The collateral damage of this tax won’t be limited to the manufacturing sector alone. The burden will disproportionately fall on lower-income consumers who rely on SSBs as a staple in their diet due to limited access to fresh produce amidst soaring inflation rates. The proposed tax and the inflation crisis will further erode their purchasing power, leading to higher prices for essential goods and services. The vicious cycle of deprivation and scarcity will only worsen, pushing Nigeria deeper into food shortage nightmares.

As seen in Denmark’s case, the increase in the tax on SSBs can lead to inflation, which will affect the purchasing power of consumers and result in higher prices for other goods and services. This is counter-productive because the country is currently facing one of its worst inflation crises, and a further increase in everyday commodities would only cause more.

Moreover, the government should consider the potential decline in tax revenue resulting from increased taxes. Higher prices may lead to reduced consumption, which in turn could lead to a decrease in sales volume. As a result, the projected revenue increase from the tax hike may not materialize, adversely affecting the government’s ability to fund essential public services and initiatives.

Rather than resorting to punitive taxation, a more holistic approach should be adopted to address public health concerns. Educating the public about balanced diets, promoting physical activity, and encouraging healthier lifestyle choices should be at the forefront of any strategy. Collaborative efforts between government agencies, NGOs, and the private sector can contribute to creating awareness and driving positive behavioural changes.

While there has been a slight decline in SSB purchases following the implementation of sugar taxes in other countries, there is no concrete evidence to suggest a significant improvement in citizens’ health and nutrition. These taxes often fail to deliver their intended results, and Nigeria should instead focus on proven strategies that yield better outcomes for the population.

A behavioural approach that rewards healthier choices through improved healthcare and agricultural subsidies is a more effective and sustainable solution. By incentivizing farmers to adopt organic farming practices, investing in research for sustainable agriculture, and supporting local farmers’ markets, the government can make nutritious food more accessible and affordable for all while supporting small-scale farmers.

While it is important to address public health challenges, a knee-jerk reaction to increasing taxes on sugar-sweetened beverages is not an effective or equitable solution. Nigeria’s sugar consumption should be examined comprehensively, taking into account overall dietary patterns. Unsubstantiated claims and punitive taxation can have far-reaching negative consequences for businesses, consumers, and the national economy.

Rather than focusing solely on taxation, we should advocate for a multi-faceted approach that includes education, lifestyle changes, and agricultural interventions. By working together, we can achieve a healthier nation while also safeguarding economic growth, consumer choice, and the national reputation of Nigeria.

Concluded

Ajayi-Kadir is the Director General, Manufacturers Association of Nigeria (MAN).