The Nigeria Employers’ Consultative Association (NECA) has sounded an alarm over the recent actions of the Lagos State Water Regulatory Commission (LASWARCO), warning that sealing major factories in the state could deter investors and worsen the already challenging business climate in Nigeria.
In a statement issued on Thursday, NECA’s Director-General, Mr. Adewale-Smatt Oyerinde, expressed deep concern over LASWARCO’s decision to seal the facilities of Nigerian Bottling Company (producers of Coca-Cola), FrieslandCampina (makers of Peak Milk), and Guinness Nigeria Plc. The commission accused the companies of extracting large quantities of groundwater without proper authorization.
Oyerinde stated, “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 highlighted that the current economic challenges facing Nigerian businesses are unprecedented, with many organizations grappling with significant losses. In such a harsh climate, punitive actions like factory closures could send the wrong message to both local and foreign investors.
“At a time when many multinationals are either exiting the country or carrying out global restructuring—with Nigeria and Lagos especially being among the hardest-hit nations and states in divestments and job losses—such actions are worrisome,” he said.
He emphasised that businesses are already overburdened by multiple taxes and levies, and adding exorbitant water abstraction fees to the mix only compounds their struggles.
The director-general strongly criticized the imposition of what he described as unreasonable and unjustifiable levies on businesses for water usage. He argued that it is the government’s fundamental responsibility to provide adequate water supply for its citizens and businesses.
“May we reiterate that it is the responsibility of the government to provide water for its citizens and businesses,” Oyerinde said. “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 operations.”
He pointed out the irony in businesses being penalized for investing in water supply infrastructure, which should ideally be the government’s duty.
While NECA supports the need for responsible regulation, Oyerinde cautioned against what he termed “high-handed” and disruptive practices by regulatory agencies. He called for a more empathetic and innovative approach to revenue generation, one that aligns with the realities of struggling businesses in the country.
“In the quest for revenue generation, the commission and indeed all other regulatory agencies should adopt a more legitimate and civil approach, rather than the predominant disruptive pattern of recent times,” he stated.
NECA also assured businesses that it would not stand idly by and would explore all legal and legitimate means to resist any form of overreach or excessive regulation.
“Organized businesses are not against regulation, but such regulations must be fair, consistent, and empathetic to the realities of the business environment,” Oyerinde concluded.
Oyerinde’s remarks serve as a broader cautionary note to Lagos State, urging policymakers to consider the implications of their actions on the state’s attractiveness to investors. As Nigeria’s economic hub, Lagos has a critical role in ensuring that businesses thrive, especially in a time when economic recovery is desperately needed.
The sealing of these factories, Oyerinde argued, does more harm than good and risks tarnishing the state’s reputation as a viable destination for investment.