As the Customs and Excise Tariff (Amendment) Bill (CETA) 2025 advances to third reading in the Senate, Nigeria is approaching a critical economic decision. The bill is now on the verge of passage at a time when businesses are grappling with some of the most difficult operating conditions in decades.
This is not simply a debate about taxation or public health. It is a question of economic priorities. At a time when governments around the world are strengthening domestic industries, protecting jobs, and building economic resilience, Nigeria must decide whether it wants to support production or impose additional burdens on those already producing.
The timing could hardly be more consequential.
Across the world, countries are increasingly acting in their own economic interests. Governments are subsidising manufacturing, securing supply chains, and taking deliberate steps to protect strategic sectors. Economic resilience and domestic production have become central pillars of national competitiveness.
Nigeria should be moving in the same direction.
Instead, lawmakers are considering legislation that could increase costs for one of the country’s most structured and compliant manufacturing sectors at a time when producers are already under significant pressure.
Nigeria is not an economy with deep industrial buffers. High inflation, exchange-rate volatility, rising energy costs, and elevated interest rates continue to place enormous strain on businesses. Since mid-2023, the naira has lost substantial value, significantly increasing the cost of imported machinery, raw materials, packaging, and other production inputs. Consumers are spending less, while businesses are paying more to produce.
In such an environment, policy decisions that increase pressure on productive sectors can have lasting consequences. Once factories scale down, investments are postponed, or jobs are lost, rebuilding industrial capacity becomes far more difficult.
The manufacturing sector already faces unreliable power supply, logistics challenges, multiple taxation, regulatory uncertainty, and foreign exchange pressures. These are not industries operating under ideal conditions. They are businesses striving to remain competitive while sustaining millions of jobs directly and indirectly.
Any policy that further increases costs without addressing these structural challenges risks discouraging investment, slowing production, and accelerating the shift of economic activity into the informal sector.
Few sectors demonstrate what is at stake more clearly than the beverage industry.
The sector supports an extensive value chain that includes agriculture, packaging, transportation, distribution, retail, and thousands of small and medium-sized enterprises. When policies affect the beverage industry, the effects extend far beyond manufacturers and reach countless businesses and families across the country.
It is also one of the most heavily taxed sectors in Nigeria. Government tax receipts from the industry increased from ₦123 billion in 2022 to ₦127 billion in 2023, accounting for a significant share of corporate income tax and value-added tax collections. Few sectors illustrate more clearly the extent to which compliant manufacturers already contribute to government revenue.
Advancing additional excise taxes under current economic conditions risks imposing immediate economic costs while offering uncertain public health outcomes.
Supporters of CETA frequently cite alignment with international health recommendations and guidance from organisations such as the World Health Organization (WHO). While the WHO plays an important role in global public health, Nigeria must be careful not to confuse global recommendations with local realities.
There is no conclusive evidence establishing sugar-sweetened beverages as the primary driver of non-communicable diseases, particularly in developing economies such as Nigeria. Obesity and related health conditions are influenced by a range of factors, including overall diet, physical activity, healthcare access, urbanisation, and socioeconomic conditions.
Treating a complex public health challenge as though it can be addressed primarily through higher taxes on a single product category risks oversimplifying the problem.
Nigeria’s own consumption data raises further questions about proportionality. Per capita sugar consumption remains below the WHO’s recommended annual threshold and significantly lower than levels recorded in several other African countries. This raises an important question: is the proposed response proportionate to the problem it seeks to address?
International experience offers little certainty. In several countries where sugar-sweetened beverage taxes have been introduced, consumption patterns have often shifted rather than disappeared, while evidence of sustained reductions in obesity or non-communicable diseases remains mixed.
Public health outcomes are rarely achieved through isolated fiscal measures alone. They typically require coordinated action involving education, healthcare, nutrition awareness, preventive care, and lifestyle interventions.
Health policy does not exist in isolation from economic policy.
Policies that are technically sound in theory can produce unintended economic consequences in practice. Increased production costs can lead to reduced investment, slower growth, and fewer employment opportunities. Ultimately, no international organisation bears responsibility for the Nigerian worker who loses a job or the local factory that scales back operations. That responsibility rests with Nigeria.
The Senate’s advancement of CETA also raises questions about policy alignment.
The bill appears difficult to reconcile with the President’s Fiscal Policy and Tax Reform Agenda, which seeks to broaden the tax base rather than place additional pressure on a relatively small group of compliant taxpayers. Nigeria’s challenge is not low taxation. It is a tax system in which a limited number of formal businesses carry a disproportionate share of the burden while large segments of the economy remain outside the tax net.
The contradiction becomes even more apparent when viewed alongside the Nigerian Industrialisation Policy 2025, which seeks to increase manufacturing’s contribution to GDP through competitive production, value-chain development, import substitution, and enterprise growth.
Policies that increase costs and uncertainty for manufacturers risk undermining these objectives before they have the opportunity to deliver results.
As CETA reaches third reading, the window for reflection is rapidly narrowing. Yet this is precisely the moment when lawmakers must ask a fundamental question: what kind of economy does Nigeria want to build?
The issue is not whether public health matters or whether industries should be regulated. Both are important. The issue is whether Nigeria should impose additional burdens on productive sectors at a time when the country’s most urgent economic priorities are job creation, industrial growth, investment attraction, and economic recovery.
