The Centre for the Promotion of Private Enterprise (CPPE) has rejected calls for additional taxation on sugar-sweetened beverages, otherwise known as soft drinks, describing the proposal as ill-conceived and poorly timed amid mounting cost pressures facing Nigerian businesses.
In a policy brief issued on Tuesday, the private-sector advocacy group pushed back against recommendations by Corporate Accountability and Public Participation Africa (CAPPA), warning that introducing a new levy on the beverage industry would contradict the Federal Government’s ongoing tax reform agenda aimed at easing the burden on businesses and stimulating investment.
The chief executive officer of CPPE, Muda Yusuf, said the Nigerian economy remains in a fragile recovery phase, with key macroeconomic indicators highlighting the vulnerability of firms. He noted that persistently high inflation continues to erode consumer purchasing power, while elevated interest rates—with the Monetary Policy Rate above 26.5 per cent have pushed borrowing costs for businesses beyond 30 per cent.
The CPPE also noted that energy costs have emerged as a major constraint on industrial operations, with diesel prices rising by more than 70 per cent and petrol prices increasing by over 200 per cent in the past two years. The group stressed that these cost pressures have significantly increased the cost of self-generation of power, particularly for energy-intensive sectors such as food and beverage manufacturing.
“The imposition of additional taxes on an already energy-burdened sector would be profoundly counterproductive,” the CPPE stated, noting that beverage production relies heavily on power-intensive processes, including water treatment, bottling, and cold-chain distribution.
The think tank added that manufacturers are already grappling with weakened demand, as consumer goods prices have surged by more than 50 per cent over the past two years, leading to declining sales volumes and shrinking margins. It warned that many small and medium-scale beverage producers are facing existential threats under the current operating environment.
CPPE further cautioned that imposing new taxes on sugar-sweetened beverages could trigger a cascade of negative outcomes across the value chain, including production cutbacks, business closures, and job losses spanning agriculture, manufacturing, logistics, and retail segments.
“The food and beverage sector is one of the largest employers in Nigeria’s manufacturing space, with deep linkages to upstream and downstream industries,” the statement noted, adding that additional fiscal pressure could also disrupt agricultural supply chains and accelerate informalisation within the sector.
While acknowledging rising concerns around non-communicable diseases such as diabetes, the CPPE argued that taxation of sugar-sweetened beverages is not an effective standalone solution to public health challenges. It emphasised that health outcomes are largely influenced by broader lifestyle factors, including diet and physical activity, and called for more holistic interventions.
The group advocated for alternative measures such as public health education, improved access to preventive healthcare, and stronger collaboration between regulators and industry stakeholders to address health concerns without undermining economic stability.
CPPE also raised concerns about policy inconsistency, warning that introducing sector-specific taxes at a time of reform could send negative signals to investors and weaken confidence in Nigeria’s manufacturing sector.
“The credibility of the government’s tax reform programme depends on consistency and clarity of direction,” the organisation stated.
It urged the Federal Government to reject the proposal and called on the National Assembly to halt any legislative processes aimed at introducing additional taxes on the beverage industry.
“At this critical stage of economic recovery, the policy priority should be to support businesses, protect jobs, and drive growth—not impose additional tax burdens on already strained sectors,” Yusuf concluded
