Prices of Coke, Pepsi, Other Beverages to Crash as FG Suspends Sugar Tax, Manufacturers React

Beverage Manufacturers Association of Nigeria and other stakeholders had commended the government for halting planned increase in excise duties on sugar-sweetened beverages (SSBs). It is considered a vital project for the life of our sector, and it should lead to increased business activity and product variety. A coalition of NGOs, National Action on Sugar Reduction (NASR), hosted the Minister of Finance and Economic Planning Wale Edun in Abuja where he launched government economic recovery plan

Edun insisted that the route of suspension on sugar tax was part and parcel of an overarching policy to salvage workers, in particular from layoff threatening closure which could but cripple econonic diversification programme,promote growth throughout key industries within regions while coping with shackles tying down Nigerian farmers. He stated the government would provide a good environment for business, and support the beverage industry in overcoming today’s economic struggles.

The proposal to raise SSB taxes was hotly contested, many argued that increasing the tax would create losses for both producers and consumers. Critics of the tax argue that it is selective regarding sweetened beverages and would weaken businesses as well as employment Disagreements over Complementary Taxenefit Buffer Governor Tom Wolf has tabled negotiations with Republican-controlled General Assembly intelligence. With it, the sugar tax has been shelved as authorities try to balance public health and fiscal objectives.

The government in Nigeria announced that it plans to introduce a 20% tax on drinks with added sugar this February. Its key targets were to address the increase in non-communicable diseases and reduce consumption of sugar-sweetened beverages. Chukuma Anyaike, deputy director of the Ministry of Health and Social Welfare’s Public Health Department said he will release a simulation study on how Nigeria may benefit more with economic gains if such SSB tax is implemented.

The resumption of production has been met with relief from producers and operators in the beverage industry that a turnaround is on the horizon. This they feel, will create a kind of environment which enables growth and investment to happen, leading towards employment generation. By doing so, the price-fixing will be also stabilized and thus diluted prices for beverages are expected. This may lead to more sales and economic activity in general.

The removal of the tax on sugar is in line with its economic agenda. Local enterprises are being supported by the government to reduce costs and increase competitiveness in order accelerate economic growth. It is also a reminder of the importance for politicians to engage with industry players in order to ensure economic policies are both equitable and sustainable.

With the beverage industry adapting to this new reality, it will probably aim at creating fresh tactics to approach nutritional issues provoked by the consumption of sugar. Moving forward, the government, health organizations and industry partners will have to establish new systems on how best they can protect public health without halting economic development.