Nigeria’s New Alcohol Excise Schedule Falls Short of What Is Needed to Reduce Affordability

“FG cuts vehicle tariffs, imposes new duties on drinks, tobacco”

Punch reports:

“The government also approved excise duties on non-alcoholic and alcoholic beverages, cigarettes, and tobacco products, alongside a Green Tax Surcharge expected to take effect from July 1, 2026.”

“A grace period of 90 days commencing from the date of this circular is hereby granted to all importers, manufacturers, and service providers before the implementation of the new excise duty rates.”

“FG approves 2026 Fiscal Policy Measures, cuts tariffs on cars, others”

Premium Times reports:

“The Policy Measures are for the implementation of the ECOWAS Common External Tariff (CET) 2022–2027 and excise duties on non-alcoholic beverages, alcoholic beverages, cigarettes and tobacco products, as well as Green Tax Surcharge.”

Assessment

The inclusion of alcohol in Nigeria’s 2026 Fiscal Policy Measures is an encouraging development. For years, alcohol excise tax reform has stalled despite mounting evidence of alcohol harm and repeated calls from civil society organisations and international institutions. That the Federal Government has now formally approved a new alcohol excise tax schedule – with rates that do increase over a three-year horizon – represents a policy step in the right direction and a foundation that advocates can build on.

At the same time, the rates themselves are set too low to meaningfully reduce alcohol affordability and harm:

• At the current exchange rate of approximately ₦1,360 per dollar, the beer excise of ₦72 per litre amounts to roughly $0.05 – a negligible price signal by any global standard.
• Nigeria experienced annual inflation of 31.4% in 2024 and inflation is still running at approximately 15% in early 2026, yet the new specific rates do not represent a meaningful step up from the preceding schedule.
• The three-year schedule locks in fixed nominal amounts with no automatic inflation adjustment, meaning the real value of the tax will decline every year.
• By 2028, the beer rate of ₦80 per litre will be worth significantly less in real terms than ₦72 is today.

The World Bank’s own assessment remains relevant. Under a $750 million reform programme, the World Bank has tied part of its funding to Nigeria issuing a presidential order to raise alcohol excise duties. As recently as May 2025, the Bank warned that Nigeria’s excise rates on alcohol remain “very low” and that the required reform had not yet been adopted. This circular does not appear to meet that threshold.

Nigeria’s 2026 excise schedule presents both an opportunity and a cautionary example. The fact that alcohol excise reform is now on the government’s agenda marks genuine progress. The alcohol tax reform initiative comes at a moment when Nigeria’s broader alcohol policy landscape is active, with NAFDAC defending its sachet alcohol ban against alcohol industry interference.

But the excise schedule also illustrates a pattern seen across several countries: governments announce “new” alcohol taxes that in practice maintain alcohol affordability when measured against inflation and income growth. The advocacy priority now is to make the case for alcohol tax rates set at levels that meaningfully reduce affordability, with automatic inflation adjustment built into the schedule – benchmarks that the alcohol policy best buys clearly define, and that this first step falls short of, but that are now within closer reach.

Annex IV rate schedule (from the 2026 Fiscal Policy Measures circular, 1 April 2026)