FG to generate N729bn annually with N130/litre sugary drinks levy, CAPPA ED

Muhammad Ali Pate
Minister of Health, Nigeria

Stanley Ihedigbo

Executive Director of Corporate Accountability and Public Participation Africa (CAPPA), Mr. Akinbode Oluwafemi, has said that an increase to a minimum of N130 per litre would generate up to N729 billion annually for Federal Government of Nigeria.

In a statement made available to The Mirror, signed by Media and Communication Officer, Corporate Accountability and Public Participation Africa (CAPPA), Robert Egbe, Oluwafemi, noted that according to expert analysis by the Centre for the Study of the Economies of Africa (CSEA), the federal government could generate such revenue annually.

He further said that the revenue could offset the estimated N493.3 billion Nigeria currently spends each year treating Sugar-Sweetened Beverages (SSB)-related diseases such as diabetes and cardiovascular conditions.

“It would help curb the rising prevalence of Non-Communicable Diseases (NCDs), which already account for nearly 30 percent of deaths nationwide and threaten to overwhelm health facilities. It would also encourage product reformulation, pushing beverage manufacturers to reduce sugar content and, in turn, promote healthier diets.”

He commanded the Federal Government’s decision to develop a draft policy that will earmark revenues from excise taxes on alcohol, tobacco, and SSBs for health financing.

He described the initiative as a decisive opportunity for the President Bola Ahmed Tinubu administration to leave a legacy of sustainable funding for Nigeria’s fragile healthcare system and to protect the health of Nigerian citizens.

Oluwafemi further noted that the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, disclosed that the Federal Government is finalising a draft policy to channel excise-tax revenues from alcohol, tobacco, and sugary drinks into health financing.

“The policy will soon be submitted to the Minister of Health and Social Welfare. CAPPA referenced local and World Health Organisation (WHO) reports showing that Nigeria is reeling from grossly inadequate public health financing and grappling with the double burden of NCDs, fuelled by the excessive consumption of sugar-laden beverages, salt, tobacco and alcohol by citizens.

“These diseases, it added, were responsible for nearly 30 per cent of all deaths in the country, making the situation a public health emergency.

“By initiating the draft policy, the FG has demonstrated commitment towards tackling the upsurge of NCDs in the country”, CAPPA said.

It urged the government to take comprehensive action, not only by earmarking SIN Taxes but also by adopting the recommendations of the WHO and CAPPA to make the taxes effective.

“This would involve benchmarking them on rates high enough to reduce consumption, encourage product reformulation, and ultimately ease the country’s health burden.

“The WHO had recently advised Nigeria and other member states to raise the prices of sugary drinks, alcohol, and tobacco by 50 percent through taxation over the next decade, as a means of curbing NCDs.

“The organisation expressed confidence that such measures would cut consumption of these harmful products, which contribute to illnesses such as diabetes and cancer, while also generating critical revenue for public health.

“The call was part of its “3 by 35 Initiative,” a global effort, which, according to the WHO, comes at a time when health systems are under immense strain from rising NCDs, shrinking development aid, and mounting public debt.

“NCDs, including heart disease, cancer, and diabetes, account for over 75 percent of all deaths worldwide, and, according to the WHO, a one-time 50 percent price increase on these products could prevent 50 million premature deaths over the next 50 years,” they stated.

Oluwafemi, cautioned that unless the health taxes are raised to an effective threshold, the policy will not achieve its intended goal.

“We commend the government for proposing to earmark the revenues from the SIN tax to public health, as long advocated by WHO, CAPPA and other pro-public health civil society organisations in Nigeria. However, we must emphasise that in the case of sugary drinks, the impact of this draft policy will only be maximised if Nigeria significantly raises SSB tax from the current N10 per litre to at least N130 per litre, adjustable to inflation.

“CAPPA has consistently recommended, based on available evidence and in-depth research, that the current N10 per litre excise duty—introduced under the 2021 Finance Act—is grossly inadequate. At N10, the tax represents only about N3.33 on a N300, 50cl bottle, less than 1 percent of the retail price. Such a token measure cannot meaningfully discourage excessive consumption or generate substantial revenue,” Oluwafemi stated.

Furthermore, the NGO advised the government to expand and strengthen tobacco and alcohol taxes, ensuring rates are sufficiently high to discourage harmful consumption.