ThinkBusiness Africa, a Lagos-based policy and investor-relations firm, has called for a more evidence-based assessment of the proposed amendment to the Customs, Excise Tariff, Etc. (Consolidation) Act.
According to the firm, a substantial increase in the tax burden on sugar-sweetened beverages (SSBs) could raise consumer prices and production costs without delivering commensurate public health outcomes.
The warning was contained in its new policy report titled “Nigeria’s CETA Bill, Fiscal Policy, and Health Outcomes,” which examines the proposed amendment to the CETA Act and its potential fiscal, economic and public health implications.
The report noted that the proposed amendment passed third reading in the Senate on June 4, 2026, and is awaiting consideration by the House of Representatives.
Under the Senate-approved framework, the existing ₦10-per-litre excise duty on SSBs would be replaced with a levy linked to retail prices, with the applicable rate to be determined by the Minister of Finance.
ThinkBusiness Africa said the proposed change represents a significant shift in the structure and potential scale of SSB taxation and should be assessed against Nigeria’s wider fiscal, economic and public health objectives.
The firm acknowledged concerns over non-communicable diseases, including diabetes, obesity and hypertension, but maintained that the evidence linking SSB taxation to improved health outcomes requires a more nuanced assessment.
According to the report, available evidence indicates that higher taxes can reduce purchases of taxed beverages, but the extent to which such taxes directly translate into reductions in obesity, diabetes and hypertension is less conclusive.
“Reducing purchases is not the same as reducing obesity, diabetes or hypertension,” the report stated.
It noted that chronic diseases are influenced by multiple factors, including overall diet, physical activity, income, education, access to healthcare and broader living conditions.
ThinkBusiness Africa argued that policymakers should therefore distinguish between the immediate behavioural effects of taxation and longer-term population health outcomes when evaluating the proposed reform.
The report also raised concerns about the timing of the proposed reform, citing high inflation, elevated production costs, foreign-exchange pressures and weakened purchasing power as factors already putting pressure on households and businesses.
Against this backdrop, the firm said a significantly higher tax burden on beverages could feed through to retail prices and increase costs across the wider value chain, including manufacturing, agriculture, sugar supply, packaging, logistics, transportation, distribution and retail.
The report cited an estimate by the Manufacturers Association of Nigeria that approximately 1.5 million jobs depend directly or indirectly on the beverage sector.
It also referenced National Sugar Development Council data showing that total sugar consumption declined from about 1.72 million tonnes in 2022 to 1.44 million tonnes in 2023, while domestic sugar production fell from approximately 46,479 tonnes to 30,053 tonnes over the same period.
ThinkBusiness Africa stressed that the declines could not be attributed solely to the existing SSB levy, but said they illustrate the broader pressures confronting the sugar and beverage value chain.
The report further referenced modelling by the Centre for the Study of the Economies of Africa, cited in a Manufacturers Association of Nigeria submission, which estimated that a ₦130-per-litre tax scenario could increase retail prices by about 39 per cent and reduce annual per-capita consumption by approximately 29 per cent.
The firm cautioned, however, that a decline in purchases of taxed beverages would not necessarily translate into an equivalent reduction in overall sugar consumption, as consumers could substitute other products.
ThinkBusiness Africa therefore urged policymakers to undertake a comprehensive review of the existing SSB levy before introducing a substantially higher tax burden.
It said the review should examine the revenue generated since the levy was introduced, how the proceeds have been allocated, changes in consumption patterns and any measurable health outcomes associated with the policy.
“The reform should therefore be assessed not only on its expected revenue and health effects, but also on whether its design is consistent with the wider objective of creating a simpler and more predictable tax system,” the report stated.
The policy firm also recommended that policymakers examine alternative approaches, including sugar-content-based taxation, pointing to the United Kingdom as an example of a model designed to incentivise manufacturers to reformulate products and reduce sugar content.
ThinkBusiness Africa said such an approach could potentially align fiscal policy more directly with the objective of encouraging product reformulation, rather than relying primarily on taxation linked to the retail value of beverages.
The firm called for a broader impact assessment before implementation of the proposed reform, covering consumer prices, production, employment, investment, informal-market activity, consumption patterns and government revenue, alongside potential public health effects.
It also urged policymakers to complement fiscal measures with non-tax interventions, including stronger public health education, nutrition awareness, physical activity programmes, early screening, disease prevention and improved access to primary healthcare.
ThinkBusiness Africa said the objective should be to develop a policy framework that advances public health while taking account of Nigeria’s manufacturing base, household purchasing power, employment and investment priorities.
