The Kenyan government loses over KShs200 million (USD2 million) annually as potential income due to Illicit trade.
All Kenyan major border towns, according to Kenya Anti-Counterfeit Agency (ACA), are hot spots for counterfeit goods.
The most notorious ones are those mainly along Kenya-Tanzania and the Uganda border.
Fighting counterfeits in Kenya
To improve the fight against counterfeits, the country has launched the National Action Plan to reduce illicit trade in Kenya. This is by entrenching a well-coordinated approach by government agencies and partners.
Dubbed the National Action Plan for Combating Illicit Trade, the strategy seeks to ensure agencies tasked with combating illicit trade have the required capacity. The agencies are also expected to leverage their synergies with other partners and collaborators to realize the meaningful impact in the war against illicit trade.
Illicit Trade has been one of the leading causes of revenue loss for both the private sector and governments.
“It is imperative that these agencies are well coordinated through sealing the administrative and governance loopholes exploited by perpetrators of illicit trade. This action plan is geared to overcoming these challenges,” said Dr Chris Kiptoo – PS State Department of Trade.
It is estimated that the East African region loses upwards of USD500 million in government tax revenue annually.
The World Economic Forum’s Global Agenda Council on Illicit Trade recently estimated the shadow economy to be worth USD650 billion.
However, the latest figures on counterfeiting alone predict an increase to USD1.77 trillion.
To develop a clearer understanding of illicit trade, up-to-date data and more cross-border information sharing is needed. The contexts which enable it should also be known to help combat the illegal trade more effectively.
“We have trained and sensitized 116 officers in the criminal justice system including judges, Magistrates and Prosecutors from the Office of the Directorate of Public Prosecutions. We have trained over 1600 officers drawn from our enforcing Agencies like the Kenya Police, KEBS, KRA, KEPHIS in all major towns and entry points on issues of intellectual property protection,” said the Chairperson of Kenya Association of Manufacturers and ACA Board Chairperson, Flora Mutahi.
ACA Executive Director Elema Halake said, “All the identified loopholes, within and beyond our borders that have caused proliferation of illicit products into our market must be sealed. The National Action Plan takes cognizance and emphasizes the inclusion of multiple institutions in the fight against counterfeits. No agency can do it alone. A coordinated approach that leverages our synergies is key to achieving the greatest impact.”
The remarks were made during the marking of the World Anti Counterfeit Day at the EPZA grounds in Athi River.
Transnational organised crime
Counterfeit goods worth over KShs27 million were destroyed with the launch of the Kuwa Sure Public Awareness Campaign.
Parliamentary Trade Committee Chair Kanini Kega stressed that the government would no longer lose revenue or watch the lives of Kenyans put at risk as a result of counterfeit products.
“The war against Illicit trade must be at the level of any transnational organized crime like money-laundering, terrorism, corruption, arms and human trafficking as they are unavoidably associated. There is evidence to this,” said Kega.
He added that they are keen to see the manufacturing sector expand and grow.
“If we continue tolerating counterfeit products, this dream will remain just but a dream,” he added.
Since its formation, the Multi-Agency Anti-Illicit Trade Outreach (MAAITO) team has seized over Sh8.5 billion worth of illicit goods.
Of these, illicit goods worth Sh1.5 billion have been destroyed so far.
To ensure continuity, the Action Plan proposes a multi-agency framework domiciled at the Executive Office of the President.
This will provide policy guidance, monitor the implementation of various programmes, and report progress to the Presidency.
The Action Plan considers countering illicit trade as a strategic priority in realizing Vision 2030.
The most counterfeited goods in Kenya
Fast-Moving Consumer Goods (FMCG) are the most counterfeited products.
A government study has revealed mobile phones are the most counterfeited at a rate of 51.8 per cent.
This is followed by alcohol and beverages (30.8 per cent). DVDs/CDs, bottled drinking water and pharmaceuticals add up to make the top five most counterfeited products.
Other products are detergents, food products, electrical gadgets, perfumes and cosmetics, cigarettes and computers (both software and hardware).
To curb counterfeiting of its alcoholic drinks, Africa Spirits Limited (ASL), invested KShs200 million in non-refillable closures for some of its brands.
The company which introduced the technology on its products in 2015 says it is investing the money in redesigning Legend Brandy’s caps with the latest technology as part of its continuous innovation strategy.
Globally, alcoholic spirit manufacturers are increasingly adopting the use of non-refillable closures with distinct identification features as part of quality control.
“Illicit alcohol has been our biggest concern in the alcoholic beverage industry. We now look forward to full implementation of these new amendments accompanied by a strong set of regulations to reinforce the changes,’’ Gordon Mutugi, Chair of the Alcoholic Beverage Association of Kenya (ABAK) noted on the amendments.
70 per cent of Kenyans has purchased counterfeit products with 81 per cent buying these goods unknowingly.
In the study, 19 per cent of Kenyans has, however, knowingly paid for these goods.