The Nigeria Employers’ Consultative Association has stated that the closure of factories belonging to major manufacturing companies in Lagos by the Lagos State Water Regulatory Commission, due to alleged non-payment of water abstraction levies, could deter potential investors.
NECA also expressed concern that the move could heighten employees’ fears about job security and paint the state as unfriendly to legitimate businesses.
This was disclosed in a statement by the Director-General of NECA, Mr. Wale Oyerinde, on Wednesday.
Oyerinde urged LASWARCO to support struggling businesses and cease what he termed an ongoing misinformation campaign and media onslaught, which he described as “economic sabotage.”
He added that the reported closure of businesses for alleged non-compliance with water abstraction regulations was not only misleading but also likely to send a negative message about Nigeria’s already challenging business environment.
“The reported comments and activities of the commission have the damaging potential of scaring away investors, aggravating employees’ apprehension about the security of their jobs, and portraying Lagos State as unwelcoming for legitimate businesses,” Oyerinde said.
He noted that these issues are arising at a time when many multinationals are either exiting the country or undergoing global restructuring, with Nigeria and Lagos, in particular, being among the hardest-hit by divestments and job losses.
“It is no gainsaying that businesses have faced probably the harshest economic situation in recent times, with many declaring humongous losses.
“It is, thus, expected that the commission will be innovative enough to come up with legitimate ways to generate revenue without adding to the woes of businesses by demanding unjustifiable multimillion amounts as water abstraction levies from businesses that already pay many other forms of taxes for the same activities, they use the water for,” he said.
The NECA DG stated that it is the government’s responsibility to provide water for its citizens and businesses.
However, Oyerinde added that in a situation where the government fails to fulfill the responsibility for whatever reasons, “it will be highly insensitive, harsh and punitive for the same government that has failed to adequately provide water to also impose punitive levies on businesses that are constrained to make investments in providing water to run their businesses.”
Oyerinde expressed concern that the commission’s actions are particularly troubling given the ongoing discussions with a segment of the Organised Private Sector to resolve the issues amicably.
He reiterated that while some companies had been forced to pay to avoid disruptions to their operations, NECA advises against the unproductive tactics being employed by the commission.
“It should be noted that organised businesses are not against responsible regulation, however, we will embark on all legal and legitimate means to resist any form of high-handedness that does not demonstrate empathy with the plight of struggling Nigerian businesses,” Oyerinde warned.
He advised that in the pursuit of revenue generation, the commission and all other regulatory agencies should adopt a more legitimate and civil approach, rather than the disruptive tactics of recent times, which undermine the Federal Government’s efforts to attract investment, promote job creation, and ensure responsible regulation.
He appealed to Lagos State Governor, Babajide Sanwo-Olu, to intervene in the matter and prevent further challenges for businesses in Lagos.
