A 1,200 percent increase in Nigeria’s sugar-sweetened beverage (SSB) tax has been described as “statistically inconsistent and economically risky” by ThinkBusiness Africa, a Lagos-based business intelligence firm, in response to advocacy calls for tax reform.
In May 2025, the Corporate Accountability and Public Participation Africa (CAPPA) released a report titled ‘Junk on Our Plates’, calling for an increase in the SSB tax from N10 to N130 per litre, reflecting a 1,200 percent increase.
The group linked the consumption of sugary drinks to rising rates of obesity, diabetes and hypertension across the country, and accused beverage companies of deploying culturally resonant advertising to mislead consumers.
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But ThinkBusiness Africa, known for its macroeconomic and policy research, in a response, said CAPPA’s recommendation lacks a solid foundation. The firm argued that the advocacy group based its conclusions on outdated and misaligned data.
“You cannot credibly propose a 1,200 percent increase in any tax without first evaluating the impact of the existing policy,” said Ogho Okiti, chief executive officer of ThinkBusiness Africa.
“Policy decisions must be rooted in evidence, not just urgency. The risk of overreach is high—both in economic disruption and public trust.”
The current SSB tax, introduced in 2022, charges N10 per litre on non-alcoholic, carbonated, and sweetened beverages. Although CAPPA argues this rate has had little to no impact on health outcomes, ThinkBusiness notes that no national evaluation has been conducted to assess its effectiveness.
Okiti further outlined the complexity of Nigeria’s beverage industry, which spans large-scale manufacturers to informal retail vendors operating across rural and urban economies.
In such a fragmented market, he warns, tax enforcement becomes difficult and often disproportionately affects small and medium enterprises. “There’s a tendency in some advocacy circles to treat sugar-sweetened beverages as the sole culprit in Nigeria’s nutritional challenges,” he said.
“But dietary health is influenced by a constellation of factors—urbanization, income, education, processed food consumption, and sedentary behavior. Singling out SSBs is reductionist.”
The CEO also argued with how CAPPA framed its health data. For instance, while the May report highlights obesity among urban women, its recommendations focus on adolescent males, whom it identifies as the top SSB consumers.
However, Okiti says these projections omit important factors such as a shrinking tax base.
The Nigerian beverage industry is already burdened with taxes, including a 30 percent corporate income tax, 7.5 percent VAT, and 3 percent tertiary education tax.
According to PwC, this adds up to an effective tax burden of about 45 percent. Hence, a N130/litre levy would only deepen the strain—on both producers and consumers.
Okiti explained that there’s a tendency in some advocacy circles to treat sugar-sweetened beverages as the sole culprit in Nigeria’s nutritional challenges.
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“But dietary health is influenced by a constellation of factors—urbanisation, income, education, processed food consumption, and sedentary behaviour. Singling out SSBs is reductionist,” he stated.
In an economy where informal retail plays a big role, he warns that a steep SSB tax would disproportionately affect small and medium businesses. It could also accelerate the shift toward unregulated alternatives, undermining public health efforts and tax enforcement alike.
He says, “The data does not justify an extreme response.”
He recommends a more layered approach. According to him, beyond taxation, the government should enforce existing regulations on trans fats, nutrition labelling, and misleading health claims. “Without proper data, we are building policies on guesswork.”
Since the SSB tax was introduced, no public report has been released detailing how much has been collected—or how the funds have been used to strengthen the health system.
“If public health is the stated goal, then Nigerians deserve to know how their money is being used to achieve it,” Okiti said.
