MAN Slams LASWARCO’s Sealing Of Factories Over Water Abstraction Fees, Laments Tyranny Of Regulation

The Manufacturers Association of Nigeria (MAN) has condemned the sealing of some factories in Lagos by the Lagos State Water Regulatory Commission (LASWARCO) over allegations of non-compliance with water abstraction regulations.

In an open message to Governor Babajide Sanwo-Olu on Friday, the Director General of MAN, Segun Ajayi-Kadir, said the association was constrained to seek the intervention of the governor because previous attempts at approaching the relevant heads of agencies and ministry on the matter have failed.

Recall that LASWARCO had sealed the facilities of three major companies – Nigerian Bottling Company (producers of Coca-Cola), FrieslandCampina (makers of Peak Milk), and Guinness Nigeria Plc – for extracting large quantities of groundwater without proper authorisation.

“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. This was expected to culminate in a memorandum of understanding (MoU) to commence in January 2025,” he stated.

Ajayi-Kadir emphasised that the action was inappropriate against the backdrop of the prevailing inclement operating environment in general and the downturn in the manufacturing sector in particular.

His words: “A situation where industries are burdened with payments in excess of N100 million for generating water for production purposes, in the face of the government’s failure to supply the 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 N1.2 billion 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.

“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, according to Ajayi-Kadir, 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 Commission and the Organised Private Sector.