The Nigeria Employers’ Consultative Association (NECA) has accused the Lagos State Water Regulatory Commission (LASWARCO) of launching a “destructive” campaign against businesses in the state. The powerful business group, which represents employers across Nigeria, is now calling on Governor Babajide Sanwo-Olu to intervene immediately, warning that it will seek legal recourse if the situation is not addressed promptly.
In a strongly worded statement, NECA described LASWARCO’s actions as tantamount to economic sabotage, alleging that the Commission is shutting down businesses over unpaid water abstraction levies and exacerbating the already dire economic climate faced by companies in Lagos.
“These are challenging times for businesses across Nigeria, and particularly in Lagos, where many multinationals are pulling out or restructuring operations,” said Adewale-Smatt Oyerinde, NECA’s Director-General. “The last thing we need is another regulatory body making matters worse by targeting companies with unjustifiable demands, especially when businesses are already shouldering heavy taxes and struggling to stay afloat.”
A Worsening Business Climate
According to NECA, businesses in Lagos are grappling with the worst economic conditions in recent memory. Many companies have been hit with significant financial losses due to rising operational costs, supply chain disruptions, and the ripple effects of global inflation. The private sector’s challenges are compounded by the ongoing energy crises, skyrocketing costs of raw materials, and a general lack of support from government agencies.
However, NECA claims that LASWARCO’s imposition of hefty water abstraction levies on businesses is proving to be an additional burden. The Commission’s focus on collecting what it describes as “unpaid” levies is being seen by business leaders as a short-sighted move that ignores the broader economic context.
“The Government is meant to provide adequate water to support businesses, not impose punitive charges on those forced to self-supply,” Oyerinde remarked. “Businesses are already investing heavily in sourcing and managing their water needs due to the government’s inability to provide consistent, reliable supply.”
Lack of Consultation and Communication
NECA has also criticized the way LASWARCO has been engaging with businesses. Rather than offering solutions or incentives for businesses to comply with the water levies, the Commission has opted for a more confrontational approach, including shutting down factories. This, NECA argues, is a knee-jerk reaction that fails to recognize the broader issues impacting the business community.
“We are not against responsible regulation. What we are seeing here, however, is a regulatory body that is determined to enforce heavy-handed measures without considering the difficult circumstances businesses are operating under,” said Oyerinde. “Some companies have already been forced to pay these levies, not because they agree with them, but to avoid the interruption of their operations. But this is not a sustainable solution.”
A Time for Innovation, Not Destruction
NECA’s statement comes at a time when Lagos is facing significant challenges in its efforts to attract foreign direct investment (FDI) and create jobs. Recent reports indicate that several multinational companies have downsized or closed their operations in Nigeria, citing harsh operating conditions and inadequate infrastructure, including water supply.
Business owners say that the government’s failure to address water shortages, combined with rising levies and taxes, is discouraging investment and driving jobs out of the state. “Lagos is meant to be the economic engine of Nigeria, yet we are seeing a steady decline in private sector confidence,” a senior NECA official, who asked to remain anonymous, commented. “Instead of supporting business growth, LASWARCO and other regulatory bodies are implementing policies that will only further stifle Lagos’ economy.”
NECA has urged the Lagos State Government to engage in dialogue with the private sector to create a more business-friendly environment. According to the group, LASWARCO should explore innovative solutions for revenue generation, rather than resorting to heavy-handed measures that could ultimately drive businesses out of the state.
The Legal Battle Looms
As NECA prepares to escalate its protest, the Association is already considering legal action to challenge LASWARCO’s decisions. According to Oyerinde, the group is exploring all avenues to ensure that businesses are not unfairly targeted by arbitrary fines and closures.
“We are willing to go to court if necessary. Businesses in Lagos cannot afford to be undermined by regulatory overreach,” he stated. “We call on the Lagos State Government to step in and halt the destructive actions of LASWARCO before it causes more harm to the business community.”
