MAN condemns Lagos Govt. sealing of companies over unjustifiable water abstraction fees

The Manufacturers Association of Nigeria (MAN) has condemned the sealing of some companies by an agency of the Lagos State government over unjustifiable water abstraction fees. The condemnation was contained in an open letter to the state governor Babajide Sanwo-Olu, signed by Segun Ajayi-Kadir, MAN Director General.

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The open letter reads “The Manufacturers Association of Nigeria (MAN) is constrained to convey this open message to the Governor of Lagos State, as all attempts at approaching the relevant heads of agencies and ministry has failed. 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.”

Ajayi-Kadir added, “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. This was expected to culminate in an MoU to commence in January 2025.

“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 this discussions were going on and during the Yuletide that the Commission decided to cause this major and unwise shut down of the companies.”

MAN noted that “It is important to properly situate this inappropriate action within the context of the prevailing inclement operating environment in general and the downturn in the manufacturing sector in particular. A situation where industries are burdened with payments in excess of N100million for generating water for production purpose, in the face of government’s failure to supply same, is unfair.”

“The exorbitant fees and the untoward means of extracting payment exemplifies the negative impact of tyranny of regulation on private business. To date, manufacturers across the country are saddled with more that N1.2billion of unsold inventory, borrowing at more than 30% and struggling under a debilitating 250% 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. There are more! So to add this oppressive water abstraction fee in Lagos state that may potentially be adopted by other States, presents an ominous and rancorous future for manufacturers in particular and private businesses in general.”

MAN therefore implores the Governor of Lagos state to use his good office to order the immediate reopening of the closed factories. This will pave the way for a logical and passable conclusion of the ongoing conversations on how to permanently resolve the matter of outstanding fees, as well as conclude the impending MoU between the Water Commission and the Organised Private Sector. This is more so that the private sector is currently awaiting the finalization of the text of the MoU from LASWARCO.

MAN concluded that “We are full of expectations that immediate action is taken in the interest of the state’s economy and to forestall a possible degeneration in the already tense business atmosphere. The possible loss of jobs and its attendant socioeconomic implications, as well as the negative signal to the investing public should serve as deterrent and encourage a business friendly regulatory environment.”