Why Nigeria needs a sugar tax, by experts

• Say reduction in consumption of sweetened beverages will lead to decrease in sudden deaths, chronic diseases
• Urge govt to use 90% of revenue generated from Sin tax to improve health care, social insurance

Despite growing opposition to the recently introduced ‘Sugar Tax’ by the National Assembly, medical experts have provided reasons why Nigeria needs a sugar tax.

According to the Sugar Sweetened Beverage (SSB) industry, the introduction of sugar tax, that is 10 per cent on every one litre of sugar drink, will lead to loss of jobs and livelihoods to millions of already impoverished Nigerians. But the medical experts say the increasing consumption of SSB has led to rise in chronic and non communicable diseases (NCDs) such as diabetes, kidney failure, cardiovascular diseases and cancer as well as sudden death.

The medical experts made their submissions at the first of three Webinar Series on Nigeria Pro Health Tax, titled ‘Dies Nigeria Need a Sugar Tax’, held on Tuesday January 25, 2022, by Nigeria Health Watch. The event was supported by National Action on Sugar Reduction, Healthcare Federation of Nigeria and Nigeria Cancer Society.

Senior Health Specialist for World Bank, Dr. Kate Mandeville, who spoke from Beinjing China, on ‘Why Nigeria needs a sugar Tax’ said: “This is a huge step forward. I know there will be opposition. Many countries have joined in introducing sugar tax because they have seen how important it is to improve health of the population and revenue.”

Mandeville said 66 countries all over the world now have target excise tax, meaning there is difference in price between sugary drinks and ordinary water.

Why are countries targeting sugar drinks! “There is no nutritious benefit. They spoke blood glucose quicky and affect metabolism thereby causing diabetes and metabolic syndrome. If you take sugar drink, it is not compensated anywhere because it goes straight into the blood stream.”

The health specialist said in comparison with tobacco and alcohol, the evidence now that SSB causes chronic diseases and sudden death is solid.

She, however, said the concern is that consumption of SSB is increasing despite the evidence that it causes cancer, diabetes, tooth decay and many others.

Mandeville said as consumption drops off in developed countries, there is rise in developing countries.

She explained: “Mexico uniform SSB tax imposed 12 per cent increase in cost. There is a debate in Nigerian what products will be included. The Mexico example can be taken. There was considerable reduction in sales and there was no negative effect on employment. There was decrease in weight of adolescent girls and 43 per cent decrease in consumption.”

The medical experts said there are complementary measures Nigeria can take that worked in other countries such as Mexico and South Africa. These, she said, include: raising public awareness on why SSB are unhealthy and their consumption should be reduced, increasing retail prices, and incentivising non price industry response such as reformulation, resizing and so on.

Mandeville also said placing tax on SSB can help government generate revenue like in South Africa, which has successful tax regime.

“Another success story is the United Kingdom (U.K.), my country. It has become evident that SSB tax can evolve. It is possible to do that in Nigeria. It means those SSBs with higher sugar content will have higher taxes and those with lower sugar content will have lower taxes. It worked well in UK because the volume of business did not change. So people will still drink SSB but switched from higher sugar-/higher cost to lower sugar/lower cost,” she said.

Another Senior Health Specialist at the World Bank and the moderator of the webinar, Dr. Olumide Okunola, said South Africa and Mexico make $140 million and $250 million yearly from sugar tax. He said this may look small compared to tobacco and alcohol but it is significant in raising additional funds for government.

“For Nigeria, all these add up to N2.50 Kobo to a bottle of Coca Cola. It is still very small. So we have to make sure that vtear on year that we are able to raise the tax,” he said.

Minister of State for Health, Dr. Olirunnimbe Mamora, in his remarks, said: “Sin Tax, Pro Health Tax or Pleasure Tax. These are the different names. We are all aware of the scarce resources available to us as a nation. Even with scare resources, there are competing needs. We have important role to play in exploring mechanism to galvanise extra revenue for the health sector in providing services not just for physical structure but for services rendered by human resource. Not just mobilise these resources but to make sure that they are are re-invested on health sector on sustainable basis.

“Pro health tax is a low hanging fruit because we can use it to reduce the burden of NCDs.”

The medical doctor added: “The realities of diminishing resources are with us and we have no choices than to act now and in doing that we have to commit ourselves more than before to enlist support of all the stakeholders so that we establish partnerships that will help us push this very important issue. In so doing, we are not just working for ourselves but for a healthier society and that will definitely improve the productivity of the system. Most importantly, gathering the resources and using them sustainably “

A consultant cardiologist and Executive Director, Nigerian Heart Foundation (NHF), Dr. Kingsley Kola Akinroye, said poor dietary habits tend to encourage NCDs but a reduction of SSB intake will lead to reduction of NCDs. “Excessive consumption of SSB is affecting the health system. Effective implementation of 10 per cent tax on per litre of SSB is a step in the right direction. If we invest $1 per person we are going to save 700 million lives, according to the World Health Organisation (WHO). This will increase life expectancy and healthy revenue. Majority of the funds that will be generated from the sugar tax should be used on 120 million Nigerians living with NCDs and the health system,” Akinroye said.

President, Healthcare Federation of Nigeria, Dr. Pamela Ajayi, said the sugar tax is a health tax otherwise known as Sin tax that helps to improve population health through reduction in consumption of unhealthy products.

Ajayi said there are compeling evidence that Sin tax works. She said a reduction in sugar use does not affect anyone whose job is related. “Like the advertising agency can find new products to advertise. How do we understand who are affected? Those who involve in sugar farming, retailing and wholesaling. In fact, we import most of our sugar because we don’t produce and process sugars in Nigeria, so the impart will be very low. A certain reduction of sugar in these products will go a long way. It is a huge plus for us that we can get a reduction in foreign exchange lost to important of sugar and sugar products. In Phillipines it led to tripled resources and equity in health insurance for the poor. We need additional funds for social health insurance. This is actually a huge plus for us if the funds are properly used in healthcare,” she said.

Meanwhile, Okunola faulted the argument that sugar tax disappropriately affect the poor and vulnerable and that they suffer greatly because there is no social protection in Nigeria. He, however, said sugar tax serves as a disincentive because as people reduce consumption of SSBs and they do not get diabetes, renal failure and cancer, one would have taken them out of poverty.

Chief Executive Officer, Nigeria Health Watch, Vivianne Ihekweazu, said Sugar Sweetened Beverages are one of the main drivers of obesity and Diabetes Mellitus (DM) in Nigeria. She said data indicate that the prevalence of DM in Nigeria is about six per cent suggesting that 11.2 million Nigerians (one out of every 17 adults) are living with the disease.

Ihekweazu said the webinar aim to provide background information on SSB taxes, the evidence base for their use in reducing consumption of SSB and provide insight into international experiences in the introduction of SSB taxes.

Ihekweazu said the webinar as to present an overview of the newly introduced ‘sugar tax’ in Nigeria and highlight potential opportunities to amplify the health benefits of the tax through earmarking as well as identify and discuss strategies to overcome industry opposition to SSB taxes.

Special Guest of Honour, Chairman of FATE Foundation and co-founder of Guaranty Trust Bank (GTB), Fola Adebola, said: “It is part of what makes a society, pursuing what is greater than us because we are thinking of how the society can be better. Reducing tobaccy, alcohol and sugary beverage can prevent sudden deaths in Nigeria. Prevention is better than cure. If we find people healthy and alive, our output and productivity are improved. I am suggesting that whatever revenue should be put into improvement in welfare of our citizens. I align with the policy, which though underutilised but highly effective. These taxes should be chaneled into the improvement of the health ecosystem so that when consumers fall sick, we should have facilities to take care of them. Illness and death are bad job providers and thus counters the argument that people will lose jobs. I support the policy. The obstacles are very high but we will scale them,” he said.