Business Backlash: NECA Condemns Lagos Water Levies as ‘Economic Sabotage’
The Nigeria Employers’ Consultative Association (NECA) has criticised the Lagos State Water Regulatory Commission (LASWARCO) for its recent closure of factories belonging to major manufacturers over allegations of non-payment of water abstraction levies. The group warned that such actions could deter investors and exacerbate job insecurity in Nigeria’s commercial hub.
In a statement on Wednesday, NECA’s Director-General, Mr. Wale Oyerinde, decried LASWARCO’s approach as damaging to the business climate, describing it as “economic sabotage.” He urged the commission to support struggling businesses rather than resort to punitive measures and a media campaign that could undermine economic stability.
“The reported sealing of business premises over alleged non-compliance with water abstraction regulations is not only misleading but sends the wrong message about an already harsh business environment,” Oyerinde said.
Mounting Concerns Over Investor Confidence
Oyerinde highlighted the broader implications of LASWARCO’s actions, noting that Nigeria—particularly Lagos—has been severely affected by divestments and job losses as multinational companies restructure or exit the market entirely.
“It is no gainsaying that businesses have faced probably the harshest economic situation in recent times, with many declaring significant losses,” he said.
He criticised the levies as unjustifiable, particularly for businesses already burdened with multiple taxes. “It is highly insensitive and punitive for the government to impose levies on businesses forced to invest in their own water supply due to the state’s failure to provide this essential service,” he argued.
A Call for Responsible Regulation
While affirming the private sector’s support for responsible regulation, Oyerinde warned against high-handed enforcement tactics. He emphasised that NECA would explore legal avenues to resist measures that worsen the plight of businesses.
“We counsel against the unhelpful tactics being deployed by the commission. Organised businesses are not against regulation, but enforcement must demonstrate empathy with the challenges of Nigerian enterprises,” he added.
He appealed to Lagos State Governor Babajide Sanwo-Olu to intervene, urging regulatory agencies to adopt more collaborative and civil approaches to revenue generation.
The Regulatory Clash
The Lagos State Water Regulatory Commission recently sealed factories operated by major companies, including the Nigerian Bottling Company (Coca-Cola), FrieslandCampina (makers of Peak Milk), and Guinness Nigeria Plc, for allegedly extracting large quantities of groundwater without proper authorisation.
According to LASWARCO’s Director of Technical Services, Mr. Olowu Babatunde, the commission has engaged with these companies for over seven years to encourage compliance but claimed efforts had been met with limited success.
NECA, however, argued that some businesses had been compelled to pay the levies to avoid operational disruptions. “The current approach undermines the Federal Government’s efforts to attract investment, promote job creation, and facilitate responsible regulation,” Oyerinde said.
The Bigger Picture
The incident comes as Nigeria grapples with an increasingly challenging business environment, marked by economic instability and regulatory hurdles. As Lagos remains a focal point for industrial activity, the actions of LASWARCO could have far-reaching consequences for investor confidence and employment stability in the state.
Oyerinde concluded by urging the state government to foster a business-friendly climate, warning that continued punitive measures could further erode Nigeria’s economic competitiveness.
