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, SSBs, for health financing.
Describing the initiative as a decisive opportunity for the President Bola Ahmed Tinubu administration to leave a legacy of sustainable funding for the country’s healthcare system and to protect the health of the citizens.
Speaking at a national health-financing dialogue in Abuja,
Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, said that the Federal Government was finalising a draft policy to channel excise-tax revenues from alcohol, tobacco and sugary drinks into health financing.
Responding to the disclosure, CAPPA in a statement by its
Media and Communication Officer, Mr. Robert Egbe, World Health Organisation’s reports show that Nigeria is reeling from grossly inadequate public health financing and grappling with the double burden of non-communicable diseases, NCDs, fuelled by the excessive consumption of sugar-laden beverages, salt, tobacco and alcohol by citizens.
These diseases, it added, were responsible for nearly 30 per cent of all deaths in the country, making the situation a public health emergency.
By initiating the draft policy, CAPPA maintains that the FG has demonstrated commitment towards tackling the upsurge of NCDs in the country.
It urged the government to take comprehensive action by adopting the recommendations of the WHO and CAPPA, to make the taxes effective. This would involve benchmarking them on rates high enough to reduce consumption, encourage product reformulation and ultimately ease the country’s health burden.
WHO had recently advised Nigeria and other member states to raise the prices of sugary drinks, alcohol and tobacco by 50 percent through taxation over the next decade, as a means of curbing NCDs. The organisation expressed confidence that such measures would cut consumption of harmful products, which contribute to illnesses such as diabetes and cancer, while also generating critical revenue for public health. The call was part of its “3 by 35 Initiative,” a global effort, which, according to the WHO, comes at a time when health systems are under immense strain from rising NCDs, shrinking development aid and mounting public debt.
NCDs, including heart disease, cancer and diabetes, account for over 75 percent of deaths worldwide and according to WHO, a one-time 50 percent price increase on these products could prevent 50 million premature deaths over the next 50 years.
The Executive Director of CAPPA, Mr. Oluwafemi
Akinbode, applauded the Tax Reforms Committee’s courage and vision in drafting the policy, but cautioned that unless the health taxes are raised to an effective threshold, the policy would not achieve its intended goal.
“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. However, we must emphasise that, in the case of sugary drinks, the impact of this draft policy will only be maximised if SSB tax is significantly raised 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 percent of the retail price. Such a token measure cannot meaningfully discourage excessive consumption or generate substantial revenue,” Mr. Akinbode stated.
He maintained that “By contrast, an increase to a minimum of N130 per litre according to expert analysis by the Centre for the Study of the Economies of Africa, CSEA, would generate up to N729 billion annually”.
“This revenue could offset the estimated N493.3 billion Nigeria currently spends each year treating SSB-related diseases such as diabetes and cardiovascular conditions”.
“It would help curb the rising prevalence of NCDs. It would also encourage product reformulation, pushing beverage manufacturers to reduce sugar content and, in turn, promote healthier diets.”
Furthermore, CAPPA urged the government to expand and strengthen tobacco and alcohol taxes, ensuring rates are sufficiently high to discourage harmful consumption.
Reporting By Funmi Adeoye