The Manufacturers Association of Nigeria (MAN), speaking on behalf of the Non-Alcoholic Drinks (NAD) sector, has urged the Federal Government to adopt a coordinated and evidence-based approach to excise taxation, warning that plans to increase taxes on sugar-sweetened beverages (SSBs) could have far-reaching consequences for Nigeria’s economy.
The association in statement signed by its Director-General, Mr Segun Ajayi-Kadir, expressed concern over provisions contained in the proposed Customs and Excise Tariff (Consolidation) Act Amendment (CETA) Bill 2025, which seeks to replace the current excise duty of ₦10 per litre on SSBs with a percentage levy based on retail prices.
According to MAN, while the industry supports government efforts to improve public health and boost revenue generation, fiscal policies must be carefully designed to avoid undermining industrial growth, employment generation, and investor confidence.
The association noted that the non-alcoholic drinks sector remains one of the strongest pillars of Nigeria’s manufacturing industry, contributing about 33 percent of total manufacturing output and supporting more than 1.5 million direct and indirect jobs across agriculture, production, transportation, retail, and small businesses adding that despite facing significant challenges such as high inflation, foreign exchange shortages, and rising energy costs, the sector has continued to contribute substantially to government revenue.
Pointing out that remittances from the industry increased from ₦123 billion in 2022 to ₦127 billion in 2023, the association stressed that many operators are already burdened by heavy taxation, with companies reportedly remitting between 40 and 45 percent of their gross revenues in various taxes noting that in some cases, firms have been forced to pay taxes from capital rather than profits, raising concerns about business sustainability.”
The association cited projections by PricewaterhouseCoopers (PwC), indicating that a further 10 to 20 percent increase in excise duties could reduce the sector’s Gross Value Added from ₦14.3 trillion to ₦11.5 trillion by 2030, while potentially reducing employment from about 1.5 million jobs to 1.2 million or less.
On public health concerns, MAN maintained that policies should reflect Nigeria’s unique realities and be backed by local evidence.
The association argued that Nigeria’s annual per capita sugar consumption remains relatively low at approximately 7.1 kilograms, which it said falls within the limits recommended by the World Health Organization (WHO).
It further stated that sugar-sweetened beverages account for only a small proportion of total sugar intake and that there is no conclusive evidence linking SSB consumption as the primary cause of non-communicable diseases in Nigeria.
The manufacturers also raised concerns over what they described as increasing policy fragmentation in the country’s fiscal environment. According to the sector, the proposed CETA Bill risks creating a parallel excise framework that could undermine the recently introduced Fiscal Policy Measures (FPM) 2026–2028, which was designed to provide certainty and predictability for businesses.
MAN warned that conflicting fiscal policies could weaken investor confidence, complicate business planning, and reduce the effectiveness of key government initiatives such as the Nigeria First Policy and the Nigeria Sugar Master Plan (NSMP II).
The association also highlighted operational concerns with the proposed tax model, noting that Nigeria’s excise system is traditionally based on ex-factory or ex-warehouse pricing.
On a shift to retail-price-based taxation, it argued that such a development could create significant administrative and enforcement challenges for both regulators and manufacturers emphasizing that any increase in excise taxes would affect the entire value chain, from farmers and manufacturers to distributors, retailers, and consumers.
It therefore warned that higher taxes could reduce consumer demand, lower production volumes, and negatively impact thousands of small businesses that depend on beverage sales for survival.
The association further cautioned that rising beverage prices could force low-income consumers to seek cheaper, unregulated alternatives, potentially creating unintended public health risks.
Drawing lessons from international experiences, MAN pointed to countries such as Mexico, South Africa, and Finland, where similar tax policies reportedly resulted in job losses, business closures, and limited health benefits.
To address its concerns, the association called on the federal government, particularly the Ministry of Finance, to engage the National Assembly to ensure fiscal policy coherence and avoid overlapping tax frameworks.
Among its recommendations were the withdrawal of the proposed CETA Bill, preservation of the Fiscal Policy Measures framework, stronger executive coordination of excise policies, broader stakeholder consultations, and the development of a long-term excise roadmap that balances public health objectives with industrial growth and employment protection.
MAN reiterated its commitment to working with the government to achieve Nigeria’s economic transformation goals, stressing that the country can pursue both public health and economic stability through data-driven, predictable, and collaborative policymaking.
PHOTO: Segun Ajayi-Kadir, Director General, Manufacturers Association of Nigeria (MAN).