The rising prevalence of malnutrition in the country has been viewed as a significant developmental issue. In recent years, the global health community has expressed growing concern over the rising rates of obesity, diabetes, and other diet-related chronic diseases. In response to this public health challenge, many countries have explored the implementation of fiscal policies to curb the consumption of unhealthy products, particularly sugary drinks. The implementation of fiscal policies, such as taxing sugary drinks, has emerged as a promising strategy to tackle the rising tide of diet-related health issues.
Evidence suggests that the intake of foods that are taxed and subsidized may be influenced by fiscal interventions on food, which may ultimately lead to an improvement in health. Some countries have successfully implemented fiscal policies (food taxes on unprocessed sugar and sugar-added foods) to decrease their consumption and in turn reduce adverse health-related, economic, and social effects associated with these food products. Norway, Hungary, Denmark, Bermuda, Dominica, St. Vincent and the Grenadines, and the Navajo Nation (USA) are among these countries.
The accessibility, affordability, and aggressive marketing of sugary drinks have contributed to the rapid rise in obesity rates and related health issues in the country. Health experts warn that Nigeria’s growing obesity epidemic is a ticking time bomb, as it poses significant economic and healthcare challenges. The World Health Organization (WHO) estimates that non-communicable diseases in Nigeria are rising, accounting for approximately 29% of deaths, with cardiovascular diseases, diabetes, and cancers being the leading causes. The negative role of sugary drinks in poor health outcomes has been reviewed extensively. Sugary drinks are a major contributor to excessive sugar consumption, leading to weight gain, tooth decay, and an increased risk of developing chronic diseases.
In 2022, it was all smiles and dance when the Nigerian government was applauded for announcing the imposition of tax on sugar-sweetened beverages (SSB) following the signing of a bill into law as part of the 2021 Finance Act. The Act stipulates that an excise duty of N10 per liter (USD 0.02/liter) be imposed on all non-alcoholic and sweetened beverages. The tax aims to lower the intake of SSBs to support Nigeria’s battle against the rising prevalence of non-communicable diseases (NCD), particularly cardiovascular diseases, type 2 diabetes, and obesity. It is also intended to increase government revenue, consequently.
Fiscal policies can impact health behavior. The taxation of sugar-sweetened drinks (SSBs) is one policy that Latin American countries have implemented to reduce population weight through interventions that might successfully prevent childhood obesity. segment that is often disproportionately affected by diet-related diseases. In 2018, the UK introduced a Soft Drinks Industry Levy, also known as the “sugar tax.” The SDIL might improve public health without hurting industry players. Moreover, companies reformulated their products, offering healthier alternatives to consumers.
Given the success of fiscal policies in other countries, a similar approach in Nigeria holds the potential to yield positive nutrition and health outcomes, as outlined below.
Effective Implementation of Fiscal Policies Can Positively Impact Public Health
Reduced sugary drink consumption. Taxing sugary drinks in Nigeria is likely to lead to a decrease in consumption, particularly among price-sensitive demographics. Consumers may choose healthier alternatives like water, natural fruit juices, or unsweetened drinks if the price of sugary beverages rises.
Encourage healthier food choices. Fiscal policies can also encourage the food and beverage industry to reformulate products to reduce sugar content and offer healthier options. This can lead to an overall improvement in the nutritional quality of available food and drink products in the market.
Subsidize healthy food and beverages. The government can provide subsidies for healthier food and SSB options, making them more affordable for consumers. This approach can encourage people to choose alternatives to sugary drinks, such as natural fruit juices, low-fat milk, or water.
Implement a tiered-tax system. A tiered-tax system could be introduced, where drinks and beverages with higher sugar content are subjected to higher tax rates. This approach provides an incentive for manufacturers to reduce sugar levels in their products and for consumers to opt for lower-sugar alternatives.
Advertising restrictions and tax breaks. Imposing restrictions on the advertising and marketing of sugary drinks can complement fiscal policies. Tax breaks or incentives could be provided to companies that focus on promoting and producing healthier alternatives.
Allocate Revenue to Health and Nutrition Programs. Designating a portion of the revenue generated from taxing sugary drinks to fund health and nutrition programs can have a positive impact on public health. These programs could focus on educating the public about healthy eating habits, promoting physical activity, and addressing food insecurity.
Introduce health warnings and labels. Introducing prominent health warnings and labels on sugary drink packaging can increase consumer awareness of the potential health risks associated with excessive sugar consumption. This measure can influence purchasing behavior and discourage consumption.
Introduce Vending Machine Taxes Sugar-Sweetened Beverage. Taxes can be imposed on sugar-sweetened beverages sold through vending machines. This approach targets a specific distribution channel and can discourage impulse purchases of unhealthy drinks.
Develop and implement Public Food Procurement Policies. Implementing fiscal policies at educational institutions, such as schools and universities, health and correctional institutions, can create a supportive environment for healthier choices. This can include offering discounts on healthier beverages in school cafeterias or vending machines. Developing and implementing a food procurement policy such as adopting the “WHO Public Food Procurement Policy for Healthy Diet” to the country’s contexts is crucial, particularly after the investments that have gone into reviewing the policy and regulatory pathways and identifying opportunities for population-level impact.
Develop and enforce sugar content labeling (Front-of-Pack-Labeling). Mandatory sugar content labeling on beverage containers can inform consumers about the sugar content of different products, enabling them to make more informed choices.
Create Public Awareness Campaigns. Investing in public awareness campaigns that highlight the health risks associated with excessive sugar intake can reinforce the impact of fiscal policies by driving behavioral change.
Invest in research, Monitoring & Evaluation. Supporting research and monitoring initiatives to assess the effectiveness of fiscal policies in reducing sugary drink consumption is crucial. Regular evaluation can inform policymakers about the success of implemented measures and identify areas for improvement.
Challenges and Considerations
While taxing sugary drinks and implementing other fiscal policies may seem promising, several challenges must be addressed to ensure their effectiveness.
Potential Resistance from Industry. The food and beverage industry may resist fiscal policies, for fear of potential revenue loss. Lobbying efforts from powerful industry players could hinder the adoption and implementation of such policies.
Distributional Impact. Fiscal policies, such as taxes on sugary drinks, may disproportionately affect low-income households, as they tend to spend a larger proportion of their income on these products. Mitigating this impact through targeted subsidies or social programs is crucial to ensure equitable outcomes
Success Strategies for Implementing Fiscal Policies
Implementing fiscal policies on sugary drinks can indeed be challenging due to potential resistance from the food and beverage industry, concerns about distributional impacts, and the need to balance public health goals with economic considerations. However, with careful preparation and cooperation, these difficulties may be overcome. Here are some approaches to overcoming the difficulties:
Build a solid database. Financial measures should be supported by solid scientific data that shows the connection between the consumption of sugary drinks and unfavorable health effects. This proof may be used to overcome industry resistance to the measures and win political and public support.
Engage stakeholders in the decision-making process, such as the food and beverage business, public health professionals, consumer advocacy organizations, and lawmakers. Including different stakeholders may result in a more well-rounded and knowledgeable approach to policy formation.
Gradual implementation of the policy is key. Consider implementing fiscal measures gradually to give firms time to acclimate and adapt. The gradual implementation of the policy might also provide the chance to track, assess, and tweak their effects as needed.
Implement a thorough monitoring and evaluation system to determine how fiscal policies affect the consumption of sugary beverages and their effects on public health. A regular review may provide insightful advice and assist in optimizing the policies’ performance.
Address distributional impact to consider how the policies may affect low-income families in terms of distribution. Investigate measures like targeted subsidies for healthier drinks or other social assistance initiatives to reduce any negative consequences.
Use the accrued revenues wisely. Transparently fund nutrition and health promotion initiatives using the money raised from taxes on sugary beverages. It is possible to show how fiscal policies have a beneficial effect by using the money for specific public health programs.
Leverage public support. Inform the populace of the justification for economic measures and any prospective health advantages. Obtain public support by launching public awareness campaigns and engaging in lobbying work to raise awareness of the need for healthier policies.
Collaborate with international organizations. To exchange best practices and draw on global experience on fiscal policies and public health, collaborate with international health organizations like the World Health Organization (WHO) and the United Nations.
Share success stories. Highlight examples of other nations’ successful implementation of taxation on sugar-sweetened beverages. Building trust in such programs’ efficacy may be facilitated by demonstrating good results from them.
Encourage Industry Innovation. Encourage the food and beverage industry to invest in research and innovation to develop healthier beverage options. Providing incentives for companies to reformulate products with reduced sugar content can foster industry collaboration.
Conclusion
Implementing fiscal policies on sugary drinks requires a well-thought-out approach that addresses the concerns of various stakeholders and prioritizes public health goals. By building a strong evidence base, engaging stakeholders, and carefully monitoring the policies’ impact, overcoming challenges and creating an environment that promotes healthier choices and improves overall public health outcomes is possible.