A fresh storm is brewing in Nigeria’s economic space as the Senate’s plan to raise excise duty on non-alcoholic drinks meets stiff resistance from economists and concerned citizens.

The proposal, which seeks to amend the current N10-per-litre Sugar-Sweetened Beverage (SSB) tax into a percentage charge on the retail price, has drawn widespread criticism. The amendment bill, sponsored by Senator Ipalibo Harry Banigo, suggests that the extra revenue should be directed into the nation’s health sector.

But many Nigerians argue the timing is wrong.

On Monday, the Centre for the Promotion of Private Enterprise (CPPE) warned that the move could force beverage companies to shut down operations, trigger fresh price hikes, and worsen unemployment.

Former President of the Chartered Institute of Bankers, Mazi Okechukwu Unegbu, and university lecturer Prof. Godwin Oyedokun echoed the same concerns.

Unegbu noted that Nigerians are already overwhelmed by multiple taxes and economic hardship.

According to him, “This is not the time to burden people further. Government should hold off any new tax increase for now.”

Prof. Oyedokun, who specializes in public finance, said the plan could worsen inflation and cripple small businesses already struggling to survive rising costs.

In a statement issued on Tuesday, he explained that the tax targets products consumed daily by millions—soft drinks, flavored beverages, energy drinks and other low-priced bottled drinks often used as cheaper alternatives by families.

He warned that manufacturers would simply pass the extra burden to consumers, leading to immediate price increases.

“Households battling high inflation will feel the hit the most—students, artisans, and low-income families,” he said.

Small businesses like roadside shops, event vendors, restaurants and neighborhood kiosks may also suffer reduced sales, he added, since beverages make up a major portion of their daily earnings.

“For many small traders, beverage sales keep their cash flow steady. A drop in consumption could chase some out of business,” Oyedokun cautioned.

He also raised concerns about job losses across the beverage value chain from factories to distributors if sales decline and production volumes drop.

The economist questioned whether the policy would even deliver the revenue government expects.

He argued that consumers may switch to cheaper alternatives or turn to unregulated markets, weakening potential gains.

More importantly, he described the proposal as poorly timed, coming at a period when Nigerians face soaring inflation, transport costs, energy bills and declining purchasing power.

“At a time like this, another consumption tax feels completely out of touch,” he said.

Oyedokun also reminded the government that similar excise duties were suspended in 2023 after strong pushback from manufacturers and labour groups.

A fresh attempt, he said, signals inconsistency and could discourage investors seeking policy stability.

He urged the Federal Government to consider broader tax reforms expanding the tax net, blocking leakages, strengthening administration and supporting job-creating sectors rather than targeting everyday consumer goods.

“In the end, while revenue is important, the economic and social costs of this excise increase seem far heavier than the benefits,” he concluded.

“Consumers, small businesses and workers need breathing space in an already stretched economy.”