The Manufacturers Association of Nigeria (MAN) has called on the Lagos State Governor, Mr. Babajide Sanwo-Olu, to urgently intervene in the recent closure of several factories by the Lagos State Water Regulatory Commission (LASWARCO).
MAN described the action as unjust, ill-timed, and detrimental to the manufacturing sector.
According to a statement issued by the association, LASWARCO sealed factories over allegations of non-payment of exorbitant water abstraction fees, which reportedly exceed N100 million per company.
MAN criticized the move, stating that it undermines ongoing negotiations and agreements reached between the association and LASWARCO, including plans for a Memorandum of Understanding (MoU) set to commence in January 2025.
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“This action is both inappropriate and disruptive,” said Segun Ajayi-Kadir, Director General of MAN.
“It comes at a time when manufacturers are already grappling with a harsh economic environment characterized by unsold inventory, high borrowing costs, and rising energy expenses.”
MAN noted that the closure of these factories poses a significant threat to the state’s economy, including potential job losses and a decline in investor confidence. The association highlighted that manufacturers nationwide are already burdened with over N1.2 billion in unsold goods, borrowing costs of over 30%, a 250% increase in energy expenses, and multiple taxes and levies from various tiers of government.
The association further warned that the imposition of excessive water abstraction fees by LASWARCO could set a troubling precedent for other states, exacerbating the challenges faced by private businesses.
MAN has urged Governor Sanwo-Olu to direct the reopening of the affected factories to allow for a logical resolution of the ongoing discussions.
The association emphasized the importance of concluding the MoU to establish a fair and sustainable framework for addressing water-related fees.
“We appeal to the Governor to act decisively to protect the manufacturing sector, safeguard jobs, and promote a business-friendly regulatory environment,” Ajayi-Kadir added.
As manufacturers await action from the Governor, MAN expressed hope for a swift resolution to prevent further disruptions and safeguard the livelihoods of thousands of workers.
