CAPPA Asks FG to Increase SSB Tax from N10 to N130 Per Litre

Dike Onwuamaeze

The Corporate Accountability and Public Participation Africa (CAPPA),  has called on federal government to increase the tax imposed on Sugar Sweetened Beverages (SSBs) from N10 per litre to N130 per litre or by any rate that is not less than 20 per cent of the product’s retail price.

The CAPPA made the call yesterday during the “Journalism Training on Effective SSB Tax and Industry Monitoring” thay was held in Ikeja, Lagos State.

The Executive Director of CAPPA, Akinbode Oluwafemi, said that studies have shown that close to 30 per cent of annual deaths in Nigeria were due to Non-Communicable Diseases (NCDs), which are primarily linked to unhealthy diets, particularly the consumption of sugar-sweetened beverages (SSBs), also known as “soft drinks”.

Oluwafemi said: “The high rates of obesity, diabetes, hypertension, and other cardiovascular diseases highlight a health crisis in Nigeria, with over 11 million Nigerians currently living with diabetes.

“Nigeria’s status as the fourth-largest consumer of soft drinks globally is concerning and is a looming health epidemic if not addressed promptly.

“The adverse effects of these preventable diseases on productivity, revenue loss, and human lives underscore the urgency for effective policy solutions.”

The Research Officer, Centre for the Study of the Economies of Africa (CSEA), Mr. Fidelis Obaniyi, in his paper titled “SSBs and Economic Impact on Household: Cost of Disease and Effective Taxation,” said that higher taxes on unhealthy products like SSBs would reduces their consumption shifts consumption towards healthier options, thereby reducing long-term healthcare costs.

Obaniyi identified excise tax aimed at reducing consumption of harmful products as one of effective SSB Tax.

He said: “It has been implemented by over 100 governments globally, including Mexico, California (USA), South Africa, Nigeria (tax of N10 per litre in 2021), etc., to combat health issues like obesity and diabetes and increase government revenue.

“Studies suggest that SSB taxes can effectively improve public health by reducing consumption, encouraging healthier beverage choices, and potentially generating revenue for health promotion initiatives.

“For instance, in South Africa, a 20 per cent tax on SSBs was predicted to avert 8,000 type 2 diabetes-related premature deaths over 20 years.

“A 20 per cent tax on SSBs was predicted to reduce obesity prevalence by more than 3 per cent in men and more than 2.0 per cent in women.

“We observe that the per capita consumption of SSBs is expected to decrease by 30 per cent for males and 9.0 per cent for females due to the tax induced increase in the retail price.”

He projected an annual decrease of 29 per cent for aggregate consumption of SSBs in Nigeria following a practical implementation of the SSB Tax

“The results of the tax simulation show that the excise tax revenue is projected to increase by about 972 per cent, amounting to N729 billion.

“Such fiscal revenue could be earmarked for improving Nigeria’s health system.

To mitigate the economic and health impacts of unhealthy food, Nigeria should increase and enforce an SSB tax, promote public awareness about the health risks associated with SSB consumption, use tax revenues to support healthcare and disease prevention programs.

“The economic impacts of unhealthy food are profound, including direct healthcare costs and broader societal implications.

“An SSB tax is a viable policy intervention that can improve public health, reduce healthcare costs, and generate revenue for further health initiatives.

“While the tax of N10 per litre on SSB in Nigeria is a good beginning, the tax rate must be improved to have a significant fiscal and health impact,” Obaniyi said.

The SSB Tax Project Officer, CAPPA, Ms. Opeyemi Ibitoye, said: “Global recommendation on SSB Tax is at least 20 per cent increase in the final retail price in order to significantly reduce habitual consumption.

“What we are saying is that government should focus on health on health and not on commercial profits.”

A Public Health Consultant, University College Hospital, University of Ibadan, Dr. Francis Fagbule, in his paper titled “Sugar-sweetened Beverages and Non-Communicable Diseases Burden in Nigeria,” emphasised preventive measures because of the expensive nature of managing and curing non-communicable diseases.

Fagbule said: “A group of conditions that are not mainly caused by an acute infection, result in long-term health consequences and often create a need for long-term treatment and care.

“Evidence shows a growing burden of NCDs facing Nigerians.”