MAN Warns Proposed Sugar Tax Could Threaten 1.5 Million Jobs, Cut Manufacturing Output
Sugar Tax Debate Intensifies as Manufacturers Warn of Sector-Wide Impact
The Manufacturers Association of Nigeria (MAN) has warned that a proposed increase in taxes on sugar-sweetened beverages (SSBs) could have significant consequences for the country's manufacturing sector, potentially affecting more than 1.5 million jobs and a segment responsible for roughly one-third of national manufacturing output. The association urged policymakers to adopt a balanced and evidence-based approach as lawmakers consider amendments to Nigeria’s excise tax framework.
The warning follows proposals contained in the Customs and Excise Tariff Amendment Bill 2025, which seeks to replace the current excise duty of ₦10 per litre on sugar-sweetened beverages with a percentage-based levy linked to retail prices. According to MAN, the proposed shift could substantially increase operating costs across the non-alcoholic beverage industry and create wider economic effects throughout the manufacturing value chain.
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Manufacturing Sector Highlights Economic Risks
MAN Director-General Segun Ajayi-Kadir stated that the non-alcoholic drinks industry remains one of the most important segments of Nigeria’s manufacturing sector. According to the association, the industry contributes approximately 33% of total manufacturing output and supports more than 1.5 million direct and indirect jobs across production, logistics, agriculture, distribution, retail and small businesses.
The association argued that imposing additional fiscal burdens on the sector could weaken industrial productivity, discourage investment and slow economic growth at a time when manufacturers are already facing elevated operating costs.
Industry stakeholders note that many manufacturers continue to contend with high energy prices, foreign exchange volatility, logistics challenges and rising financing costs, factors that have already increased production expenses across the economy.
Concerns Over Investor Confidence
MAN also expressed concern that the proposed tax framework could create uncertainty for investors. The association warned that frequent changes to fiscal policy may undermine confidence among local and foreign investors, particularly those making long-term investment decisions in manufacturing and consumer goods industries.
The group noted that manufacturers in the sector already remit a significant proportion of their revenues through various taxes, levies and statutory obligations. According to MAN, further increases in tax burdens could reduce competitiveness and limit the ability of companies to expand production or create new jobs.
The Abuja Chamber of Commerce and Industry (ACCI) has also voiced concerns about the proposed legislation, warning that the measure could place additional pressure on businesses, distributors, retailers and small enterprises operating within the beverage value chain.
Debate Over Public Health Objectives
Supporters of sugar-sweetened beverage taxes argue that such measures can help reduce the consumption of products associated with obesity and non-communicable diseases while generating revenue for public health programmes.
However, MAN contends that policy decisions should be guided by local consumption patterns and empirical evidence. The association noted that Nigeria's per capita sugar consumption remains relatively modest and argued that sugar-sweetened beverages represent only one component of overall dietary sugar intake.
The group maintains that health concerns should be addressed through a combination of education, awareness campaigns and targeted interventions rather than measures that could significantly affect industrial output and employment.
Manufacturing Sector Already Under Pressure
The debate comes at a time when Nigeria’s manufacturing sector is showing signs of recovery but continues to face structural challenges. Recent data from the National Bureau of Statistics indicated that manufacturing output growth improved in the first quarter of 2026, although the sector’s contribution to GDP remains below 10%. Economists have warned that Nigeria’s long-term economic transformation depends heavily on building a stronger industrial base capable of generating employment and supporting exports.
Industry groups argue that additional taxation should be carefully evaluated to avoid undermining ongoing efforts to improve productivity and competitiveness within the sector.
Implications for Housing and Construction
For the housing and construction sectors, manufacturing remains a critical component of economic growth. Industrial expansion supports demand for warehouses, industrial parks, worker housing and supporting infrastructure. A slowdown in manufacturing investment or production could have indirect effects on real estate development and broader urban economic activity.
Large manufacturing employers also contribute significantly to household income and housing demand, making industrial performance an important indicator for property market growth and infrastructure planning.
Outlook
As lawmakers continue deliberations on the proposed sugar-sweetened beverage tax framework, the debate is increasingly balancing public health objectives against economic and industrial concerns. MAN maintains that any new tax structure should support government revenue goals without jeopardising manufacturing output, employment and investor confidence.
The outcome of the legislation will be closely watched by manufacturers, investors and policymakers, particularly as Nigeria seeks to strengthen industrial growth, attract investment and sustain economic recovery in a challenging operating environment.
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