KEY POINTS

• LCCI warns the Senate’s SSB tax bill could deepen the strain on Nigeria’s manufacturers.
• The chamber says new beverage taxes may raise production costs, fuel inflation and reduce demand.
• It urges a reformulation-focused approach over a revenue-driven tax, plus wider consultations.

The Lagos Chamber of Commerce and Industry has warned that the Senate’s passage of the Sugar-Sweetened Beverage Tax Bill could worsen the challenges facing Nigeria’s manufacturing sector. In a statement on Sunday, the chamber backed efforts to address public health concerns around excessive sugar consumption, yet it cautioned that such interventions should not pile undue burdens on businesses and consumers.

Higher costs across the value chain

LCCI Director General Dr. Chinyere Almona noted that manufacturers already grapple with high energy costs, exchange rate volatility, elevated interest rates, logistics bottlenecks, multiple taxation and weak consumer purchasing power. According to her, additional taxes on beverage makers would likely raise production costs, which firms can ultimately pass on to consumers through higher prices.

“This may further worsen inflationary pressures and reduce demand for locally manufactured products,” she said. Furthermore, Almona warned that the tax could ripple across industrial value chains, hitting suppliers, distributors, transport operators, retailers, farmers and service providers linked to the beverage industry. Consequently, she said any drop in production volumes could trigger lower investment, reduced capacity utilization and potential job losses.

A reformulation-focused alternative

Instead, Almona advocated a more balanced approach that combines public health education, voluntary product reformulation, improved labeling, consumer awareness campaigns and broader stakeholder engagement. According to her, experiences from more advanced economies show that similar policies primarily aim to push manufacturers toward cutting sugar content rather than simply raising revenue.

Therefore, she argued that Nigeria’s SSB tax framework should form part of a wider public health strategy and stay carefully calibrated to limit disruption to industry and employment. “We want to see manufacturers reformulate their products over a transition period rather than simply raise prices due to SSB taxes,” she said. Moreover, she stressed that “a reformulation-focused tax may be more effective than a revenue-focused tax, as it can achieve health objectives while preserving industrial activity.”

Finally, Almona urged the Federal Government and the National Assembly to redesign the policy through wider consultations with manufacturers, health experts, organized private sector groups, consumer associations and other stakeholders. In her view, that collaborative process would help the country protect public health while it safeguards jobs and industrial output.