Lagos considers raising tax on sugary drinks to lower disease rates

The Lagos state Government is considering a pro-health levy on Sugar-Sweetened Beverages (SSB) to boost public health and lower the rising non-communicable diseases (NCDs) burden.

Commissioner for Health, Akin Abayomi, made the disclosure during a meeting with transparency watchdog, Corporate Accountability and Public Participation Africa (CAPPA), United States-based Global Health Advocacy Incubator and the Centre for the Study of Economies of Africa (CSEA).

A statement by the Media and Communication Officer, CAPPA, Robert Egbe, quoted Mr Abayomi to have said that the SSB levy would contribute to driving the state’s human capital agenda – healthier children and good nutrition – and positively impact its health and education sectors.

Mr Abayomi’s comments followed the delegation’s presentation of a simulation study of the ‘Potential Fiscal and Public Health Effects of SSB tax in Nigeria.’

Nigeria is said to be the fourth highest soft drinks consuming country in the world, and the study proposes, among others, that to wean Nigerians off their addiction to SSBs and bring down the NCDs burden, the federal government ought to increase the SSB Tax to N130 per litre, from the current N10.

The policy could also earn the government an estimated N729 billion in tax revenue, which CAPPA and other stakeholders propose could be allocated to strengthening the health sector.

CAPPA’s Executive Director, Akinbode Oluwafemi, explained the health and fiscal benefits of the policy for Lagos residents.

“We think that this is one of the tools that we can use to lower NCDs that are becoming a big burden in Nigeria, including obesity, high blood pressure, and the like.

“The government imposed a N10 per litre tax on SSBs in 2021, which is actually five kobo for 50cl of SSBs. At that time, it (SSBs) was selling for N100. It is a fixed tax. Today, it is selling for N300. The government tax is still N10. And if you look at the inflation rate, that, in itself, needs to have been improved,” he said.

Mr Oluwafemi noted that CSEA was commissioned to look at the potential health and fiscal impacts of SSB tax.

“We did a simulation, and even before the floating of the naira when this study was completed, the simulation projected that N130 should be the appropriate tax per litre of SSBs in Nigeria,” he said.

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He expressed delight at engaging policymakers like the health commissioner, adding, “We see Lagos as one of the champions of public health policies, and how we can take this further.

“We are looking for support because we will soon be looking at a national legislation that will make Sin Tax a much more sustainable law rather than every year, and at that point we will be looking at champions to speak for this,” he added.

In his response, the health commissioner acknowledged the problems caused by NCDs and advised that localised legislation through the House of Assembly would align with the state’s immediate health goals.

Mr Abayomi reasoned that funds raised through such a policy could be “channeled specifically to the areas of the consequence of those consumptions. So, it can go to health and education, because we’re now using it to drive a human capital agenda, which is healthier children and good nutrition.

“Health access and going to good schools: these produce our human capital infrastructure. In Lagos, we have two kinds of infrastructure: a physical one and human infrastructure. That’s how we look at it,” he noted.

Earlier, the Nigeria Coordinator of Global Health Advocacy Incubator, Joy Amafah, highlighted the importance of the Lagos health ministry and the commissioner’s office to the goal of a healthy Nigeria.

According to the 2022 World Health Organisation (WHO) Manual on SSB Taxation Policies to Promote Healthy Diets, SSB taxes can be a win-win-win strategy: a win for public health (and averted health-care costs), a win for government revenue, and a win for health equity.