The Manufacturers Association of Nigeria (MAN) has expressed strong disapproval over the recent sealing of major manufacturing facilities in Lagos State by the Lagos State Water Regulatory Commission (LASWARCO). The affected companies include Nigerian Bottling Company (producers of Coca-Cola), FrieslandCampina (makers of Peak Milk), and Guinness Nigeria Plc.
In a statement signed by its Director General, Segun Ajayi-Kadir, MAN described the government’s actions as “unwise, unwarranted, and ill-timed.” The association noted that the shutdown occurred despite ongoing discussions aimed at resolving disputes regarding water abstraction fees imposed by the commission.
Background of the Shutdown
LASWARCO’s enforcement was based on claims that the companies were extracting large quantities of groundwater without proper authorization. According to LASWARCO’s Director of Technical Services, Olowu Babatunde, the companies failed to comply with regulations after years of engagement.
MAN’s Response
Ajayi-Kadir criticized the sealing of the factories as an act of bad faith, particularly during the festive season and amidst ongoing negotiations.
“This action is ill-timed and unfortunate, especially as discussions had progressed toward a Memorandum of Understanding (MoU) set to commence in January 2025,” Ajayi-Kadir said.
He accused the Lagos State government of imposing exorbitant fees on manufacturers despite its failure to provide water for industrial use, forcing manufacturers to generate their own water at great cost.
Economic Concerns
MAN highlighted the broader challenges facing the manufacturing sector, including unsold inventory worth over ₦1.2 billion, borrowing costs exceeding 30%, and a 250% increase in power expenses.
Ajayi-Kadir warned that the imposition of these water abstraction fees, coupled with the high number of taxes and levies manufacturers already face, could set a dangerous precedent for other states, further destabilizing the sector.
Call for Resolution
Ajayi-Kadir appealed to Governor Babajide Sanwo-Olu to intervene and direct LASWARCO to reopen the sealed facilities.
“This will allow for the resumption of discussions aimed at reaching a logical and sustainable resolution of the matter, including the finalization of the proposed MoU,” he stated.
What You Should Know
The Lagos State Environmental Management Protection Law of 2017 empowers LASWARCO to regulate groundwater abstraction and penalize violators. However, industry stakeholders, including the Nigeria Employers’ Consultative Association (NECA), have criticized the enforcement, warning it could deter investors.
NECA’s Director General, Adewale-Smatt Oyerinde, described the levies as unreasonable, noting that manufacturers already pay multiple taxes on their activities.
