NIGERIA – The Nigerian government is reportedly contemplating the suspension of its tax on sugary drinks to alleviate pressure on manufacturers struggling in the inflation-hit nation.
The levy introduced two years ago currently stands at N10 ($0.0061) per litre on sweetened beverages and was aimed at addressing health issues like obesity and diabetes.
Nigeria’s Minister of Finance Wale Edun disclosed plans to suspend the tax during a meeting with the National Action on Sugar Reduction (NASR) group.
Edun emphasized that the measure is intended to help beverage companies navigate the current economic difficulties without collapsing.
“The temporary suspension of the sugar tax is seen as a measure to stabilize the economy and support the beverage industry during this critical period,” Edun told NASR members.
Nigeria has been grappling with severe economic challenges, including a devalued currency, high inflation, and a cost-of-living crisis. The naira has depreciated significantly, losing more than 50 percent of its value against the dollar in the past year.
Richard Wyborn, a partner at Food Strategy Associates, highlighted the acute economic issues faced by companies in Nigeria due to these conditions. With an inflation rate of approximately 34 percent, Nigeria is experiencing one of its worst cost-of-living crises in years.
The government is striving to stabilize the economy, and the proposed suspension of the sugar tax is part of these efforts.
The World Health Organization (WHO) has previously advocated for higher taxes on sweetened beverages and alcoholic drinks to encourage healthier behaviors.
According to WHO, 108 countries have implemented some form of tax on sugar-sweetened beverages. However, on average, these excise taxes only account for 6.6 percent of the price of soda globally.
The United Kingdom introduced a sugar tax in 2018, with a levy of 18p per litre for drinks containing five to eight grams of sugar per 100ml, and 24p per litre for those with more than eight grams of sugar per 100ml.
Similarly, the Dutch government is revising its taxation of sugar in non-alcoholic beverages, which could extend to soy-based drinks, water, and dairy. Since 1993, the Netherlands has applied a flat rate of €26.13 (US$27.96) per 100 litres to all non-alcoholic drinks, regardless of sugar content.
Italy has also planned a sugar tax, initially set out in 2020, but its implementation has been delayed multiple times and is now scheduled for July 2025.
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