In April 2026, the Senate passed the National Health Act (Amendment) Bill, 2026, which would double the statutory allocation to the Basic Health Care Provision Fund (BHCPF) from 1% to 2% of the Consolidated Revenue Fund. The Bill has since received its first reading in the House of Representatives.

Another measure looks at how health-related revenue could be raised, and where some of it should go. In June 2026, the Senate passed an amendment to the Customs, Excise Tariff, etc. (Consolidation) Actthat would replace the current ₦10-per-litre excise duty on sugar-sweetened beverages (SSBs) with a percentage-based levy linked to retail price. The Bill provides for part of the revenue to be directed towards health promotion, disease prevention, primary healthcare, and health insurance for poor and vulnerable Nigerians.

Both measures still require action by the House before they can proceed towards presidential assent.

Why the current tax is falling behind

Nigeria introduced the ₦10-per-litre SSB excise in 2022. Four years on, the rate remains ₦10 per litre. With prices rising substantially over that period, the real value of a fixed nominal tax has steadily eroded.

This is the challenge that health tax policy aims to avoid, ensuring that the value of health taxes keeps pace with changing prices. The World Health Organization (WHO)’s 3 by 35 Initiativecalls on countries to use tax increases to raise the real prices of tobacco, alcohol and sugary drinks by at least 50% by 2035. Its latest global assessment shows that at least 116 countries already apply a national excise tax to at least one type of sugary drink.

The more important question is whether Nigeria’s taxes on these products are designed strongly enough to reduce affordability and, in turn, consumption.

The Senate’s proposal to replace the fixed ₦10 levy with a percentage of retail price would make the tax more responsive to price changes. However, that still leaves a design question unresolved. WHO generally favours excise taxes based on the quantity of a harmful product or its unhealthy ingredient, such as sugar, rather than its value. These structures can also give manufacturers a clearer incentive to reformulate products.

If Nigeria adopts a retail price-based levy, the rate-setting process must be transparent and strong enough to influence both prices and consumption.

Under Nigeria’s 2026–2028 fiscal schedule, cigarettes attract a 30% ad valorem excise plus a specific tax of ₦6 per stick from July 2026, rising to ₦7 in 2027 and ₦8 in 2028. ECOWAS standards set a higher benchmark, requiring a minimum ad valorem rate of 50% on the relevant tax base and a specific tax of at least US$0.02 per cigarette or US$0.40 per pack of 20. Nigeria’s current schedule remains below that regional standard.

The revenue question

Health taxes are first and foremost a public health tool, designed to make harmful products less affordable and reduce consumption. The revenue they generate provides an additional source of public financing.

In Nigeria, however, health tax revenues are not systematically linked to health financing. That matters in a country where out-of-pocket payments account for up to 71.9% of current health expenditure; this is particularly significant. The National Health Insurance Authority (NHIA) reported in July 2026 that more than 22 million Nigerians were enrolled in health insurance, an important gain following years of very slow progress, but it still leaves a substantial coverage gap.

If part of SSB revenue is allocated to health, the legislation and its implementation should clearly set out the details. How much will be allocated, through what mechanism, to which programmes, with what reporting requirements? How will the government protect existing health budgets, so that earmarked revenue genuinely adds to them? WHO cautionsthat earmarking alone does not guarantee higher or more predictable public health spending.

The politics cannot be ignored

Private sector groups have opposed the SSB Bill. The Centre for the Promotion of Private Enterprise has urged the House not to concur, citing high production costs, weak consumer demand, employment concerns and the need for a predictable tax policy. The Manufacturers Association of Nigeria has also opposed the proposed changes.

Those concerns form part of the policy debate, alongside the public health case for a well-designed tax to reduce consumption. With campaigning for the 2027 presidential and National Assembly elections underway, political attention will increasingly shift towards the January elections.

The House should conclude consideration of both Bills while there is still a legislative window to do so. The Ministry of Finance should set out a transparent method for determining and reviewing the SSB rate, while the Federal Ministry of Health and Social Welfare and the NHIA should clarify how any dedicated revenue would be allocated and tracked. In addition to setting out how the use of the funds will be reported publicly.

The Health Tax Task Team, launched in August 2026 by partners including the NHIA, Development Governance International (DGI) Consult, and HSDF, with support from the Alliance for Health Policy and Systems Research, provides a platform for coordinating this work across health, finance, and revenue institutions, legislators, civil society, and researchers.

Nigeria has spent years building the case for stronger health taxes; implementation is now key. The approaching elections give legislators less political space to leave these decisions unresolved. Scrutiny remains essential, but it must now lead to a decision.