The Centre for the Promotion of Private Enterprise (CPPE) has issued a strong condemnation of a proposal by the Senate Committee on Finance to raise excise duties on non-alcoholic beverages. The centre labelled the plan as a threat to Nigeria's fragile economic recovery and a potential trigger for job losses.
An Ill-Timed and Damaging Proposal
In a policy brief signed by its Chief Executive Officer, Dr. Muda Yusuf, and released to the media on Monday, 1 December 2025, the CPPE argued the move is economically disruptive, socially harmful, and procedurally flawed. The centre stressed that manufacturers and small businesses are already struggling with severe macroeconomic pressures, including inflation, high energy costs, and foreign exchange volatility.
The CPPE highlighted that the non-alcoholic beverage sector has endured massive shocks over the past three years, absorbing multiple tax changes and soaring operating costs. As a result, prices for these drinks have skyrocketed by 200 to 300 per cent. "Many operators are struggling to stay afloat," the brief stated, noting that small and medium enterprises (SMEs) in the value chain face collapsing margins and falling sales.
Ripple Effects: Inflation, Job Losses, and Revenue Decline
The centre warned that the proposed tax hike would have consequences far beyond the beverage industry. Any additional levy would be passed directly to consumers, worsening the cost-of-living crisis for millions of households. This would further fuel inflation in the consumer goods market.
Other critical risks identified by the CPPE include:
- A direct threat to jobs and livelihoods across the manufacturing and distribution chain.
- A potential decline in government revenue as higher prices could suppress demand and reduce overall tax yield.
- Increased pressure on small businesses, potentially leading to more factory closures.
"The Nigerian economy cannot afford another wave of factory closures or layoffs at this delicate moment of recovery," the CPPE emphasised.
Procedural Flaws and a Call for Holistic Health Policy
The CPPE also raised serious concerns about the process behind the proposal. It noted that excise tax policy is typically under the purview of the Minister of Finance, yet this initiative appears driven by the Senate Committee on Finance and the Minister of Health. Key committees on Industry, Customs, and Trade were not fully consulted, and there was no visible economic impact assessment or stakeholder engagement.
On the public health rationale often cited for such taxes, the CPPE argued that targeting only non-alcoholic beverages is narrow and unfair. Sugar consumption in Nigeria comes from a wide range of products like pastries, bread, and confectionery. The centre advocates for a broader strategy focused on nationwide nutrition education instead of punitive taxation.
Based on its review, the CPPE made several key recommendations:
- The proposed excise duty increase should be discontinued immediately.
- Excise rate-setting should remain an administrative function, not legislated, to maintain policy flexibility.
- The government should prioritise public health education over taxation.
- Stronger collaboration between the government and manufacturers is needed to promote healthier, low-sugar product variants.
The CPPE concluded by urging the Senate to reconsider, calling on the Presidency and Finance Ministry to reaffirm executive authority over excise rates, and asking the Health Ministry to focus on non-tax health interventions. "A collaborative, evidence-based, and economically sensitive approach remains the best path forward," the centre stated.
