The Anti-Counterfeit Authority of Kenya has released findings of the National Baseline Survey on the extent of counterfeit and other forms of illicit trade in the country.
According to the study conducted between October 2019 and February 2020, the Government revenue lost in 2018 stood at KES102.99-billion up from KES101.23-billion in 2017. Around $900-million each year.
From the 16 sectors of the economy that the study concentrated on, the most affected were building, mining and construction. These three sectors were specifically and heavily affected by counterfeiting with a share of 23.37% in value of total illicit trade, followed by energy, electrical and electronics with a share of 14.67% in 2018.
The sectors where most government revenues were lost are the food, beverage and non-alcoholic drinks sector with a share of 23.19%, followed by textile and apparel at 20.09%.
30% of the firms in the sectors were aware that their products were being counterfeited and sold in the black market, whereas 56.4% of the sampled firms were not aware that their products were being counterfeited and sold. Between 2016 and 2018, 7484 jobs were lost in Kenya due to illicit trade with counterfeiting accounting for 32.59% of the jobs lost.
The study also cites piracy as a critical form of illicit trade. According to the findings, the loss of sales as a result of pirated products stood at around $2 million (KES2.2 billion) over the period 2016-2018. Although the trend depicts marginal decline between 2017 and 2018, the loss as a result of total sales is quite high ranging between 37.69% and 42.14%, which is a clear indication of how piracy is wiping profitability of the affected firms and individuals.
“We conducted this study with a sole purpose of determining the extent and magnitude of illicit trade in the country and the findings are out. This provides baseline statistics upon which we will work very closely with our enforcement teams and other government agencies to nab culprits to reduce counterfeiting and other forms of illicit trade in Kenya. This goes a long way to demonstrate our resilience in the fight against counterfeiting,” notes Elema Halake, ED of the Anti-Counterfeit Authority.
He adds “As we celebrate the World Anti-Counterfeit Day today, we urge all Kenyans to beware of illicit goods when purchasing products in retail outlets. Additionally, we call upon the public and private sector especially the Kenya Association of Manufacturers to continue working closely with us as we battle this economic threat.”
Coinciding with the launch of the baseline survey report was the unveiling of the National Illicit Trade Observatory (NITO), a tool that will enable monitoring of illicit trade in Kenya.
The observatory tracks six types of illicit trade: counterfeit, piracy, substandard goods, uncustomed goods, restricted goods and unexercised goods.
“The observatory is designed to be a data management and reporting tool where enforcement agencies will report seized goods (both from domestic and import markets), while the private sector shall be able to anonymously report on counterfeited products affecting their market share as well as their impact,” says Ahmed Farah, TradeMark East Africa’s Kenya Country Programme Director.