By Milcah Tanimu

The Manufacturers Association of Nigeria (MAN) has issued a cautionary note regarding the proposed increase in taxes on sweetened beverages, highlighting the potential negative consequences for government revenue, businesses, and consumers in the country.

In an official statement signed by the Director General, Segun Ajayi-Kadir, MAN explained that Nigeria’s prior implementation of a sugar tax in 2021 had already yielded significant negative outcomes. This included an 8% to 10% drop in industry revenue and adverse growth in the Food and Beverage sub-sector’s Gross Domestic Product (GDP).

The statement also expressed concern that if the suggested tax increase is enforced, it could lead to more distressing outcomes, such as widespread layoffs, factory closures, and the exacerbation of an already severe unemployment crisis, which is projected to reach 41% in 2023.

Ajayi-Kadir emphasized that the consequences of this tax would extend beyond the manufacturing sector. He pointed out that lower-income consumers, who heavily rely on sweetened beverages as part of their diet due to limited access to fresh produce amidst soaring inflation, would be disproportionately affected. The proposed tax, coupled with the inflation crisis, could further erode their purchasing power, leading to higher prices for essential goods and services.

The Organised Private Sector (OPS) also criticized a coalition for misleading the public about the impact of sugar on health and called on the government not to increase excise taxes on sugar-sweetened beverages under the guise of combating diabetes and obesity. The OPS urged careful consideration of the issue to avoid oversimplification and misguided demonization of sweetened beverages.