MAN demands reopening of sealed Lagos factories

The Manufacturers Association of Nigeria has called on Lagos State Governor Babajide Sanwo-Olu to reopen factories sealed by the Lagos State Water Regulatory Commission over alleged non-payment of water abstraction fees.

In a statement on Friday, MAN described the closures as “unwarranted and ill-timed,” accusing LASWARCO of disregarding ongoing discussions aimed at resolving the disputed fees.

According to the association, it resorted to writing an open letter to Sanwo-Olu, “As all attempts at approaching the relevant heads of agencies and ministry have failed.”

MAN lamented the decision to seal the factories during the Yuletide season, calling it “unwise” and detrimental to the state’s economy and the manufacturing sector.

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 revealed that MAN had engaged in negotiations with LASWARCO, which led to agreements that were supposed to culminate in a Memorandum of Understanding 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 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 closures could lead to job losses and further strain an already volatile business environment.

It argued that such regulatory actions send negative signals to investors and undermine private sector growth.

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.”