LCCI Warns That New SSB Tax Bill Could Hurt the Manufacturing Sector's Economy

After the Senate approved the Sugar‑Sweetened Beverage (SSB) Tax Bill, the Lagos Chamber of Commerce and Industry (LCCI) warned that the new levy could have serious economic repercussions for an already strained manufacturing sector.

The chamber cautioned that “public health interventions must be carefully designed to achieve health outcomes without imposing disproportionate costs on businesses, consumers, and the broader economy.”

Director General Dr. Chinyere Almona voiced these concerns in a statement issued yesterday following the bill’s passage.

Almona said: “At a time when manufacturers are grappling with high energy costs, exchange rate volatility, elevated interest rates, logistics challenges, multiple taxation, and weak consumer purchasing power, the introduction of additional taxes on the beverage industry risks further increasing production costs.”

“These higher costs are likely to be passed on to consumers through higher prices, worsening inflationary pressures, and reduced demand for locally manufactured products,” she added.

She highlighted that the tax could have unintended effects across the industrial value chain, as the beverage sector supports a broad network of suppliers, distributors, transport operators, retailers, farmers, and service providers.

“Any decline in production volumes resulting from increased taxation may negatively affect these interconnected sectors, leading to reduced investments, lower capacity utilisation, and potential job losses,” Almona warned.

The LCCI argued that Nigeria needs a more balanced approach that combines public health education, voluntary industry reformulation initiatives, improved product labelling, consumer awareness campaigns, and broader stakeholder engagement.

Such measures, the chamber said, could help achieve health objectives while minimising adverse effects on industrial growth and employment.

The LCCI urged the government to look at policies in more advanced economies that encourage manufacturers to reformulate products by reducing sugar content.

“We need to design Sugar‑Sweetened Beverage taxes that will be part of a broader public health strategy and carefully calibrated to avoid excessive disruption to industry and employment,” Almona said. “We want to see manufacturers reformulate their products over a transition period rather than raise prices due to SSB taxes.”

“A reformulation‑focused tax may be more effective than a revenue‑focused tax. Incentivising lower sugar content can achieve health objectives while preserving industrial activity,” she added.

“Policymakers must carefully assess impacts on agriculture, manufacturing, and supply chains before implementation, especially where industries support large numbers of jobs,” the chamber said.

Almona also urged the federal government and the National Assembly to undertake a redesign exercise through more technical engagement with manufacturers, health experts, organised private‑sector groups, consumer associations, and other stakeholders to craft a tax policy that drives product reformulation while preserving sales and jobs.

“This will help ensure that public health objectives are pursued in a manner that preserves economic competitiveness, protects jobs, and supports sustainable industrial development,” she concluded.