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 On Nigeria’s Sugar Tax Policy

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On December 31, 2021, the president signed into law a policy that would become a major weapon in our fight against obesity and overweight. The policy was part of the new finance bill, and it fixed a N10 sugar tax per litre on all carbonated and sugar-sweetened beverage (SSB) drinks.
According to the Minister for Finance and National Planning, Mrs Zainab Ahmed, the tax is meant to discourage excessive sugar intake; but it is also an avenue to generate the much needed revenue to strengthen health care delivery in the country. It is estimated that the sugar tax will generate as much as N81 billion in three years.
The federal government is following after 50 other countries that have implemented a similar sugar tax, including South Africa in 2016 and UK in 2018. These countries have seen more than expected reductions in sugar intake since their policies became active.
In Nigeria, the sugar tax is a welcomed development and a major step in the fight against the evil Siamese twins of obesity and overweight; and this is why the National Action on Sugar, a health coalition for advocating for policy measures to combat non-communicable disease, views the policy as a preventive measure. Also, the Nigerian Cancer Society, while commending the federal government, noted that non-communicable diseases account for one in three deaths in the country.
SSB has been linked with obesity, Type 2 diabetes, overweight, tooth decay and cardiovascular diseases, according to a 2010 World Bank report. Obesity and overweight are further associated with other health complications, such as heart disease and certain types of cancer and stroke. Globally, obesity and overweight are now ranked as the third leading cause of death for adults. A 2016 report by Statista, a global data firm, indicates that around 1.9 billion people are overweight globally; and out of this number, 650 suffer obesity. The figure for Nigeria as of 2020 was 12 million.
Research has shown a strong correlation between SSB and obesity-overweight. The evidence is overwhelming, and it should scare us. For instance, according to Statista, Nigeria is the fourth largest consumer of soft drinks after the US, China and Mexico.
Apparently, we are number one in Africa, consuming more than 40 million liters of soft drinks per annum. In fact, the estimated year-on-year volume growth for 2022 is 0.5 percent – meaning that Nigerians will consume a whopping 73,567,500 liters of soft drinks this year.
So far, there have been major attacks on the policy from the Manufacturers Association of Nigerian (MAN) and the Nigerian Labour Congress (NLC). Their arguments have been targeted at the two main aims of the policy; namely discouraging excessive sugar intake and revenue generation to support the 2022 budget.
They asserted that there were other avenues of major sugar intake aside from soft drinks, especially our heavy carbohydrate diet. On the revenue side, they picked holes in the federal government’s revenue projections.
According to MAN’s estimate, the federal government will lose up to N197 billion in VAT, tertiary tax, and company income tax. MAN further contends that the implementation of the policy will trigger the loss of N1.9 trillion in the sector over the next five years; and that the consumer will be on the receiving end, bearing the full brunt of the policy.
In the same vein, the NLC is concerned that as many as 15,000 jobs could be on the line as a result of the policy. They argue that the impact of the policy could be far-reaching, considering the current unemployment rate of 33 per cent; and the fact that 38 per cent of the total workforce of MAN is domiciled in the soft drinks sub-sector.
The primary intent of the policy is laudable, but the idea of generating revenue is completely flawed, consequently making the policy deficient, and neither MAN nor NLC addressed this deficiency in their opposition to the policy. For instance, the UK government estimated about £500 million from their own sugar tax; but in 2020, the tax generated only £33 million due to the compliance component of the policy.
The UK sugar tax termed soft drinks industry levy (SDIL) took off in 2018, and since then a myriad of reports have shown its effectiveness in the reduction of sugar intake, both for households and residents. One report indicated that the SDIL is responsible for the reduction of sugar intake of nearly 6500 calories per resident, and a reduction of about 30g per household per week. The SDIL has a layered structure, whereby, soft drinks having eight grams of sugar per 100 ml is taxed £0.24 per litre.
Contrary to the position of MAN an NLC, available research has not shown any overall decline in the sales of soft drinks in the UK, indicating that the policy is actually achieving the intended result without any negative consequence on the soft drinks industry. A similar result was seen in South Africa after the implementation of their own sugar tax in 2016. A report from The Lancet indicates that the policy prompted an industry-wide sugar content reduction.
However, the Nigerian sugar tax, in spite of being a major step in the right direction, is deficient. Unlike the UK sugar tax, the Nigerian sugar tax is structured in a manner that perpetually puts the burden on the consumers. It does not incentivise innovation among the soft drinks manufacturers that is capable of leading to sugar content reduction in their products.
For instance, sugar reduction was seen in the UK and South Africa before the implementation of the policy. Before 2018, most of the soft drinks manufacturers in the UK have reduced their gram per 100 ml. Most of the manufacturers producing above five grams per 100 ml brought their sugar content to 4.5 grams per 100 ml; while those producing at above eight grams per 100 ml brought their content to about 7.5 gram per 100 ml.
The Nigerian policy of N10 per litre is a disincentive for change. In the long run, it might not be effective as compared to the SDIL of the UK which has spurred an industry-wide sugar revolution of immense benefits both to the consumer and the soft drink manufacturers. The federal government should take another look at the policy in a bid to better it by addressing the inherent deficiencies in order for the policy to achieve its primary aim.
In the first instance, the federal government should stipulate an acceptable sugar-content level per litre instead of the N10 per litre which is arbitrary, and disregards sugar content level. Secondly, the federal government should jettison the idea of using the policy to generate revenue; rather, it should amplify the health benefits of reducing excessive sugar intake. If this is done, MAN, NLC and other members of the organised private sector will fully be onboard

By: Raphael Pepple

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Opinion

 Of Looming Food Scarcity In Nigeria

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In the course of the week, there were several warnings about an impending food crisis in the country. Farmers and other stakeholders in the agricultural sector, raised an alarm over the impending food crisis in the country baring urgent government intervention. The President of All Farmers Association of Nigeria (AFAN) warned that should the prices of fertilizer continue to rise, this year’s rainy season farming and harvest will be affected and of course, that will mean reduction in food supply to the citizens.
In his words, “Last year, because the Presidential Fertilizer Initiative (PFI) did not give the usual subsidy to supply 20:10:10 at N5, 500, farmers could not afford the commodity as in previous years and this is directly proportional to the hike in food prices today and if the prices of fertilizer remain like this, there will definitely be corresponding food inflation in the country.” Investigation shows that the average price of a 50kg bag of NPK fertilizer, mostly used by Nigerian smallholder farmers, has surged by 112.5 percent to N17,000 from last year’s N8,000.  Similarly, a 50kg bag of urea fertilizer sold for N6,000 last year, now goes for N17,000.
Still within the week, the Executive Secretary, ECOWAS Rice Observatory, Dr  Boladale Adebowale, disclosed that about 19.4 million Nigerians will face food crisis, and nutrition insecurity by August this year, owing to insecurity, adverse weather conditions, climate change, low mechanisation, poor seed quality and varieties, low access to agric credit, low agro-processing capacity, low investment in agricultural research, high prevalence of systemic inefficiencies and other factors threatening the agricultural sector. These reports are very scary, to say the least. Already, it is very hard for many people to feed their families due to the high cost of food items in the markets. There is virtually no food item whose price has not tripled in the past couple of months, yet the salaries of workers, particularly the government workers remain the same and we are told to expect harder days?
Not even the assurance of the President of African Development Bank (AFDB), Dr Akinwumi Adesina, that Africa will not experience food crisis because of the “High 5” programmes of the bank which centre on feed Africa, can assuage this fear. Nigeria’s case might be different from that of other African countries that the AFDB was talking about. We are on ground and we know that many Nigerians are dying of hunger. I belong to the welfare committee of my church which caters for the downtrodden in the society. People donate bags of rice, beverages, condiments and other food items which are shared to the poor weekly. It is heart wrenching seeing the large number of families that always queue up for the tiny quantities of food. Some of them tell tales of how that might be the only sure food for their families in many days.
Sadly, this is happening in a country where those in authority both at the federal and state levels are busy embezzling billions of naira meant for the poor masses; where politicians are dolling out N100million each to purchase party presidential forms. Yes, we know that there is a global surge in fertilizer prices, occasioned by the Russia-Ukraine crisis that has cut off shipments from the Black Sea region that accounts for 30 percent of the major grain trade and at least 12 percent of food calories traded. We are not oblivious of the fact that with the disruption in the global supply chain caused by the crisis in the black sea region that accounts for almost a third of the world’s wheat export, Africa, of course Nigeria inclusive, now faces a shortage of at least 30 million metric tons of food, especially wheat, maize, and soybeans imported from both countries.
But the question remains, over the years, what has the government at various levels done to increase food production in the country and how are they taking advantage of the present precarious food situation to boost our local production of both fertilizer and other agricultural products that will enhance adequate food production in the nation?
During the commissioning of the $2.5 billion Dangote Fertilizer plant at Ibeju-Lekki, by President Muhammadu Buhari, last March, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, made bold to announce that the number of fertilizer blending plants in Nigeria, has risen from seven to over 48, since the assumption of office by Buhari in 2015, adding that 35 million blended bags of fertilizer have been produced in the country within the last five years.Many analysts have however wondered about the positive impact of the said increased numbers of fertilizer plants since fertilizer, a critical input needed to boost the fertility of farmlands, is still beyond the reach of many farmers. They have also warned of the danger of allowing one capitalist to monopolise fertilizer production industry in the country, emphasising that that might not make fertilizer affordable, especially going by what obtains in the cement industry where Dangote cements are cheaper in other African countries than in Nigeria.
Many Nigerians will therefore want to see more competition in the fertilizer production business through the government’s establishment of more fertilizer plants in different parts of the country or creating a conducive atmosphere for other private investors to do so.Agricultural experts have called for the use of the right policy and technology to curb post-harvest losses in order to boost food production and lower the prices of foodstuffs in Nigeria. They insist that reduction in post-harvest losses and food processing must be encouraged in order to curb food shortage in Nigeria. Studies have shown that African post-harvest loss can be as high as 50 percent in vegetables, fruits and root tubers and 25 percent in cereals. Proper processing of these large quantities of items will definitely make a huge difference.
Meanwhile, the much talked about insecurity in the country is still a big factor in the clog of the wheel of sufficient food production in the country. And until something is done towards curbing the spate of insecurity across the country, all efforts towards forestalling the food crisis in the country might be futile. According to the United Nations Food and Agriculture Organisation (FAO) reports, over 70 percent of Nigerians work in the agriculture sector, mainly at subsistence level.  A good number of these people have either fled their homes because they are afraid of being attacked by gunmen terrorising different parts of the country or they are still in their communities but can no longer carry on with their faming activities for the fear of being kidnapped or killed or their farmlands have been taken over by the gunmen.
For instance, a good number of businessmen who went into tomatoes and other crops farming in Anambra State some years back are said to have closed shops due to the criminal activities of unknown gunmen who have made the state very uninhabitable. It is therefore imperative that to avert the looming food crisis in the nation, the government should take sincere measures towards solving the insecurity problem in the country. Some people have often opined that if the politicians and those in power put their selfish or whatever interest behind and work towards bringing an end to the insecurity problems that is tearing this country apart, there will be a remarkable change and there is no better truth.
Again, the endemic corruption in the nation must be addressed if this country must move forward.

By: Calista Ezeaku

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Opinion

Freedom To Move And Settle

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Far back as May 1964, there was a security report about some secret plans to use cattle to foster expanded settlements and population figures. It was unfortunate that those involved in putting together that report were not only reprimanded and cautioned, but reposted to other beats. Between that time and 1970, cattle were involved in census controversy, movements of troops and land acquisition. This issue is raised because of a habit of discarding a message because of the status or face of the messenger.
Controversies, shenanigans and attacks following a recent meeting of 17 Southern Governors and the positions they articulated on national issues, clearly portray the old suspicion of some hidden agenda. While Northern Governors, Elders and Youths had been meeting and taking decisions on national issues without much ado, a similar meeting by Southern Governors creates alarm. As to be expected, we can see the old game of creating a division in family meetings for the purpose of forestalling or weakening solidarity.
The integrity of a nation is such that no individual or a group of persons, no matter how highly placed, should do anything to undermine it, without being called to order. The Tide newspaper of Monday, January 21, 2019, carried a headline news, saying: “Obasanjo Slams Buhari Again, Says Another Abacha Era Is Here; INEC Lacks Integrity To Conduct 2019 Polls”. An elder statesman like Obasanjo would surely not speak carelessly without having some background facts.
Similarly, Obasanjo would not have raised a false alarm about Islamisation and Fulanisation without reliable security information. Femi Fani-Kayode was also quoted as alleging that “President Buhari’s Fulani cabal has conquered Nigeria”. He went on to say that “Northerners are heading most of the sensitive positions in the country”. The Catholic Bishop of Sokoto Diocese, Most Rev. Matthew Kuka, who is neither a politician nor a Southerner, also warned the Federal Government under Buhari against fanning embers of civil war. He said that the federal government was using different methods to achieve the goal of Islamic dominance in Nigeria, a secular state.
The Tide Editorial Comments of Friday, February 8, 2019 titled: “Nigeriens And Kano APC Rally” lamented that “two Nigerien governors were in Kano to rally support for President Buhari’s re-election”. Anyone would wonder if the integrity and sovereignty of the Nigerian nation are not being compromised, following the above observations. Foreigners voting in elections?
More importantly, the strategy of deploying cattle as the instrument of advancing some hidden agenda becomes quite glaring, with the attitude of the federal government towards numerous complaints against herders. From the issue of RUGA settlements, to the strategy of setting up a commission on herders, there are obvious indications of spirited efforts to promote some agenda, pointed out in a 1964 security report, for which some operatives were reprimanded.
In an editorial comment of Wednesday, July 10, 2019, The Tide newspaper wrote: “the Federal Government has no business intervening and lobbying for cattle rearers to spread their tentacles across all cities and communities in the country…” In another editorial comment titled No To Herders’ Commission”, The Tide (Wed; March 17, 2021) wrote “Mr Malami’s proposal for a commission for pastoralism must be rejected and consigned to the refuse heap of unhelpful and injurious initiatives as RUGA and cattle colonies because it is insincere, ill-motivated, wasteful and mere shadow-chasing venture in its intentment”.
Apart from these shenanigans, the Federal Government, under President Buhari, gave a gift of N150 billion to the association of cattle breeders known as Miyetti Allah, as a support for their business. Today, Southern Nigerians are becoming increasingly uncomfortable and also suspicious of the position of the APC-led Federal Government of Nigeria over the attitude towards the cattle issue. The level of destruction done to farm crops and the disruption of farming activities in communities in Southern Nigeria by cattle, are perhaps trivial issues that should not concern the federal government.
Some months ago, women and embittered people of Okutukutu-Epie a Bayelsa community, took their protest to the Government House in Yenagoa over their sad experiences with and threats from herders. Several other communities have pathetic tales of bitterness and woes arising from their encounters with herdsmen in their farmlands.
The question of herders occupying forests in rural communities with several herds of cattle and with no permission to settle in such forests, should be addressed promptly. Many highly-placed Northerners have condemned the decisions of Southern Governors on open grazing which they insist should continue. The issue of right of movement and settlement has been cited as a reason why herders and their cattle should have free access to anywhere, but such logic ignores the condition that right goes with responsibility. Farmers have been terrorised in their farms.
Occupying another person’s farmland and obstructing such person from his means of livelihood amounts to an abuse of right of movement or settlement, especially when such intruder acts with impunity. It is important to alert the Rivers State Government that a vast forest area stretching from ONELGA to Delta and Bayelsa States, is currently being occupied by herdsmen and their cattle. A private investigation revealed that many of the herders are non-Nigerians and, apart from having concealed weapons, they have no intention to move out. Let this hint not end like a 1964 report.
If the Fulani race in diaspora across the West African sub-region must be given a homeland to settle, like the Jews after the World Wars, then let this be an open rather than a clandestine affair. The current situation between Israel and Palestine should serve as a lesson. Sympathy cannot be won by blusters, neither should Southern Nigerians be seen as a conquered people. Southern Governors should see the “hand writing on the wall” now.

By: Bright Amirize

Dr Amirize is a retired lecturer from the Rivers State University, Port Harcourt.

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Opinion

 Unemployment: Have We Lost It In Nigeria?

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Since the advent of democratic rule in 1999, one challenge that does not seem to go away in a hurry is the cross-cutting and often depressing issues of unemployment. The solar plexus of every macro economy is job creation as an instrument of poverty reduction and wealth creation. Year after year, budgets are passed and monies are appropriated, yet not much is seen in the aspect of industrialisation and employment generation. So many university graduates search for jobs eight years after they are done with national service. The rate of unemployment in Nigeria is so high that even the social cost of the menace is crippling. The lack of industrialisation and promotion of empowerment through  rejuvenation of small and medium scale enterprises, SMEs, is the reason the Buhari administration has embarked on some phoney social investment programmes such as N-power, start-up loans and school feeding programmes , which to say the least, are merely scratching the problem on the surface.
If the National Bureau of statistics put the unemployment figure at 33.3per cent, then the real figure could be much higher than 37per cent.The statistics are really bad. The National Bureau of statistics shows that 2014, 2015 to 2016, unemployment rate was 4.56per cent, 4.31per cent and 7.06per cent respectively. It was projected that in 2021, unemployment rate would hit 40per cent. For a nation eager to develop key sectors of the economy, the scourge of unemployment not only poses a serious economic threat; it also triggers security threat to the stability of the nation. Unemployment is characterised by financial hardship, poverty, reduction of family income and increase in dependency ratio.
The causes of unemployment in Nigeria are not far-fetched. Nigeria is blessed with abundant human and material resources, but successive administrations have crippled the economy by mismanaging the resources. Apart from being the poverty capital of the world, Nigeria is one of the most corrupt nations in the world. Besides, our policy makers have always adopted the wrong approach to job creation. Added to the aforementioned is the poor investment climate in the country. There is dearth of physical infrastructure, power supply,  good roads and adequate security infrastructure. Rural unemployment is mainly caused by frictional and residual factors. Most rural dwellers do not have the requisite skills and competence to manipulate economic processes.
In a country where so much of the educated population is killed, the rural folks who have no skills remain unemployed. Some people also decide to engage in occupations that can enable them sustain their households. Even when such people secure paid employments, they can voluntarily choose not to work. Seasonal unemployment occurs when people get employed during a period when certain economic activities heighten. Such people are laid off as soon as the season is over. Recently, the main cause of unemployment is the global economic crisis. This is also caused by neglect of technical and vocational education. Worse still is the neglect of agriculture which was the mainstay of Nigeria’s economy in the first two decades after independence.
During the Second Republic,  President Shehu Shagari introduced the Green Revolution Programme. Prior to that, the Obasanjo military junta initiated the Operation Feed the Nation programme in 1978. Instead of making Nigeria to move towards self-sufficiency, the country imported more food. The bane of these programmes was corruption in the executive organ of government. The programmes died without changing the narrative.Unemployment has had debilitating impact on people and the economy of the Nigeria nation. So many people who have been trained to acquire high caliber manpower are wasted.
Today, so many trained pharmacists, nurses, engineers and other para-professionals are wasted or under-employed because of lack of vacancies. No economy can grow with huge aspect of its manpower being wasted. Qualified manpower is brain-drained out of the country in search for greener pastures. The feeling of hopelessness among the unemployed youths lead to despair and triggers deviance, crimes and insecurity in most urban areas in Nigeria are yet to contend with the rising spate of urban crime and its attendant negative effects. In Nigeria today because of social insecurity, the rank and file of terrorism and insurgency is populated by youths, some of them, highly educated.
There is also the challenge of low standard of living and rural- urban migration.When a huge number of youths are unemployed, the country loses a lot of tax revenue and this hinders the development of infrastructure.In the Niger Delta Region of Nigeria, unemployment heightens militancy, oil bunkering and violence associated with those activities. Similarly, in the Sahel region, it triggers farmer/herders clashes and banditry. Nigeria must use labour-intensive technology. There is need to accelerate investment in agriculture as the sector is a major source of employment and food security. No sector of the economy can provide jobs like the agriculture sector and its value chain.
Agro-allied industries are the major employers of labour in Australia, India and Canada. Nigeria provides a good climate for agro-industrialisation and diversification. The same goes to adequate investment in Information and Communication Technology (ICT) and strategically training and employing graduates in the sector. ICT is second to oil in terms of foreign exchange. Nigeria has the advantage of population to provide market for any ICT product. It has become dear that ephemeral programmes such as N-Power, school feeding programme and other social investment ventures cannot endure because they have low penetration to affect the critical mass of those who have skills but are unemployed.
Government must evolve a policy regime through the intensification of techno- vocational education to increase the capacity of the economy to absorb millions of unemployed Nigerians in the banking, ICT, agriculture, housing and construction sector and the mainstream of the bureaucracy.

By: John Idumange

Idumange is a public intellectual.

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