The newly introduced tax on carbonated drinks by the Federal Government would not only assuage declining revenues but could become a new tool to fight obesity epidemic and diabetes in the country.
Africa’s biggest economy is home to over 12 million persons estimated to be obese in 2020 according to a study published in the National Centre for Biotechnology Information, part of the United States National Library of Medicine, using data gathered from the World Health Organisation and the Nigerian health authorities.
“In Nigeria, nutritional and epidemiological transitions driven by demographic changes, rising income, urbanization, unhealthy lifestyles, and consumption of highly processed diets are among the leading contributors to overweight and obesity,” the research produced by Davies Adeloye, Janet O. Ige-Elegbede, Martinsixtus Ezejimofor, among others said.
The researchers say their findings suggest a high prevalence of overweight and obesity in Nigeria. This is marked in urban Nigeria and among women, which may in part be due to widespread sedentary lifestyles and a surge in processed food outlets, largely reflective of a trend across many African settings.
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In announcing the policy, the Federal Government cited health as a consideration.
“There’s now an excise duty of N10 per litre imposed on all non-alcoholic and sweetened beverages. And this is to discourage excessive consumption of sugar in beverages which contributes to a number of health conditions, including diabetes and obesity. But it is also used to raise excise duties and revenues for health-related and other critical expenditures. This is in line also with the 2022 budget priorities,” said Zainab Ahmed, minister of finance, budget and national planning, during the public presentation of the 2022 budget on Wednesday.
Several studies have linked the consumption of soft drinks with obesity and diabetes. Medical experts say more than 4 million Nigerians suffer from diabetes linked to excess sugar consumption.
Global analytics firm Statista ranks Nigeria 7th on its per capita consumption of carbonated soft drinks in 2019 in the ten most populated countries worldwide. In 2019, Nigerians the data said consumed over 49 ‘8-ounce’ servings per capita per year.
Mexico led the pack with 634 and the United States stood in second place, with almost the same quantity, while Brazil, which ranked third, consumed less than half the soft drinks Mexicans drank that year.
Nigerians consume an estimated 40 million litres of soft drinks yearly in data published six years ago. The influx of new brands, advertising and marketing efforts in rural areas have since rendered this data obsolete.
However, relying on that data, the introduction of N10 excise duty on carbonated drinks by the government could add about N400bn into the Federal Government’s coffers every year.
The new policy, now referred to as ‘Sugar Tax’, is contained in the Finance Act signed into law by President Muhammadu Buhari on December 31, 2021.
Health groups have been campaigning for the imposition of sugar tax, the prevention of sugar-sweetened beverage producers advertisement to children and a mandatory warning label on sugar-sweetened beverages similar to cigarettes to make sure consumers know the product’s sugar levels and health risks
Last year, some NGOs working to prevent communicable and non-communicable diseases in Nigeria, including the African Youth Initiative on Population, Health and Development (AfrYPoD), Project Pink Blue Association for Reproductive and Family Health (ARFH), and several others urged the government to impose taxes on sweetened beverages.