Kenyan manufacturers have turned to the Common Market for Eastern and Southern Africa (Comesa), for support in battling illicit trade in the region, as tonnes of counterfeit products flood its market, endangering lives and threatening to cripple local industries.
At a Comesa Heads of Customs meeting in Nairobi this past week, the Kenya Association of Manufacturers asked the body to consider establishing an institution to deal with counterfeits and dumping in the regional market.
Citing the establishment of the Comesa Competition Commission which investigates anti-competitive practices, KAM said a similar body tasked with dealing with counterfeits and dumping is needed.
“About 40 per cent of manufactured goods in the market in Kenya are counterfeit," said the head of policy. research and advocacy at KAM, Job Wanjohi.
In recent months Kenya has been undertaking an inter-agency fight against counterfeits, substandard goods and other forms of illicit trade that cost the country an estimated $2 million every year.
However, investigations by Daily Nation last week revealed that counterfeit goods are still pouring into the country, with 135 20-foot containers of substandard rice having been allowed in, in the first week of this month.
According to the East African Business Council, illicit trade is the leading cause of revenue loss for both the private sector and governments in East Africa.
Despite the gains made in recent years including adoption of the East African Community Anti-Counterfeit Bill, 2013; operationalisation of the Kenya Anti-Counterfeit Agency; formulation of the Anti-Counterfeiting Goods Bill, 2015 in Uganda; and formulation of the Competition and Consumer Protection Bill in Rwanda, East African countries still lose billions of dollars to counterfeits.
Country-based estimates show Uganda and Tanzania lose about $1.4 billion and $1.5 billion respectively in annual revenues to illicit trade. Kenya loses $350 million annually.
In Uganda, a countrywide baseline survey conducted by the standards agency in February revealed that 54 per cent of products on the market are either fake or counterfeit.
The Uganda National Bureau of Statistics says the volumes of counterfeit products have however declined by about 80 per cent in five years due to vigilance.
In Tanzania, a 2016 study commissioned by the Confederation of Tanzania Industries found that at least 50 per cent of goods used in the country including drugs, foods and construction materials were fake.
Globally, the Organisation for Economic Co-operation and Development report for 2016 estimates that counterfeits and fake products business transacted nearly $0.5 trillion in monetary value, representing 2.5 per cent of global trade.