Amid mounting pressure over Nigeria’s proposed sugar-sweetened beverage tax, the National Union of Food, Beverage and Tobacco Employees (NUFBTE) has called on the House of Representatives to reject the legislation, warning that a higher tax burden could trigger factory shutdowns, workforce reductions and disruption across the beverage industry’s supply chain.

In an open letter addressed to Speaker of the House of Representatives, Tajudeen Abbas, NUFBTE President Garba Dankama urged lawmakers to withhold concurrence on the Customs, Excise Tariff, etc. (Consolidation) Act (Amendment) Bill, 2025, which the Senate passed at third reading on June 4, 2026. The proposal is awaiting the House’s concurrence and has not yet become law.

At the heart of the dispute is a proposed change to the way the government taxes sugar-sweetened beverages. Rather than retain the existing excise duty of ₦10 per litre, the bill would introduce a levy calculated as a percentage of retail prices, with the Minister of Finance responsible for determining the applicable rate.

Under the proposal, part of the revenue would support public health initiatives, including disease prevention, health promotion, primary healthcare and health insurance for vulnerable Nigerians. Senator Ipalibo Banigo sponsored the legislation, which seeks to address health concerns associated with excessive sugar consumption.

However, NUFBTE argues that the proposed tax could place additional pressure on manufacturers already grappling with rising operating expenses and a difficult business environment. Dankama identified high borrowing costs, escalating energy and transportation bills, foreign exchange constraints and declining consumer purchasing power as challenges that have weakened the sector.

Against this backdrop, he warned that some manufacturers had already reduced production or shut down certain lines, leaving the industry with limited capacity to absorb further cost increases. He maintained that imposing a higher levy could deepen the crisis, potentially resulting in more factory closures, retrenchments and damage to the wider production and distribution network.

Beyond the factories themselves, the union president stressed that Nigeria’s non-alcoholic beverage industry sustains hundreds of thousands of livelihoods across farming, haulage, distribution and retail. He cautioned that additional taxation could threaten these interconnected businesses, describing the potential consequences as “a wave of further closures, retrenchments, and value chain collapse.”

Questioning the proposal’s public health justification, Dankama also argued that soft drinks account for only about five per cent of the sugar consumed in Nigeria. In his view, placing a heavier tax on the category may not adequately address the broader sources of sugar intake, while potentially pushing consumers towards cheaper, unregulated alternatives.

Alongside the industry-wide concerns, NUFBTE highlighted the financial pressures facing workers themselves. Dankama said employees’ earnings had failed to keep pace with rising food, transport and housing costs following the removal of the fuel subsidy and the implementation of foreign exchange reforms. He warned that further pressure on manufacturers could compound the economic difficulties already confronting workers and their families.

Elsewhere in the business community, opposition to the bill has gathered support from several organisations concerned about its potential economic implications. The Centre for the Promotion of Private Enterprise has urged the House to reject the proposal, while the Manufacturers Association of Nigeria, the Nigeria Employers’ Consultative Association and the Abuja Chamber of Commerce and Industry have raised concerns about the possible effects of a percentage-based levy on production costs and investment.

Nevertheless, the proposal has attracted backing from public health advocates who believe the existing tax has lost much of its effectiveness. The Senate argued that inflation has eroded the value of the current ₦10-per-litre charge, reducing its ability to discourage excessive sugar consumption while limiting the revenue it generates.

In contrast to the objections raised by manufacturers and labour groups, Corporate Accountability and Public Participation Africa has welcomed the legislation and called on the House of Representatives to grant its concurrence without delay. The group’s position reflects the view that a revised tax structure could strengthen efforts to address diseases associated with excessive sugar intake.

Central to the debate is the burden of non-communicable diseases, particularly diabetes, obesity and hypertension. The Federal Ministry of Health has reported that approximately eight per cent of Nigerians, representing about 18 million people, live with diabetes, a figure cited in discussions around the need for stronger public health interventions.

As lawmakers consider the next stage of the bill, the debate has sharpened the divide between those prioritising public health measures and those warning against additional pressure on businesses and employment. The House’s decision will determine whether the proposed levy advances through the legislative process, with manufacturers, workers and health advocates continuing to press their competing arguments over its likely economic and social consequences.