The Manufacturers Association of Nigeria (MAN) has written an open message to the Governor of Lagos State, Mr. Babajide Olusola Sanwo-Olu, saying that all attempts to approach the relevant heads of agencies and ministries have 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. This action is ill-timed and quite unfortunate, as the Commission and MAN 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 was while these discussions were going on and during the Yuletide that the Commission decided to cause this major and unwise shutdown of the companies.
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 N100 million for generating water for production purposes in the face of the government’s failure to supply it, is unfair.
The exorbitant fees and the untoward means of extracting payment exemplify the negative impact of regulation’s tyranny on private business. To date, manufacturers across the country are saddled with more than 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.
There are more! Adding this oppressive water abstraction fee in Lagos state, which 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. 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 a deterrent and encourage a business-friendly regulatory environment.
