NECA warns factory closures in Lagos may deter investors
According to the Nigeria Employers' Consultative Association, the Lagos State Water Regulatory Commission's closure of factories owned by major manufacturing companies in Lagos due to alleged nonpayment of water abstraction levies may deter potential investors.NECA also expressed concern that the move would exacerbate employees' concerns about job security and portray the state as hostile to legitimate businesses.
Mr. Wale Oyerinde, Director-General of NECA, disclosed this in a statement issued on Wednesday.
Oyerinde urged LASWARCO to assist struggling businesses and end what he called an ongoing misinformation campaign and media barrage, which he referred to as "economic sabotage."
He added that the reported closure of businesses due to alleged noncompliance with water abstraction regulations was not only misleading, but also likely to send a negative message about Nigeria's already difficult business environment.
"The reported comments and activities of the commission have the damaging potential of scaring away investors, aggravating employees' apprehension about the security of their jobs, and portraying Lagos State as unwelcoming for legitimate businesses," Oyerinde told the newspaper.
He stated that these issues are arising at a time when many multinational corporations are either leaving the country or undergoing global restructuring, with Nigeria and Lagos being particularly hard hit by divestments and job losses.
"There is no denying that businesses have faced the most difficult economic situation in recent memory, with many declaring massive losses.
"It is, thus, expected that the commission will be innovative enough to come up with legitimate ways to generate revenue without adding to the woes of businesses by demanding unjustifiable multimillion amounts as water abstraction levies from businesses that already pay many other forms of taxes for the same activities, they use the water for," according to him.
The NECA DG stated that the government is responsible for providing water to its citizens and businesses.
However, Oyerinde added that if the government fails to fulfil its responsibility for whatever reason, "it will be highly insensitive, harsh, and punitive for the same government that has failed to adequately provide water to also impose punitive levies on businesses that are constrained to make investments in providing water to run their businesses."
Oyerinde expressed concern that the commission's actions are especially troubling given the ongoing discussions with a segment of the Organised Private Sector to resolve the issues peacefully.
He reiterated that, while some companies were forced to pay to avoid disruptions to their operations, NECA advises against the commission's unproductive tactics.
"It should be noted that organised businesses are not against responsible regulation, however, we will embark on all legal and legitimate means to resist any form of high-handedness that does not demonstrate empathy with the plight of struggling Nigerian businesses," commented Oyerinde.
He advised that in the pursuit of revenue generation, the commission and all other regulatory agencies should take a more legitimate and civil approach, as opposed to the disruptive tactics of recent years, which undermine the Federal Government's efforts to attract investment, promote job creation, and ensure responsible regulation.
He urged Lagos State Governor Babajide Sanwo-Olu to intervene in the matter and prevent further challenges for Lagos businesses.
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