Tanzania is to conduct a nationwide study on the magnitude and effects of counterfeits later this year as it plans a major crackdown on fake goods and services whose influx has hurt local manufacturers.

The study seeks to determine the cost of counterfeit imported, domestically produced and digitally retrieved products to manufacturers, tax loss to government, health hazards suffered as well as lost foreign direct investment.

According to the Fair Competition Commission (FCC), the study will be conducted in various regions of the country after recommended policy options and strategies have been received from a yet to be identified consultant.

The Confederation of Tanzania Industries has said that counterfeits cost the government losses of between 15-25 per cent of total domestic revenue annually, and between Tsh540 and Tsh900 billion ($343 million and $566 million) annually in tax evasion related to counterfeits and substandard goods.

Counterfeits in Tanzania mainly originate from China, India, United Arab Emirates, Indonesia, Taiwan and Thailand.

According to recent studies, China tops the list of countries which export counterfeits to Tanzania, followed by India, UAE (Dubai), Indonesia, Taiwan and Thailand.

(Read: China in drive to halt counterfeit goods in EAC)

The director of FCC, Dr Godfrey Mariki, has said that the Commission has been working with other government departments such as the police, the Tanzania Revenue Authority (TRA) and the Tanzania Bureau of Standards (TBS) in the fight against counterfeits.

Dr Marki said that the government’s objective is to create a business environment conducive for both the business community and consumers by making sure that consumers get products worth their money and brand owners get returns worth their investments.

Concerted effort

In a report by the Organisation for Economic Co-operation and Development (OECD) in 2008, it is estimated that the cost to companies from counterfeiting is as high as $630 billion annually, while counterfeit and substandard products cost the East African region over $500 million in lost tax revenue annually.

According to the executive director of Tanzania Consumer Society, Bernard Kihiyo, it would take concerted efforts by all East African Community member states to stem the flow of counterfeits into the region and political will from all the governments to destroy syndicates behind the importation, distribution and sale of the sub-standard goods.

He said counterfeiting and piracy has increased substantially over the past two decades in which pirated products can be found in almost every corner of the country.

In recent years, East Africa’s business environment has been inundated with an avalanche of counterfeit and pirated products, making the region extremely unattractive to investors yet each country has anti-counterfeit laws. Tanzania Mainland has a full-fledged government department solely charged with the responsibility of combating counterfeit and pirated products.

Kenya has Kenya Anti-Counterfeit Agency that does similar job as that Tanzanian one. Uganda’s is preparing  a law — anti-Counterfeiting Goods Bill 2010.

(Read: Kibaki urges region to crack whip on counterfeits)