By Fatimah Alli
The Manufacturers Association of Nigeria has tasked the Lagos State Governor, Babajide Sanwo-Olu on the urgent need to reopen factories sealed by the Lagos State Water Regulatory Commission, following allegation non-payment of water abstraction fees.
MAN in a statement made available on Friday described the closures as “unwarranted and ill-timed,” accusing LASWARCO of disregarding ongoing discussions aimed at resolving the disputed fees.
The body disclosed that the development had prompted it to write an open letter to governor Sanwo-Olu, after “..all attempts at approaching the relevant heads of agencies and ministry have failed.”
MAN particularly expressed dismay over the decision to seal the factories during the Yuletide season, stating that government’s actions “unwise” and runs contrary to the state’s economy and against the interest of the manufacturers.
The Director-General of MAN, SegunMAN Director-General, Segun Ajayi-Kadir, expressed displeasure by saying that, “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 also disclosed that MAN had engaged in negotiations with LASWARCO, resulting in agreements that were supposed to culminate in a Memorandum of Understanding in January 2025.
Kadir emphasized that, “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,”
Similarly, MAN condemned excessive costs imposed on manufacturers in Lagos, noting that water fees exceeding N100m, borrowing rates of over 30 per cent, and a 250 per cent hike in power costs constitute a huge burden to members of the association.
“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,” he explained, warning that the closures could lead to unemployment and further strain an already volatile business environment.
The association noted that such regulatory actions send negative signals to investors and undermine private sector growth.
Ajayi-Kadir therefore called upon the Lagos State governor to intervene by reopening affected factories in order to pave the way for resolution of the issue, staying that “This will pave the way for a logical and passable conclusion of the ongoing conversations.”
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February 19, 2022
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