CPPE rejects Senate proposal to raise excise duty on non-alcoholic beverages
...warns of job losses, economic disruptions
By Seun Ibiyemi
The Centre for the Promotion of Private Enterprise (CPPE) has raised strong objections to the proposal by the Senate Committee on Finance to amend the Customs and Excise Act to increase excise duty on non-alcoholic beverages, warning that the move could undermine Nigeria’s fragile economic recovery and trigger widespread job losses.
In a statement issued on Monday, CPPE Director/CEO Dr. Muda Yusuf described the initiative as “economically disruptive, socially harmful, procedurally flawed, and inconsistent with Nigeria’s industrial policy objectives.”
The organisation noted that the manufacturing sector, already strained by inflation, rising production costs, foreign exchange volatility, and weak consumer demand, cannot withstand another round of fiscal pressure.
According to the CPPE, prices of non-alcoholic beverages have surged by 200–300 per cent over the past three years, largely due to inflationary trends and previous tax adjustments. Many small and medium-sized enterprises (SMEs) within the beverage value chain are reportedly “barely staying afloat,” and any further excise increase could lead to factory closures, reduced output, and significant layoffs.
The group emphasised that the policy’s impact would extend beyond manufacturers. Higher taxes, it warned, would push retail prices upward, worsen the cost-of-living crisis for millions of Nigerians, and ultimately reduce government revenue as declining consumption offsets tax gains.
“Countries that implemented sudden excise hikes on similar products later recorded revenue shortfalls,” the CPPE added.
Beyond economic risks, the organisation expressed deep concern over the manner in which the proposal was initiated. It questioned the involvement of the Senate Committee on Finance and the Minister of Health in spearheading a fiscal policy matter traditionally handled by the Minister of Finance.
The CPPE noted that several critical Senate committees. including Industry, Customs, and Trade & Investment were not adequately consulted, calling the process “procedurally inconsistent and harmful to investor confidence.”
While acknowledging public health concerns regarding sugar consumption, the CPPE argued that targeting non-alcoholic beverages alone is “narrow and inequitable.”
It pointed out that pastries, confectionery, bread, milk drinks, and carbohydrate-heavy staples also contribute significantly to sugar-related health risks.
The Policy group urged the government to adopt broader, evidence-based public health strategies such as nutrition education, improved food labeling, and support for physical activity campaigns.
After consultations with industry leaders and economic analysts, the CPPE outlined its position, calling for the immediate withdrawal of the proposed amendment. It insisted that excise rate-setting should remain an administrative rather than a legislative function to allow for flexibility in response to economic conditions.
The organisation further urged the Presidency and the Ministry of Finance to safeguard fiscal policy coherence, while calling on the Ministry of Health to work with manufacturers and civil society to promote healthier consumption patterns without resorting to punitive taxation.
“Nigeria is navigating a delicate economic recovery,” the CPPE stated. “The manufacturing sector needs stabilising policies, not those that worsen operating conditions or threaten jobs.”
Dr. Yusuf concluded with a call for a “collaborative, evidence-based, and economically sensitive approach” to public health and industrial development.