MAN calls for reopening of Lagos factories sealed by LASWARCO
The Manufacturers Association of Nigeria has urged Lagos State Governor Babajide Sanwo-Olu to intervene and reopen factories that were closed by the Lagos State Water Regulatory Commission.These closures were allegedly due to nonpayment of water abstraction fees.
In a statement issued on Friday, MAN described the closures as "unwarranted and ill-timed," claiming that LASWARCO ignored ongoing discussions to resolve fee disputes.
MAN revealed that it used an open letter to Governor Babajide Sanwo-Olu after unsuccessful attempts to engage relevant agencies and ministries.
MAN criticised the decision to close factories during the Yuletide season, calling it "unwise" and damaging to both the manufacturing sector and the Lagos State economy. T
MAN Director-General Segun Ajayi-Kadir stated, "MAN is appalled by LASWARCO's inauspicious act of sealing factories over their alleged refusal to pay the Commission's astronomical and unjustifiable 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."
Ajayi-Kadir expressed disappointment that the factories were sealed despite ongoing discussions, describing the action as premature and counterproductive to resolving the dispute peacefully.
"Only three weeks ago, another round of discussions took place between LASWARCO and representatives of MAN, including affected member companies, which resulted in ongoing discussions among the companies about the best option for addressing the alleged outstanding payments from earlier contested fees."
"It is while these discussions were going on and during the Yuletide that the Commission decided to cause this major and unwise shutdown of the companies," according to him.
Furthermore, the association decried the exorbitant costs that manufacturers face in Lagos, citing water fees exceeding N100 million, borrowing rates of more than 30%, and a 250 percent increase in electricity costs.
Ajayi-Kaddir explained, "The exorbitant fees and unethical methods of collecting payment exemplify the negative impact of the tyranny of regulation on private business. To date, manufacturers across the country are saddled with more than N1.2 billion in unsold inventory, borrowing at more than 30%, and dealing with a crippling 250 percent increase in power costs.
"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."
MAN cautioned that factory closures could result in significant job losses and exacerbate an already difficult business environment.
The association argued that such regulatory actions discourage investors and stifle private sector growth, advocating for a more collaborative and business-friendly approach to dispute resolution.
Ajayi-Kadir urged Sanwo-Olu to intervene and reopen the affected factories to facilitate a resolution of the issue, saying, "This will pave the way for a logical and passable conclusion to the ongoing conversations."
He also stated that the private sector is awaiting the finalisation of the MoU text from LASWARCO.
Ajayi-Kadir emphasised the broader impact of the dispute, stating that "the potential loss of jobs and its attendant socioeconomic implications…should serve as a deterrent and encourage a business-friendly regulatory environment."
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