By: Tijani Salako.

The Lagos Chamber of Commerce and Industry has expressed concern over the passage of the Sugar-Sweetened Beverage Tax Bill by the Senate, warning that the policy could worsen the challenges already facing Nigeria’s manufacturing sector.

This was disclosed in a press statement issued by the Director-General of the Lagos Chamber of Commerce and Industry, Dr. Chinyere Almona, who stated that while the chamber acknowledged the government’s objective of addressing public health concerns linked to excessive sugar consumption, policymakers must also consider the wider economic implications of the tax.

According to the chamber, public health interventions should be carefully designed to achieve intended health outcomes without imposing excessive costs on businesses, consumers, and the broader economy.

The LCCI noted that manufacturers are currently battling high energy costs, exchange rate volatility, elevated interest rates, logistics constraints, multiple taxation, and weak consumer purchasing power.

It warned that imposing additional taxes on the beverage industry could further increase production costs, which may eventually be transferred to consumers through higher product prices.

The chamber added that the development could worsen inflationary pressures and reduce demand for locally manufactured products.

The LCCI also expressed concern that the tax may have unintended consequences across the industrial value chain, noting that the beverage sector supports suppliers, distributors, transport operators, retailers, farmers, and other service providers.

It stated that any decline in production volumes resulting from increased taxation could lead to lower investments, reduced capacity utilisation, and potential job losses across related sectors.

The chamber advocated a more balanced approach that combines public health education, voluntary product reformulation initiatives, improved product labelling, consumer awareness campaigns, and broader stakeholder engagement.

According to the LCCI, similar policies in advanced economies were introduced mainly to encourage manufacturers to reduce sugar content in their products rather than to generate revenue.

The chamber stressed that sugar-sweetened beverage taxes should form part of a broader public health strategy and be carefully calibrated to avoid excessive disruption to industrial growth and employment.

It also argued that a reformulation-focused tax framework would be more effective than a revenue-focused approach, as it would encourage healthier products while preserving industrial activity.

The LCCI urged the Federal Government and the National Assembly to engage manufacturers, health experts, organised private-sector groups, consumer associations, and other stakeholders in redesigning the policy framework.

According to the chamber, such engagement would help develop a tax policy capable of achieving public health objectives while preserving jobs, investments, economic competitiveness, and sustainable industrial development.