The Manufacturers Association of Nigeria has urged Lagos State Governor Babajide Sanwo-Olu to intervene and reopen factories sealed by the Lagos State Water Regulatory Commission.
These closures were reportedly due to alleged non-payment of water abstraction fees.
In a statement on Friday, MAN described the closures as “unwarranted and ill-timed,” arguing that LASWARCO ignored ongoing discussions to resolve disagreements over the fees.
MAN disclosed that it resorted to an open letter to Governor Babajide Sanwo-Olu after unsuccessful attempts to engage relevant agencies and ministries.
MAN criticized the decision to seal factories during the Yuletide season, describing it as “unwise” and harmful to both the manufacturing sector and Lagos State’s economy. T
MAN Director-General, Segun Ajayi-Kadir, said, “MAN is appalled by the inauspicious act of 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 expressed disappointment that the factories were sealed despite these ongoing discussions, calling the action premature and counterproductive to resolving the dispute amicably.
“Only three weeks ago, another round of discussions took place between LASWARCO and representatives of MAN including affected member companies, which led to ongoing discussions in the companies as to the most viable option for addressing the alleged outstanding payments from earlier contested fees.
“It is while these discussions were going on and during the Yuletide that the Commission decided to cause this major and unwise shutdown of the companies,” he noted.
Further, the association decried the excessive costs manufacturers face in Lagos, citing water fees exceeding N100m, borrowing rates of over 30 per cent, and a 250 per cent hike in power costs.
Ajayi-Kaddir explained, “The exorbitant fees and the untoward means of extracting payment exemplify the negative impact of the tyranny of regulation on private business. To date, manufacturers across the country are saddled with more than N1.2bn of unsold inventory, borrowing at more than 30 per cent and struggling under a debilitating 250 per cent increase in the cost of power.
“Numerous taxes, fees and levies by the three tiers of government and non-state actors in some cases, numbering between 60 to 120 confront each manufacturer, not to mention the disruption of production activities due to insecurity and high cost of logistics.”
MAN warned that the factory closures could result in significant job losses and worsen the already challenging business environment.
The association argued that such regulatory actions deter investors and undermine private sector growth, calling for a more collaborative and business-friendly approach to resolving disputes.
Ajayi-Kadir urged Sanwo-Olu to intervene and reopen the affected factories to facilitate a resolution of the issue, remarking “This will pave the way for a logical and passable conclusion of the ongoing conversations.”
He added that the private sector is awaiting the finalisation of the MoU text from LASWARCO.
Ajayi-Kadir emphasised the broader implications of the dispute, stressing “The possible loss of jobs and its attendant socioeconomic implications… should serve as a deterrent and encourage a business-friendly regulatory environment.”
