Levy on sweetened drinks will exacerbate challenges faced by producers, says Lagos Chamber of Commerce and Industry

n n

LCCI

n

By Yinka Kolawole

n

The Lagos Chamber of Commerce and Industry (LCCI) has warned that the passage of the Sugar-Sweetened Beverage (SSB) Tax Bill by the Senate could worsen challenges facing Nigeria’s manufacturing sector.

n

In a statement yesterday, Director General of LCCI, Dr Chinyere Almona, while expressing support for efforts to address public health concerns associated with excessive sugar consumption, said interventions should not impose undue burdens on businesses and consumers.

n

Almona noted that manufacturers were already grappling with high energy costs, exchange rate volatility, elevated interest rates, logistics bottlenecks, multiple taxation and weak consumer purchasing power.

n

According to her, the introduction of additional taxes on beverage manufacturers is likely to increase production costs, which can ultimately be passed on to consumers through higher prices.

n

“This may further worsen inflationary pressures and reduce demand for locally manufactured products,” she stated.

n

The LCCI boss also said that the tax could have unintended consequences across industrial value chains, affecting suppliers, distributors, transport operators, retailers, farmers and service providers linked to the beverage industry.

n

She added that any decline in production volumes resulting from increased taxation could lead to lower investments, reduced capacity utilisation and potential job losses.

n

Almona advocated a more balanced approach that combined public health education, voluntary product reformulation, improved product labeling, consumer awareness campaigns and broader stakeholder engagement.

n

She noted that experiences from more advanced economies showed that similar policies were designed primarily to encourage manufacturers to reduce sugar content in products.

n

According to her, Nigeria’s SSB tax framework should form part of a broader public health strategy and be carefully calibrated to minimise disruption to industry and employment.

n

“We want to see manufacturers reformulate their products over a transition period rather than simply raise prices due to SSB taxes.

n

“A reformulation-focused tax may be more effective than a revenue-focused tax as it can achieve health objectives while preserving industrial activity,” Almona stressed.

n

She urged the Federal Government and the National Assembly to undertake a redesign of the policy through wider consultations with manufacturers, health experts, organised private sector groups, consumer associations and other stakeholders.

n n