Nigerian Economic Think Tank Warns Proposed Sugar Beverage Tax Expansion Threatens Manufacturing Sector Stability

Dr. Muda Yusuf of the CPPE warns that additional taxes on sugar-sweetened beverages could trigger job losses and disrupt Nigeria's industrial recovery.

By: AXL Media

Published: Mar 25, 2026, 9:53 AM EDT

Source: The information in this article was sourced from LEADERSHIP

Economic Think Tank Challenges Proposed Excise Expansion

The Centre for the Promotion of Private Enterprise, led by Director Dr. Muda Yusuf, has issued a formal warning against the implementation of an additional tax on sugar-sweetened beverages. This response comes following advocacy from Corporate Accountability and Public Participation Africa for higher levies on the sector. According to Dr. Yusuf, such a fiscal move would be counterproductive, acting as a punitive measure against an industry that is already grappling with extreme operational costs and a fragile recovery phase within the broader Nigerian economy.

Navigating The Friction Between Health Policy And Tax Reform

While the center acknowledges the public health motivations cited by proponents of the tax, it maintains that the current timing is incompatible with the national tax reform agenda. According to the CPPE, the federal government's primary objective should remain the reduction of the tax burden on private enterprises to foster a more efficient investment climate. The organization contends that introducing new levies on manufacturers during an ongoing economic recovery could inadvertently stifle job creation and disrupt the growth trajectories of established industrial players.

The Operational Burden Of Energy Intensive Manufacturing

A significant portion of the opposition stems from the highly energy-dependent nature of the beverage production process. Dr. Yusuf pointed out that the industry relies heavily on consistent power and fuel for water purification, bottling, and regional distribution. According to the CPPE leadership, the convergence of rising energy costs and high logistics expenses has already pushed the sustainability of many businesses to a breaking point. Adding a specialized tax on top of these existing macroeconomic pressures is viewed by the center as a potential catalyst for industry-wide insolvency.