When the Federal Government introduced the ₦10 per litre Sugar-Sweetened Beverage (SSB) tax in 2022, it was sold to Nigerians as a clever fiscal-health intervention: generate much-needed revenue while tackling non-communicable diseases (NCDs). But three years on, the evidence is sobering. Not only has the tax failed to deliver on its supposedly “lofty health promises”, but it is also actively deindustrialising Nigeria’s beverage value chain, squeezing jobs out of existence, and undermining the very economic diversification agenda the government claims to champion. Worse still, none of the revenue collected has been transparently channelled into the health sector.
Let’s start with the numbers. Independent analyses estimate that Nigeria could raise between ₦27 billion and ₦200 billion annually from the SSB tax, depending on the methodology. The Centre for the Study of the Economies of Africa (CSEA) even projects that if rates rise to ₦130 per litre, as some activists now demand, the government could rake in as much as ₦729 billion a year. But here’s the uncomfortable truth: despite all this rhetoric about public health, nothing substantial has been ring-fenced for hospitals, nutrition programmes, or NCD prevention.
Nigeria’s federal health allocations between 2023 and 2025 expose a glaring disconnect with the rhetoric around the Sugar-Sweetened Beverage (SSB) tax. In 2023, ₦1.179 trillion was allocated to health (5.8% of the national budget), rising marginally to ₦1.336 trillion in 2024 (about 4.6–5.5%), before almost doubling to ₦2.48 trillion in 2025, or 5.18 percent of the ₦47.9 trillion national budget, with an extra ₦300 billion supplement. Yet, despite the billions claimed to have been raised annually from the SSB tax since 2022, none of it has been transparently earmarked or ring-fenced for health. Instead, allocations to secondary and tertiary healthcare, the very domains where diabetes, hypertension, and cardiovascular complications are treated, have not risen in proportion to the revenue collected. This makes the SSB tax nothing short of a sham: sold to Nigerians as a health intervention but executed in practice as a blunt revenue-grabbing instrument that penalises industry, erodes jobs, and fails to deliver on its central promise of strengthening the health system. The public was sold a health tax, but in practice, it has been nothing more than a blunt revenue-collection tool.
Meanwhile, the industrial toll is unmistakable. According to the National Sugar Development Council, Nigeria’s sugar consumption fell by 16 percent in 2023, while domestic sugar production collapsed by 35 percent. The Nigeria Employers’ Consultative Association and beverage manufacturers confirm reduced turnover, thinner margins, and job losses. Every litre taxed out of affordability shrinks the market for farmers, refiners, transporters, and distributors. We are not just taxing the soft drinks; we are taxing the livelihoods of thousands across the value chain. This is deindustrialisation in real time.
What makes it worse is the glaring policy incoherence. On the one hand, Nigeria is spending billions to subsidise and expand sugar production through the Nigerian Sugar Master Plan (NSMP). On the other hand, it is strangling demand with punitive excise taxes. This is fiscal schizophrenia, promoting production while taxing consumption out of reach. Investors are watching this contradiction and drawing the obvious conclusion: Nigeria is not a predictable place to put long-term capital.
And what of the public health argument? Advocates like CAPPA tout SSB taxation as the silver bullet against NCDs. But Nigeria’s per capita consumption of sugary drinks is among the lowest globally, far below countries like Mexico or the UK, where such taxes originated. Our NCD burden is not driven primarily by the consumption of soft drinks; it is driven by poor dietary diversity, low physical activity, weak health infrastructure, and genetic predisposition.
Diabetes and hypertension prevalence peaks in Nigerians over 40, while soft drinks are mostly consumed by youth aged 15–20. The tax is not even hitting the right demographic. At best, it is a cosmetic gesture. At worst, it is punishing the wrong people while doing little for public health.
Now we are told the tax will be raised from ₦30 to ₦130 per litre. This is not public health policy; this is fiscal laziness masquerading as health advocacy. At ₦130 per litre, manufacturers will bleed further, consumers will shift to informal and unregulated substitutes, and the black market will thrive. The supposed ₦729 billion in projected revenue will exist only on paper, while the real economy – jobs, factories, exports, and industrial confidence – continues to erode. Nigeria risks destroying one of its most vibrant FMCG sectors for a policy that delivers negligible health benefits.
The tragedy of the SSB tax is that it could have been designed better. A tiered, sugar-content-based tax would encourage reformulation, nudging companies to reduce sugar without collapsing the industry. Transparent earmarking of revenues could have built trust, with funds directed to school nutrition, health education, and fitness initiatives. Instead, what we have is a blunt, contradictory instrument that erodes confidence, undermines jobs, and fails to move the needle on health.
Nigeria is at a crossroads. We can choose coherence by aligning fiscal, industrial, and health policies to protect both lives and livelihoods. Or we can persist with contradiction, pushing through tax hikes that sound good in advocacy reports but devastate real people in factories, farms, and households. If the government insists on raising the SSB tax to ₦130 per litre without reform, it will be remembered not as a champion of public health, but as the author of one of Nigeria’s most short-sighted industrial mistakes.
Prof. Godfrey Omojefe is the President of the Chartered Institute of Financial and Investment Analysts of Nigeria (CIFIAN).
