The Manufacturers Association of Nigeria (MAN) has expressed strong disapproval of the Lagos State Government’s decision to seal several major manufacturing facilities, calling the move unwise, unwarranted, and ill-timed.
In a statement signed by its Director General, Segun Ajayi-Kadir, MAN condemned the actions of the Lagos State Water Regulatory Commission (LASWARCO), which shut down factories operated by Nigerian Bottling Company (producers of Coca-Cola), FrieslandCampina (makers of Peak Milk), and Guinness Nigeria Plc for alleged violations of water abstraction regulations.
According to LASWARCO’s Director of Technical Services, Olowu Babatunde, the companies were extracting significant amounts of groundwater without proper authorization. However, MAN’s DG argued that the shutdowns disregarded ongoing dialogue between the manufacturers and LASWARCO over the contentious water abstraction fees.
“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,” Ajayi-Kadir said.
Ajayi-Kadir highlighted the significant challenges faced by manufacturers, including rising costs, multiple taxation, and regulatory hurdles, emphasizing that the water abstraction fees were exorbitant and unjustifiable.
“A situation where industries are burdened with payments exceeding N100 million for self-generated water—due to the government’s inability to supply water—is grossly unfair,” he noted. “This oppressive regulation exemplifies the negative impact of overbearing governance on private businesses.”
He also cited broader industry struggles, including over N1.2 billion worth of unsold inventory, borrowing costs exceeding 30%, a 250% increase in power costs, and the burden of up to 120 taxes and levies imposed by various tiers of government.
MAN urged Governor Babajide Sanwo-Olu to intervene and direct LASWARCO to reopen the sealed facilities while discussions on the MoU and outstanding fees resume.
The Nigeria Employers’ Consultative Association (NECA) also criticized the closures, warning that they could deter investors from the state. NECA’s Director-General, Adewale-Smatt Oyerinde, described the levies as unreasonable, noting that manufacturers already pay multiple taxes for the same activities.
“The actions of LASWARCO risk setting a dangerous precedent, with other states potentially adopting similar measures, further compounding the challenges faced by manufacturers,” Oyerinde stated.
The Lagos State Environmental Management Protection Law of 2017 grants LASWARCO the authority to regulate groundwater abstraction and penalize non-compliance. However, MAN and NECA argue that a collaborative approach is needed to support the struggling manufacturing sector.
