Why effective sugar-sweetened beverage taxation is overdue in Nigeria

Zawya

06-02-2025

Dr. Francis Fagbule, a public health dentist and lecturer at the University of Ibadan and the University College Hospital, Ibadan, emphasizes in this interview by SADE OGUNTOLA that addressing noncommunicable diseases in Nigeria requires a holistic approach, including the implementation of appropriate pro-health taxation on sugar-sweetened beverages. Excerpts:
WHY is a sugar-sweetened beverage tax important, particularly with studies warning about rising health concerns like obesity, diabetes, and other cardiovascular diseases in Nigeria?
Sugar-sweetened beverages (SSBs) refer to any liquids, powders, or other concentrated forms that contain natural or added sweeteners, not limited to and including various forms of sugars like brown sugar, corn sweetener, corn syrup, dextrose, fructose, glucose, high-fructose corn syrup, honey, lactose, malt syrup, maltose, molasses, raw sugar, and sucrose.
SSBs is a commonly used terminology for drinks that contain added sugar or what we call 'free sugar.' This includes soft drinks, sweetened tea, fruit juice, and energy drinks. These include soft drinks, sweetened tea, fruit juices, and energy drinks, where sugar is added during production. Even fruit juices, when concentrated, fall under this category due to their high sugar content. Honey, though natural, also qualifies as a sugar-sweetened beverage because it contains a significant amount of concentrated sugar. Whether in natural, powdered, or processed form, excessive consumption of these drinks results in a high sugar intake. Locally produced beverages such as kunun and zobo also fall within this category as far as sugar is added to them.
Now, there's something important we need to understand. Let me use a 50cl bottle of soft drink as an example; it can contain up to 12 to 14 cubes of sugar. The problem is that these drinks offer no nutritive value. So, when you take a bottle of soft drink, you're essentially consuming 12 to 14 cubes of sugar with no useful nutrients for your body.
Similarly, while honey is natural, it still contains a lot of calories, so people need to take it in moderation. The key difference is that sodas and energy drinks offer no nutritional benefits and instead contribute significantly to health problems.
Now, why sugar-sweetened beverage taxation? The idea is that when the price of the product is high, the demand for it will come down. What is important is that individuals need to reduce their consumption of these products because the more they consume them, the higher the risk of health problems that they cause.
What can the government do to encourage people to reduce their intake? That is where the SSB tax comes in. It is part of what is known as a pro-health tax, aimed at improving public health. When an SSB tax is implemented effectively, it reduces SSB consumption, leading to better health outcomes for the people.
We need it now more than ever. In recent years, hardly a day goes by without hearing news of people collapsing and dying. These incidents are often caused by non-communicable diseases such as stroke, heart failure, uncontrolled diabetes mellitus, etc. The proportion of people with these diseases is rising rapidly in Nigeria, and research supports this trend. A 2020 study revealed that one out of every three adults (32.5per cent) have hypertension, representing a significant increase from 8.6percent in 1995. The same can be said for diabetes mellitus, obesity, and other non-communicable diseases.
Data from industry and other studies have shown a significant increase in the consumption of sugar-sweetened beverages over the past decade. Many people now opt for junk foods and drinks, which are high in sugar, instead of preparing and eating healthier meals at home. This trend has contributed to the rise in non-communicable diseases.
To combat this growing challenge, it is crucial to encourage people to reduce their consumption of sugar-sweetened beverages. One of the most effective ways to achieve this is through sugar-sweetened beverage taxation. The SSB tax has been implemented in over 100 countries across the globe, including South Africa, the United Kingdom, and Mexico, and it has resulted in a reduction in their consumption of sugar-sweetened beverages.
Will sugar-sweetened beverage taxation affect the incidence of tooth decay from the point of view of a dentist?
Parents often warn that sweets or chewing gum containing sugar can cause problems for children's teeth. The same applies to sugar-sweetened beverages because of the added sugar in these drinks. However, the effect of sugar-sweetened beverages on teeth is even worse than sweets or chewing gum. This is because carbonated drinks tend to be acidic, which causes the teeth to wear away gradually. Habitual consumption of sugary drinks will eventually lead to tooth decay and has also been linked to gum diseases. This is why we consistently advise reducing the consumption of sugar-sweetened beverages to prevent dental problems.
When people reduce their consumption of these drinks, the associated health problems such as diabetes, obesity, hypertension, and dental caries will also decrease. Many people often ask, 'Can children take these drinks? Can they consume as much as they want?' The answer is no. It is important to note that we already get all the sugar our body needs from the regular meals we eat.
So, how much added sugar is too much? According to the World Health Organization (WHO), an adult should consume no more than six cubes of sugar per day. To put this in perspective, a 50cl bottle of soft drink contains about 12 cubes of sugar: twice the recommended daily intake for an adult. For children, the recommendation is even lower. In fact, children below the age of two should not be given sugar-sweetened beverages at all because they cause harm.
The problem with non-communicable diseases is that the effects are not immediately visible; they develop slowly over several years. Unfortunately, when they manifest, they often persist for life. By giving children these drinks now, we are indirectly creating serious health problems for their future.
Taxation is one proven way to address these challenges. In countries where sugar-sweetened beverage taxation has been implemented, there has been a noticeable reduction in the associated health problems, including dental caries, obesity, and diabetes.
In 2021, the Federal Government introduced the SSB tax. It was embedded in the Finance Act of 2021. It levies a 10 Naira tax on each litre of all non-alcoholic and sugar-sweetened carbonated drinks. Is it enough of a deterrent to people not taking sweetened drinks in excess in Nigeria?
First, it's important to clarify the difference between a sugar-sweetened beverage (SSB) tax and a general sugar tax. People often confuse the two. A sugar tax would apply to a broader range of products, whereas the Finance Act of 2021 specifically introduced the SSB tax, which levies 10 Naira per litre of non-alcoholic, sugar-sweetened carbonated drinks.
Now, let's break this down: currently, a 50cl bottle of soft drink costs about 400 Naira. The 10 Naira per litre tax translates to just an additional N5.0 per 50cl bottle, making the new price N405.00. That is hardly enough to deter anyone from purchasing it. In fact, when people buy drinks, they often leave with a change of N50 or N100, meaning the tax has little to no impact on consumer behaviour.
The goal of SSB taxation is to reduce consumption. For it to be effective, the tax needs to significantly influence the price. The World Health Organization (WHO) recommends that SSB taxation should increase the retail price by at least 20% to achieve a meaningful reduction in consumption. For instance, if a 50cl bottle currently costs 400 Naira, a 20 per cent tax would raise the price to about 480 Naira.
Countries are also encouraged to study how sensitive their populations are to price increases to determine the appropriate tax rate. In Nigeria, the current SSB tax amounts to less than one percent of the prices of some drinks such as energy drinks and fruit juices. To see the intended health benefits, this tax must be increased significantly and adjusted as a percentage of the product's cost rather than a fixed amount such as 10 Naira per litre. Fixed rates are easily eroded by inflation, making them less effective over time.
So, do you need a review of the SSB taxation embedded in the Finance Act of 2021?
Exactly. There needs to be a review. First, we must consider the current economic climate because the situation in 2021 is very different from what we have now. The current 10 naira per litre excise duty is too small and unlikely to deter consumption. Hence, it should be increased for it to be impactful. A recent study pioneered by The Corporate Accountability and Public Participation Africa (CAPPA) in conjunction with the Centre for the Study of Economies of Africa (CSEA), reported that an SSB tax of about 39 per cent (130 Naira per litre) would yield a significant reduction in per capita SSB consumption, cause a reduction in SSB-associated health problems, and be a major source of income to the government. I must also add that the revenue generated from this tax should be earmarked for health and for funding health programs in the country, which is currently not the case.
Secondly, the tax should possibly be made in the form of dedicated legislation. The Finance Act, while a law, is subject to yearly revisions, making it vulnerable to lobbying efforts by the industry to have it removed. If the SSB tax becomes a standalone piece of legislation, it will be far more difficult to repeal.
Additionally, we need to strengthen this pro-health tax by clearly distinguishing between taxes on essential commodities and those meant to discourage the consumption of products with no nutritional value. Sugar-sweetened beverages clearly fall into the latter category. Strengthening this distinction will help to ensure that the effectiveness of the tax in reducing consumption and improving public health.
Talking about pro-health law, are there other products that Nigeria is taxing because of health concerns?
As a public health professional, we often focus on the common risk factors for non-communicable diseases (NCDs). These include tobacco use, harmful alcohol consumption, unhealthy diets (where sugar-sweetened beverages fall), physical inactivity, and environmental factors.
Pro-health laws are not new; they have been around for years. For example, tobacco taxation on cigarettes and other tobacco products has been implemented and shown to have significant effects, particularly in countries where it is well-enforced. Similarly, Nigeria already taxes alcoholic beverages as part of its efforts to address NCDs.
However, when it comes to sugar-sweetened beverages (SSBs), there are still loopholes. The current taxation is not robust enough to make a significant impact on reducing consumption. Globally, there is now an increasing focus on addressing other areas of unhealthy diets, such as industrialized trans-fatty acids, which are also linked to NCDs. For Nigeria to achieve meaningful health outcomes, the government and stakeholders must address all these risk factors comprehensively.
What are some other potential drawbacks of the SSB tax in Nigeria presently?
One potential drawback is the spread of misinformation, particularly in the media. I strongly believe much of this misinformation is industry-sponsored, aimed at swaying public opinion and pressuring the government to reverse the tax. For instance, claims have been made that the SSB tax will lead to massive job losses. Similarly, I recently read an editorial in one of the national dailies where the writer absurdly claimed that the 10 Naira per litre SSB tax would cause the cost of SSBs to double. These claims are simply untrue.
Some people may also feel apprehensive about the SSB tax because they are unaware that, unlike other taxes, the SSB tax; like other pro-health taxes; is specifically designed to improve public health. Such misinformation creates unnecessary fear and confusion.
It is, therefore, crucial to provide the public with accurate information about the purpose and benefits of the SSB tax. The reality is that the benefits of SSB taxation far outweigh any perceived drawbacks; it is, quite literally, a matter of life and death. Are we to prioritize the profits of a few industry board members or owners over the lives and health of the people? Certainly not, public health must always come first.
In fact, in countries where the government bears the cost of healthcare, implementing effective taxation policies is far easier. The health problems caused by excessive SSB consumption place a far greater burden on society than any corporate social responsibility (CSR) activities these industries may claim to perform in communities.
Is the SSB tax alone sufficient to combat obesity and related health issues in Nigeria?
Definitely not. While the SSB tax is an important step, it is not enough on its own to combat obesity and related health issues. Other pro-health taxes, such as those on tobacco and alcohol, also play a role in addressing these challenges. However, a holistic approach is required.
The SSB tax is just one of the government's interventions, and it must be complemented by other measures. For instance, there should be aggressive public health campaigns to enlighten people about the health risks associated with sugar-sweetened beverages (SSBs). The environment also needs to be improved to discourage their consumption.
The SSB industry often targets children, so we must ensure that schools are completely free of SSB products. Additionally, legislation is needed to regulate misleading advertisements and ensure that the industry provides accurate labelling on their products. Many people would be shocked to learn that a single 50cl soft drink may contain as much as 12 to 14 cubes of sugar. Accurate information is crucial so people can make informed choices.
While the SSB tax takes the lead, it must be supported by these complementary actions to maximize its impact. Only then can we effectively combat obesity and Copyright © 2022 Nigerian Tribune Provided by SyndiGate Media Inc. (Syndigate.info).