Governor Babajide Sanwo-Olu of Lagos State has been urged to intervene and ensure that several factories sealed by the State Water Regulatory Commission (LASWARCO) over unresolved water abstraction fees were reopened.
The Manufacturers Association of Nigeria (MAN) made the appeal in a letter by the association’s Director General, Segun Ajayi-Kadir, wherein it criticized LASWARCO’s recent actions, calling them “ill-timed and quite unfortunate.” Ajayi-Kadir noted that the closures occurred despite on-going negotiations and previous agreements aimed at resolving the matter.
“MAN is appalled by the inauspicious act of the Lagos State Water Regulatory Commission (LASWARCO) in sealing factories over their purported refusal to pay the astronomical and unjustifiable water abstraction fees imposed by the commission. This action is ill-timed and quite unfortunate, as the commission and MAN had engaged in meaningful dialogue and reached some agreements over the lingering issue about three months ago,” Ajayi-Kadir said. According to MAN, discussions between LASWARCO and affected manufacturers were advancing toward a resolution, with a Memorandum of Understanding (MoU) slated for implementation in January 2025. However, the association alleged that LASWARCO’s decision to shut down factories during the Yuletide season undermined the progress made in negotiations.
“Only three weeks ago, another round of discussions took place between LASWARCO and representatives of MAN, including affected member companies. It is while these discussions were on-going that the commission decided to cause this major and unwise shutdown of the companies,” he added. Highlighting the broader challenges facing manufacturers, Mr. Ajayi-Kadir painted a grim picture of the industry’s current state. He described how exorbitant water fees, alongside other regulatory pressures, are exacerbating an already difficult business environment.
“A situation where industries are burdened with payments in excess of N100 million for generating water for production purposes, in the face of government’s failure to supply same, is unfair. The exorbitant fees and the untoward means of extracting payment exemplify the negative impact of tyranny of regulation on private business,” he lamented. The association revealed that manufacturers nationwide are grappling with over N1.2 billion in unsold inventory, borrowing costs exceeding 30 per cent and a 250 per cent surge in power expenses. Furthermore, they face between 60 to 120 different taxes, fees, and levies imposed by various tiers of government and other entities,” he noted.
