that excessive sugar intake is not the sole driver of rising obesity and diabetes rates. Evidence from other countries shows that SSB taxes often lead consumers to switch to other high-sugar alternatives, such as confectionery products. This substitution effect can undermine the intended health benefits of such taxes.

3.6. An increase in the SSBs tax in Nigeria is likely to further harm investments and jobs

An increase in the SSBs tax in Nigeria is likely to further harm investments and employment within the industry. Currently, there has been an estimated 8–10% decline in profits, and the Manufacturers Association of Nigeria (MAN) has projected a potential 40% revenue drop over the next five years (BusinessDay).

The SSBs sector is a key contributor to the national economy. Representing 33% of the manufacturing industry, this sector supports over 1.5 million jobs and has invested more than US $ 10.5 million in community development across health, education, and environmental sustainability. Operating costs have soared due to inflation, foreign exchange constraints, and energy price hikes, including a 168% increase in diesel costs. The result has been a 78% spike in production costs, threatening business viability, employment, and overall GDP contribution. Raising SSB taxes further risks undermining public revenue and economic output. In some cases, increases of an estimated 8% – 22% in excise rates could reduce government tax income by up to 20% and shrink gross value added of the industry.

3.7 Robust framework required to deal with rising obesity and diabetes.

Finally, although SSBs contribute to obesity and diabetes, substantial research underscores that these conditions are influenced by a complex mix of genetic, environmental, behavioral, and physiological factors. Sedentary lifestyles, poor nutrition, and inadequate sleep are all significant contributors.

Physical inactivity, in particular, lowers energy expenditure, leading to weight gain and increased insulin resistance.

Reducing SSB consumption can support better health, but addressing obesity and diabetes effectively requires a holistic approach. Public health strategies must incorporate genetic screening, lifestyle changes, environmental reforms, and socioeconomic support to tackle these multifaceted challenges comprehensively.

 

Table 1. Summary of Gaps in CAPPA’s Reports

Gaps Key Evidence Implications
Low Sugar Intake 7.1kg per capita; 5.1% from beverages Low sugar context: beverage-focused tax hike ignores a broader problem
Too poor to afford SSBs 1.4% household spend on non-alcoholic drinks Low-income constraints: taxes hit the vulnerable hardest
Heavy Tax Burden 40–45% of gross profits; tax revenues likely to decline after tax hikes Overburdening; discourages growth and investment
Investment and Job Risks Tax rises risks up to 15% job loss, and estimated 1% GDP decline from tax hikes SSBs tax hike will lead to job losses and decline in investments, lowering overall economic performance
Policy Contradiction SSBs sector is critical to Nigeria’s backward integration. Policy incoherence hampers local sugar and industrial goals

4. Economic Realities of the SSB Sector

4.1 Complex Industry Structure
The SSB industry in Nigeria is highly fragmented and dynamic, with diverse consumer segments and distribution channels. Tax enforcement in this environment is inherently challenging and risks disproportionately impacting small and medium enterprises (SMEs).

4.2 Heavy Tax Burden

In addition to the SSB tax, beverage companies already pay:

Combined, these taxes can exceed 40% of gross profit. According to PwC, the effective tax burden in the non-alcoholic beverage sector reaches 45%, making further excise increases unsustainable. The tax reform bills passed by the National Assembly is expected to streamline these taxes when it becomes law.

 

5. Fiscal and Policy Concerns

5.1 No Clear Revenue Data or Health Spending

Since the implementation of the SSB tax in 2022, the government has not released data on revenue generated or how those funds have been used to support improved health outcomes. Without transparency and earmarked spending, the tax risks becoming a revenue-generation tool with little public health return.

5.2 Disproportionate Focus on SSBs

The World Bank notes that while SSBs are a significant source of added sugars, they are not the only contributor to poor diets and rising NCDs. A narrow policy focus on SSBs ignores broader issues such as processed food consumption, physical inactivity, and health literacy.

 

6. Policy Alternatives and Recommendations

6.1 Strengthen Enforcement, Not Just Tax Rates

6.2 Broaden Public Health Interventions

6.3 Evidence-Based Fiscal Policy

 

7. Conclusion

 CAPPA’s latest report highlights legitimate health concerns but overextends its argument by proposing a steep and unjustified increase in the SSB tax. Without reliable data, a comprehensive strategy, or consideration of economic realities, the recommendation amounts to a “trigger-happy” fiscal policy. A more balanced, evidence-based approach is essential—one that addresses both public health and economic sustainability.

 

Bibliography

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  2. Potential Fiscal and Public Health Effects of Sugar Sweetened Beverage Tax in Corporate Accountability and Public Participation Africa (CAPPA) February 2024. https://cappaafrica.org/wp-content/uploads/2024/02/Potential-Fiscal-and-Public-Health- Effects-of-Sugar-Sweetened-Beverage-Tax-in-Nigeria.pdf
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