Dike Onwuamaeze
Following the passage of the Sugar-Sweetened Beverage (SSB) Tax Bill by the Senate, the Lagos Chamber of Commerce and Industry (LCCI) has expressed concern “about the potential economic consequences of imposing additional taxes on an already challenged manufacturing sector.”
The chamber stated that, “public health interventions must be carefully designed to achieve health outcomes without imposing disproportionate costs on businesses, consumers, and the broader economy.”
The Director General of LCCI, Dr. Chinyere Almona, expressed these views yesterday in a statement on the passage of the bill.
Almona stated: “At a time when manufacturers are grappling with high energy costs, exchange rate volatility, elevated interest rates, logistics challenges, multiple taxation, and weak consumer purchasing power, the introduction of additional taxes on the beverage industry risks further increasing production costs.
“These higher costs are likely to be passed on to consumers through higher prices, worsening inflationary pressures, and reduced demand for locally manufactured products.”
She said the chamber was particularly concerned that the tax could have unintended consequences across the industrial value chain because the beverage industry supports a wide network of suppliers, distributors, transport operators, retailers, farmers, and service providers.
“Any decline in production volumes resulting from increased taxation may negatively affect these interconnected sectors, leading to reduced investments, lower capacity utilisation, and potential job losses,” she added.
The LCCI noted that Nigeria needs a more balanced approach that combines public health education, voluntary industry reformulation initiatives, improved product labelling, consumer awareness campaigns, and broader stakeholder engagement.
It further stated that such measures could help achieve health objectives while minimising adverse effects on industrial growth and employment.
The LCCI stated that government should consider similar policies in more advanced economies that were designed to encourage manufacturers to reformulate products by reducing sugar content.
“We need to design Sugar-Sweetened Beverage taxes that will be part of a broader public health strategy and carefully calibrated to avoid excessive disruption to industry and employment.
“We want to see manufacturers reformulate their products over a transition period rather than raise prices due to SSB taxes.
“A reformulation-focused tax may be more effective than a revenue-focused tax. Incentivising lower sugar content can achieve health objectives while preserving industrial activity.
“Policymakers must carefully assess impacts on agriculture, manufacturing, and supply chains before implementation, especially where industries support large numbers of jobs,” the chamber said.
Almona also urged the federal government and the National Assembly to undertake a redesign exercise through more technical engagement with manufacturers, health experts, organised private-sector groups, consumer associations, and other stakeholders to birth a tax policy that drives product reformulation that preserves sales and jobs.
“This will help ensure that public health objectives are pursued in a manner that preserves economic competitiveness, protects jobs, and supports sustainable industrial development,” she said.