The Lagos Chamber of Commerce and Industry (LCCI) has raised concerns over the Senate’s passage of the Sugar-Sweetened Beverage (SSB) Tax Bill, warning that the measure could place additional pressure on Nigeria’s already struggling manufacturing sector.
In a statement issued on Monday in Lagos, the Director-General of the LCCI, Dr Chinyere Almona, said while the chamber supports initiatives aimed at improving public health, such policies should be designed in a way that does not undermine businesses or increase hardship for consumers.
She noted that manufacturers are currently contending with numerous challenges, including high energy costs, exchange rate instability, rising interest rates, logistics constraints, multiple taxation and weak consumer purchasing power.
According to Almona, imposing additional taxes on beverage producers is likely to raise production costs, which could eventually be transferred to consumers through higher product prices.
“This may further worsen inflationary pressures and reduce demand for locally manufactured products,” she said.
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The LCCI chief warned that the effects of the tax could extend beyond beverage manufacturers, impacting suppliers, distributors, transport operators, retailers, farmers and other businesses linked to the industry’s value chain.
She explained that reduced production resulting from higher taxation could discourage investment, lower capacity utilisation and potentially lead to job losses across the sector.
Almona advocated a more balanced policy approach that combines public health education, consumer awareness campaigns, improved product labelling, voluntary product reformulation and extensive stakeholder consultations.
She pointed out that in several advanced economies, similar tax policies were introduced primarily to encourage manufacturers to reduce sugar content in products rather than generate revenue.
According to her, Nigeria’s SSB tax framework should be integrated into a broader public health strategy and carefully structured to minimise negative effects on industry and employment.
“We want to see manufacturers reformulate their products over a transition period rather than simply raise prices due to SSB taxes.
“A reformulation-focused tax may be more effective than a revenue-focused tax as it can achieve health objectives while preserving industrial activity,” she said.
Almona further urged policymakers to thoroughly assess the likely implications of the tax on agriculture, manufacturing and supply chains before implementation, particularly in sectors that provide significant employment opportunities.
She called on the Federal Government and the National Assembly to review the policy through wider consultations involving manufacturers, health experts, organised private-sector groups, consumer associations and other stakeholders.
“Such engagement will help develop a tax framework that promotes product reformulation while preserving sales, jobs and industrial competitiveness,” she said.
She added that a collaborative approach would ensure public health goals are achieved without undermining economic competitiveness, employment and sustainable industrial development.
“We urge the Federal Government and the National Assembly to undertake a redesign exercise through more technical engagement with manufacturers, health experts, organised private-sector groups, consumer associations, and other stakeholders to birth a tax policy that drives product reformulation and preserves sales and jobs.
“This will help ensure that public health objectives are pursued in a manner that preserves economic competitiveness, jobs, and supports sustainable industrial development,” she added.
