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The Nigerian government could temporarily suspend the 10 naira ($0.006) tax currently levied on every liter of sweetened beverage produced and imported into the country, Finance Minister Wale Edun announced on July 17.
The decision is part of a six-month economic stabilization plan.
“The temporary suspension of the tax on sweetened beverages is intended to help beverage manufacturers get through the current economic difficulties without going under. We plan to reintroduce the tax once the economy has stabilized,” said Edun.
Since 2023, Nigeria has experienced a devaluation of the naira and galloping inflation. According to the National Bureau of Statistics (NBS), headline inflation reached 34.19% in June 2024, a 28-year high, marking the 19th consecutive month of increases.
These conditions severely impacted the financial performance of many food companies, including Nestlé Nigeria and Nigerian Breweries, which ended the 2023 fiscal year in deficit.
In 2023, sales of sugar-sweetened beverages on the local market rose by 16.63% to 38.6 million liters, according to a report by Lagos-based Corporate Accountability and Public Participation Africa (CAPPA).
Nigeria, which has the highest consumption of soft drinks in Africa, is going through a difficult socio-economic period.
Faced with this situation, the government is considering reviewing its tax policy on sweetened beverages to help operators in the sector.
