Eastern Africa region loses $500 million to counterfeit goods

More than 30 per cent of medicines sold in Kenya are fake and could harm consumers, say the results of a study which seeks to underscore the negative effects of counterfeiting in east Africa.

“You can imagine the impact counterfeiting has on people’s lives. Fake medicines can cause health hazards” says Mr Omar Issa, the CEO of Investment Climate Facility (ICF) for Africa that conducted the research.

ICF works to identify the barriers that exist to doing business in Africa.

Health implications
According to Mr Omar, member states of the East African Community last year lost $500 million in taxes as a result of trade in counterfeits.

“Kenya’s Eveready east Africa lost 70 per cent of its market to counterfeits” said Mr Issa.

In December, local pharmaceutical giant GlaxoSmithKline discovered knock-offs of its best selling painkiller Panadol Extra in the market. Some of the fake tablets had already been sold to unsuspecting patients.

One raid in an estate in Nairobi, led to the netting and destroying of counterfeit Panadol Extra drugs worth Sh5million.

Local manufacturers have over the years experienced knock-offs of their top selling brands and experts are now warning that fake goods worth billions of shillings smuggled into the local market in the last 12 months could have devastating health implications on consumers besides reducing government revenue.

Manufacturers blame lax surveillance at various ports of entry including Mombasa sea port which have been used by smugglers as a conduit for distributing counterfeited products from Asian markets into the neighbouring landlocked states such as Uganda, Rwanda and the DR Congo.

The products pirates target the low end products which have a high circulation and sales volumes.

According to United Nations statistics, about 46 per cent of Kenya’s 33 million people live in poverty and this is the group targeted by the distributors of fake products who price them to fit into the pockets of the poor.

Counterfeited medicines and cigarettes are among some of the prized products that pass through Kenya into the regional markets with some spilling over to local consumers. But fake food and auto parts are also gaining market in Kenya.

Other goods that are commonly counterfeited include computer parts and software, designer suits, television and radio sets and even motor vehicle parts, shoe polish, medicines, dry cells, soaps and detergents, alcoholic beverages and bulbs.

Mr Issa says the East African Community is diverse and fighting counterfeits would be difficult because of the porous borders and different level of legislation and policy on fake goods.

“We believe that the solution to counterfeits lies in a common policy and legislation that will control trade in such goods in east Africa” said Mr Issa when he spoke at the second East African Conference on Investment in Nairobi.

The draft legislation that will be discussed by the East African Legislative Assembly has been produced.

Top priority
“Presidents of the EAC member states should accord the fight against counterfeit the first priority if we are to win the war against fake goods” said Mr Issa.

Local manufacturers say imitation of goods is rife despite the recent enactment of stiff anti counterfeiting laws in Kenya.