Thinkbusiness Africa challenges CAPPA’S proposed sugar-tax hike in Nigeria

THINKBUSINESS Africa, a leading voice in economic analysis and policy advocacy, is challenging the assertions made by the Corporate Accountability and Public Participation Africa (CAPPA) in its report regarding the proposed increase in Sugar-sweetened Beverages (SSBS) tax in Nigeria.

In a report released by Thinkbusiness Africa, titled “Thinkbusiness Africa Insight Series April 2024: CAPPA, Sugar-sweetened Beverages (SSBS) Tax, and Fiscal Policy in Nigeria”, Thinkbusiness said the objectives of potential staggering increases in SSBS tax in Nigeria would not be achieved based on the CAPPA report.

CAPPA had in its report canvassed for an increase in SSB tax from N10 per litre to N130 per litre which represents a 927 percent increase in the current revenue from SSBS taxes in Nigeria. The report thus suggests that an increase in SSBS taxes from the current estimates of N68 billion to N729 billion annually is required to deliver a 5 percent reduction in Body Mass Index (BMI) in Nigerians over a 5-year period.

Ogho Okiti, chief executive officer, Thinkbusiness Africa, asserted that his firm’s latest report was careful to stress that what the CAPPA report has established is a correlation and not causation.

“Using increases in SSBS taxes, assuming to deal with causation, when that has not been established, will not achieve the desired result but would have heaped heavy and unbearable tax burden on the Food & Beverage sector in the Nigerian economy”, he pointed out.

“It is staggering considering that the federal government’s planned health budget in 2024 is just above N1.2 trillion. If CAPPA does have its way, the government will receive about 60 percent of its health budget from the increases in SSBS taxes. In the context, increases in SSBS taxes is not just funding the control of the growth in obesity and diabetes, but funding over half of federal government expenditure on health”, he added.

Okiti also asserted that the Thinkbusiness Africa’s report sought to stress that the underlying data for the computation and estimation by CAPPA was weak and may lead to a “triggerhappy fiscal policy” approach if adopted by the government.

He further stated that “Acting on the CAPPA report will not deliver the objective of curtailing the rise but will also destroy the investments, revenues, and jobs in the non-alcoholic sector in Nigeria.”