The Corporate Accountability and Public Participation Africa (CAPPA) has commended the Federal Government’s decision to develop a draft policy that will earmark revenues from excise taxes on alcohol, tobacco, and sugar-sweetened beverages for health financing.
The organisation described the initiative as a decisive opportunity for the President Bola Ahmed Tinubu administration to create sustainable funding for Nigeria’s healthcare system and protect citizens’ health, according to a statement issued on Monday.
Mr. Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, disclosed at a recent national health-financing dialogue in Abuja that the Federal Government is finalising a draft policy to channel excise-tax revenues from alcohol, tobacco, and sugary drinks into health financing.
Oyedele said the policy will soon be submitted to the Minister of Health and Social Welfare.
CAPPA referenced local and World Health Organisation reports showing that Nigeria faces inadequate public health financing and is grappling with non-communicable diseases fuelled by excessive consumption of sugar-laden beverages, salt, tobacco and alcohol.
The organisation noted that these diseases are responsible for nearly 30 per cent of all deaths in the country, making the situation a public health emergency.
Akinbode Oluwafemi, Executive Director of CAPPA, while applauding the Tax Reforms Committee’s initiative cautioned that the health taxes must be raised to an effective threshold to achieve intended goals.
“We commend the government for proposing to earmark the revenues from SIN tax to public health, as long advocated by WHO, CAPPA and other pro-public health civil society organisations in Nigeria,” Oluwafemi said.
However, he emphasised that for sugary drinks, the policy’s impact will only be maximised if Nigeria significantly raises SSB tax from the current N10 per litre to at least N130 per litre, adjustable to inflation.
“CAPPA has consistently recommended, based on available evidence and in-depth research, that the current N10 per litre excise duty introduced under the 2021 Finance Act is grossly inadequate. At N10, the tax represents only about N3.33 on a N300, 50cl bottle, less than 1 per cent of the retail price,” Oluwafemi stated.
He said an increase to a minimum of N130 per litre would generate up to N729 billion annually, according to expert analysis by the Centre for the Study of the Economies of Africa.
This revenue could offset the estimated N493.3 billion Nigeria currently spends each year treating SSB-related diseases such as diabetes and cardiovascular conditions, according to CAPPA.
The organisation said the higher tax would help curb the rising prevalence of non-communicable diseases, which already account for nearly 30 per cent of deaths nationwide, and encourage product reformulation by pushing beverage manufacturers to reduce sugar content.
CAPPA referenced the WHO’s recent advice to Nigeria and other member states to raise prices of sugary drinks, alcohol, and tobacco by 50 per cent through taxation over the next decade as a means of curbing NCDs.
The WHO expressed confidence that such measures would cut consumption of these harmful products while generating critical revenue for public health as part of its “3 by 35 Initiative.”
The organisation said a one-time 50 per cent price increase on these products could prevent 50 million premature deaths over the next 50 years, noting that NCDs account for over 75 per cent of all deaths worldwide.
CAPPA also advised the government to expand and strengthen tobacco and alcohol taxes, ensuring rates are sufficiently high to discourage harmful consumption.