The Manufacturers Association of Nigeria (MAN) has called on Lagos State Governor, Babajide Sanwo-Olu, to intervene in the recent sealing of factories by the Lagos State Water Regulatory Commission (LASWARCO) due to manufacturers’ alleged non-payment of water abstraction fees imposed by the Commission.
In an open letter to Governor Sanwo-Olu, MAN urged the Governor to use his office to immediately order the reopening of the affected factories to prevent potential job losses. The letter highlighted that efforts to engage the relevant agency heads had been unsuccessful.
The letter, signed by MAN’s Director General, Segun Ajayi-Kadir, reads: “The Manufacturers Association of Nigeria (MAN) is compelled to address the Governor of Lagos State through this open letter, as all attempts to reach the heads of relevant agencies and ministries have been futile.
“MAN is deeply concerned about the actions taken by the Lagos State Water Regulatory Commission (LASWARCO), which has sealed factories over their alleged refusal to pay exorbitant and unjustifiable water abstraction fees. This action is poorly timed and regrettable, especially considering that LASWARCO and MAN had been engaged in constructive discussions for the past three months, with an understanding that these talks would culminate in an MoU to be signed in January 2025. Just three weeks ago, additional talks were held between LASWARCO and MAN, including representatives of affected companies, to explore possible solutions to the disputed outstanding payments. It is particularly troubling that, despite these ongoing discussions, the Commission chose to implement this drastic action during the holiday season.
“The timing of this action is inappropriate, given the current challenges faced by manufacturers. With the sector already grappling with a difficult operating environment, imposing such heavy fees on industries that are already struggling with the lack of adequate water supply from the government is unfair and counterproductive.”
MAN further expressed concerns about the broader impact of these fees, noting that manufacturers are already burdened with over N1.2 billion in unsold inventory, high borrowing costs above 30%, and a 250% increase in power costs. The association also criticized the rising number of taxes and fees imposed on manufacturers, which disrupt production activities and contribute to the ongoing challenges in the sector.
“The addition of this water abstraction fee on top of existing taxes and levies is yet another obstacle for manufacturers in Lagos, and other states may follow suit if not addressed urgently. With multiple taxes—ranging from 60 to 120 levies from all tiers of government and other actors—manufacturers are already facing a crippling financial burden. The situation is compounded by insecurity and escalating logistics costs. Adding further oppressive fees, such as the water abstraction levy, threatens to exacerbate the difficulties faced by businesses and could have a long-lasting negative impact on the manufacturing sector.”
MAN called on the Governor to act decisively and ensure the immediate reopening of the sealed factories, which would allow for the conclusion of ongoing negotiations to address the disputed fees and finalize the MoU between LASWARCO and the Organized Private Sector.
“We are hopeful that the Governor will take swift action to resolve this issue, as the private sector eagerly awaits the finalization of the MoU with LASWARCO. The potential loss of jobs and the negative economic implications are significant concerns, and we urge the Governor to act in the best interests of Lagos’ economy and the broader business community,” the letter concluded.
MAN emphasized that a business-friendly regulatory environment is essential for fostering growth, attracting investment, and ensuring the sustainability of the manufacturing sector.
