The Manufacturers Association of Nigeria (MAN) has knocked the Lagos State government over closure of factories belonging to Coca-Cola Bottling Company, FrieslandCampina WAMCO and Guinness Nigeria.
The Lagos State Water Regulatory Commission (LASWARCO) last week sealed the factories for extracting groundwater for commercial purposes without proper authorisation.
The commission said it had been engaging with the three companies for over seven years, but they had either partially complied or failed to comply with regulations, prompting enforcement action.
In an open letter to Governor Babajide Sanwo-Olu, the Director-General (DG) of MAN, Segun Ajayi-Kadir described the act as unfortunate and ill-timed.
“The Manufacturers Association of Nigeria (MAN) is constrained to convey this open message to the Governor of Lagos State, as all attempts at approaching the relevant heads of agencies and ministry 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 had engaged in meaningful dialogue and reached some agreements over the lingering issue about three months ago. This was expected to culminate in a MoU to commence in January 2025,” he said.
Ajayi-Kadir highlighted the harsh economic climate, noting that industries are already burdened with significant challenges, including over N1.2 billion in unsold inventory, borrowing costs exceeding 30 percent, and a 250 per cent rise in power costs.
He said manufacturers face multiple taxes and fees, adding that the high cost of logistics and insecurity further disrupt production activities.
“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,” the DG said.
Ajayi-Kadir said the possible loss of jobs and its socioeconomic implications, as well as the negative signal it sends to investors, should serve as a cautionary factor and encourage a regulatory environment that supports businesses.
