Manufacturers Association Criticizes Lagos Over Factory Closures

• The Manufacturers Association of Nigeria criticized the Lagos State Government for shutting down Coca-Cola, FrieslandCampina, and Guinness factories over groundwater extraction
• MAN’s Director-General described the closures as ill-timed, emphasizing ongoing discussions and the negative impact on manufacturers in Lagos State

The Manufacturers Association of Nigeria (MAN) has criticized the Lagos State Government for shutting down factories belonging to Coca-Cola Bottling Company, FrieslandCampina WAMCO, and Guinness Nigeria.

The closures were carried out by the Lagos State Water Regulatory Commission (LASWARCO) over allegations that the companies extracted groundwater for commercial purposes without proper authorization.

LASWARCO claimed it had engaged with the companies for over seven years, but compliance with the regulations remained partial or absent, prompting the enforcement action.

In an open letter to Governor Babajide Sanwo-Olu, MAN’s Director-General, Segun Ajayi-Kadir, described the move as “ill-timed and unfortunate.”

“Despite several attempts to address this issue through the appropriate agencies, we are compelled to express our concern publicly,” Ajayi-Kadir stated.

He criticized LASWARCO for imposing “astronomical and unjustifiable” water abstraction fees, noting that recent dialogue between MAN and the commission had reached agreements expected to lead to a Memorandum of Understanding in January 2025.

“This action disregards our prior engagements and undermines our progress in resolving the matter amicably,” Ajayi-Kadir said.

He emphasized the broader challenges manufacturers face, including over N1.2 billion in unsold inventory, borrowing costs exceeding 30%, a 250% increase in power costs, and rising logistics expenses.

These difficulties, coupled with multiple taxes and growing insecurity, have already put significant pressure on the manufacturing sector.

“The decision to seal these factories must be reconsidered in light of the already harsh operating environment and the downturn in the manufacturing sector,” Ajayi-Kadir urged.

He warned of the potential job losses and socioeconomic consequences of such actions, stressing that they send negative signals to investors. Instead, he called for a regulatory approach that supports business growth and fosters economic development.