Anti-Counterfeit Authority (ACA) Executive Director Dr Robi Mbugua spoke to Financial Standard about the state of counterfeit trade in the country.
What is the state of counterfeit trade in the country?
Counterfeiting continues to be a big challenge in the economy regarding the goods being brought into the country. It is important to note that 80 per cent of the counterfeited goods that we continue to nab in the market come from outside the country.
Counterfeiting also poses a great threat to consumers regarding their safety and health. When you look at the agricultural sector, we have counterfeit farm inputs like seeds, fertiliser and pesticides. We also have counterfeit medicine and cosmetics. So counterfeit goods impact all sectors, which is something that should be looked into very carefully.
How big is the impact of the counterfeit trade, and how is Kenya losing to counterfeiters?
Counterfeits have a direct impact on the economic well-being of the country. For the government to exist, it has to tax businesses and residents. Currently, from the last study conducted in 2020, the country was losing Sh826 billion annually to illicit trade out of which 10 per cent constituted counterfeiting.
If we are to explore that number today, we will be talking about Sh900 billion to Sh1 trillion. So Counterfeit trade is still growing. The government is losing this money because most of the illicit activities are done outside the formal tax systems. At the end of the day, what the government would have earned goes to illegal traders.
With all the laws and penalties in place, why is it still easy for illegal trade to take place?
Just like any other form of crime, the State may not be able to eliminate the vice completely. What we can do is mitigate it. The prevalence of illicit trade persists because it is fueled by factors such as affordability; most counterfeited goods are cheap. Other issues are differentiation, where many people can’t tell the difference between counterfeit and genuine products.
There is also the issue of convenience because counterfeit goods can be accessed at any time. There is also a lack of enforcement by the Intellectual Property Rights (IPR) owners, some of whom shy away because they don’t want to get negative publicity about their products that are being counterfeited. There is also the issue of normalcy, where it becomes like a norm.
But why is it difficult for the authority to combat this?
It is difficult because these people are becoming like “Eneke the bird” (as referenced by famed Nigerian novelist Chinua Achebe about human beings’ capacity to adapt to situations). Arising from that, and because this is a criminal enterprise, they are always devising means and ways of being ahead of law enforcement. But we have not stopped; we have devised ways of detecting them. The war is being won.
What exactly is the authority doing about this?
We are doing recordation of intellectual property rights where the organisation is using a digital platform and software to manage whatever is being imported into the country so that we are able to contain counterfeiting at the source so as not to allow those goods into the country and then we end up using a lot of money chasing loose cargo.
Assuming they come through the port, it becomes challenging for us to identify and deal with those goods once they get into the country. We also want to go big on the creation of awareness about the negative impact of consuming counterfeited goods besides urging manufacturers to come out and defend their goods.
Where do most Counterfeit goods come from, and what are some of these products?
Most of these counterfeited goods come from Asian countries because factors of production in those countries are cheap, hence it’s cheaper to produce there. One of the most counterfeited products are electronics, apparel, cosmetics, footwear and alcoholic beverages, which is a huge menace. Counterfeiting of alcohol is rampant within the country.
What will it take for the authority to win the war against illicit trade?
This menace cannot be dealt with by the Anti-Counterfeit Authority alone. We require other State agencies like the police, provincial administration, the immigration department and the private sector, specifically the Kenya Association of Manufacturers, the chamber of commerce and the county governments.
This is a progressive war. The government wants to tackle this issue through a multi-agency approach. We have a committee comprised of the Kenya Revenue Authority, Kenya Ports Authority, Kenya Bureau of Standards, and the Coast Guard, among others.
Why is it important for the public to partner with the private sector in this fight?
The public is the consumer of these products and should not shy away from reporting the moment they realise they are fake. It is also important for the private sector to come out and defend their Intellectual Property Rights.
What are some of the challenges the authority faces in the fight against illicit trade?
There is a misconception that the organisation is anti-business, and this is a big challenge. There is also a negative perception from counterfeiters themselves because they want to continue benefiting. We also have the challenge of funding as we don’t have sufficient funds to cover the entire country. There is also the issue of people posing as our inspectors. They go out and extort people in our name.
What new measures are you putting in place to address these challenges?
We want to enhance collaborative efforts within the region. We are talking with our sister agencies in Uganda, Tanzania and Ethiopia to ensure we have a properly coordinated mechanism that will ensure we don’t allow illicit goods across our borders.
How did Covid-19 pandemic affect illicit trade?
Many people went online, meaning a lot of things came into the country through virtual platforms, and that triggered the formation of the Anti-Counterfeit Online Unit. The unit was to intercept, identify counterfeit goods and make necessary amends.
You’ve sat on different boards. From your experience, what skill do you bring to this job then?
I bring leadership, and managerial skills, and the fact that I am a trained lawyer and an expert in intellectual property, I am able to put whatever I did in theory to good use.