Afrigather 
The pending proposal to impose one more sugar tax has sparked intense debates, threatening to hinder the fragile stability wanted for sustainable financial revival. Within the face of a fragile post-pandemic financial panorama, the implications of this potential tax levy loom giant, inviting a better scrutiny of its penalties on each the general public well being agenda and the broader financial restoration journey.
On the coronary heart of the matter lies a proposal to enhance the prevailing 10 Naira per litre tax on sugar-sweetened drinks. The Federal Authorities not too long ago expressed its readiness to lift tax on sugar-sweetened drinks (SSB) from the present price of 10 p.c to twenty p.c.
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The SSB tax, embedded within the Finance Act of 2021, levies a N10 tax on every litre of all non-alcoholic and sugar-sweetened carbonated drinks, as a part of efforts to discourage extreme consumption of sugar, which it claims contributes to the burden of non-communicable ailments equivalent to weight problems, diabetes, amongst others.
Because the collective voice of trade stakeholders, the Manufacturing Affiliation of Nigeria (MAN) highlights the tangible repercussions of such a choice. MAN posited that on the floor, this proposal could seem as a simple measure to handle sugar consumption. Nonetheless, beneath the floor, a posh financial conundrum unfolds.
The first sector set to be affected by this proposed tax hike is the Meals and Beverage trade —a big contributor to Nigeria’s financial panorama. Native industries closely rely upon domestically sourced sugar. The inevitable consequence of upper taxes on sugar-sweetened drinks is the seemingly surge within the costs of those merchandise. In a nation the place customers are significantly price-sensitive, this value improve is poised to result in a discount in demand for these items.
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But, the implications of this demand discount are to not be taken evenly. It might doubtlessly translate right into a dwindling income stream for the federal government at the long term, coupled with the very actual risk of job losses inside the Meals and Beverage sector, therefore worsening the present excessive unemployment price being ravaging the nation. Furthermore, the value hike could inadvertently prod customers in the direction of the consumption of unregulated and illicit sugar-sweetened merchandise, additional complicating the problems of public well being and regulation which the federal government initially intends to examine.
Recognizing the important function of the sugar trade and the necessity to cut back Nigeria’s reliance on sugar imports, the federal government in 2012, made an audacious transfer to spice up native sugar manufacturing. This concerned the strengthening of the prevailing sugar crops, establishing new ones, and supporting sugarcane farmers with credit score, provides, and higher infrastructure.
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In step with this, the Nationwide Sugar Growth Council (NSDC) (the principle focal company answerable for the regulation of all actions within the sugar sub-sector starting from manufacturing, advertising and marketing, importation and enforcement of related trade requirements in collaboration with related authorities businesses), crafted a strategic plan often known as the Nigeria Sugar Grasp Plan (NSMP) with the intention of reaching self-sufficiency in sugar manufacturing inside a decade. The NSMP obtained approval from the Federal Authorities in September 2012, and its implementation commenced on January 1, 2013.
The Nigerian Sugar Grasp Plan, a complete ten-year roadmap coverage, hid a grand imaginative and prescient — to resurrect Nigeria’s once-thriving sugar sub-sector and elevate the nation to the esteemed standing of a number one sugar producer in Africa.
The federal government’s endorsement of the NSMP and its adoption because the guiding framework for sugar sector improvement underscored its dedication to leveraging agriculture and industrial manufacturing to diversify the nation’s economic system and income streams. This initiative was poised to create vital employment alternatives for the residents, marking a pivotal step within the nation’s financial and agricultural transformation.
Key to this initiative have been three Nigeria’s largest industrial conglomerates—Dangote, Flour Mills, and BUA—enlisted as anchor gamers for the preliminary decade. Guiding this monumental effort to fortify native sugar manufacturing was the Nationwide Sugar Growth Council, appearing because the pivotal coverage platform.
If the Federal Authorities goes forward to extend the sugar tax, it’s not simply the Meals and Beverage sector that will discover itself on the cliff of potential disruption. The native sugar trade, a linchpin of the NSMP’s ambitions, stands below the shadow of an unsure future. The disruption in demand dynamics, pushed by the proposed tax improve, might severely impede the progress made in the direction of reaching the native sugar sufficiency targets outlined by the NSMP. The looming specter of job losses inside this sector casts a cloud over the lofty objectives envisioned by the NSMP.
This brings us to a basic query: If the federal government is genuinely dedicated to realizing self-sufficiency and fortifying the native sugar trade by means of the NSMP, then why concurrently impose a tax on sugar consumption that has the potential to stifle the very trade it seeks to advertise? MAN asserts that there needs to be a extra harmonious and balanced method, one which promotes native sugar manufacturing whereas making certain financial stability and job safety.
The fragile balancing act between enhancing native sugar provide and regulating sugar consumption is a problem that calls for cautious consideration. MAN’s place underscores the necessity for a complete technique that prioritizes financial development, sustainability, and the well being of the sugar trade, all with out unintentionally suppressing total financial progress.
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Within the phrases of Segun Ajayi-Kadir, the Director-Basic Producers Affiliation of Nigeria: “Because the Producers Affiliation of Nigeria, we wholeheartedly endorse the Nigeria Sugar Grasp Plan as a pivotal driver of financial revitalisation and self-sufficiency within the sugar sub-sector. Nonetheless, the latest proposal to extend the tax on sugar-sweetened drinks poses a considerable problem to our collective imaginative and prescient. It casts doubts on the need of a balanced method that encourages native sugar manufacturing whereas securing our nation’s financial stability and job safety. We consider that the fragile balancing act between these targets necessitates considerate consideration and a extra harmonious technique to realize our shared objectives.”
Because the argument rages and the nation charts its course in the direction of a extra sustainable future for its sugar sub-sector, policymakers are urged to heed the issues and insights raised by trade stakeholders. The last word objective is to discover a harmonious equilibrium that not solely resurrects the sugar trade but in addition nurtures a thriving, aggressive, and sturdy financial panorama, thereby edging Nigeria nearer to its imaginative and prescient of changing into a number one sugar producer in Africa.
Uwadiegwu, a commentator on nationwide points, writes from Lagos
