LCCI: Sugar tax will worsen manufacturers’ situation

By Yinka Kolawole

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

In a statement released yesterday, LCCI Director General Dr Chinyere Almona expressed support for efforts to tackle public health concerns linked to excessive sugar consumption, but cautioned that interventions should not impose undue burdens on businesses and consumers.

Almona highlighted that manufacturers are already dealing with high energy costs, exchange‑rate volatility, elevated interest rates, logistics bottlenecks, multiple taxation and weak consumer purchasing power.

She argued that adding further taxes on beverage manufacturers would raise production costs, which could ultimately be passed on to consumers through higher prices.

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

The LCCI chief also warned 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.

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

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

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

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.

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

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

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