Awareness will boost fight against illicit trade
By Phyllis Wakiaga
The challenge of global illicit trade networks is that they have an ever growing sophistication and a tenacity that many legal structures can only envy. The networks infiltrate many economies through various loopholes. In our case, those loopholes have led to burgeoning cartels in different parts of the country, having an unfair advantage in the market.
The unintended consequence of free movement of goods and services is that it has made it possible for illicit trade to thrive, especially in places where regulatory framework is not strong enough. Despite the time and resources that businesses and governments put into protecting local industries, the counterfeit market continues to boom. According to the World Economic Forum, illicit trade takes away about $2.2 trillion from the global economy, which is nearly three per cent of the world’s economy.
Closer home, illicit trade is a huge impediment towards realising our economic goals as a country.
First, it puts the lives of citizens at great risk as counterfeit and sub-standard goods infiltrate the market. According to the World Health Organisation, fake antimalarial medicines alone cause more than 100,000 deaths yearly in sub-Saharan Africa.
Secondly, the vice eats into the market of legit products and, in turn, manufacturers either cut down production or close down shop as they cannot compete. This leads to job losses and a shrinking manufacturing sector due to unfair trade practices. Third, government losses huge portions of national revenues as counterfeit products evade tax. The loss of revenue dilutes the government’s ability to provide social protection for its citizens.
To win the fight against illicit trade, we must continue to promote partnerships among stakeholders and create awareness on the vice. In line with this, the government launched the National Action Plan for Combating Illicit Trade in June. The strategy seeks to ensure agencies tasked with combating the trade have the required capacity and they leverage their synergies with other partners to realise meaningful impact.
The government’s efforts to combat the vice have continued to bear fruit. The Anti-Counterfeit Authority (ACA) seized counterfeit goods worth Sh590 million between July and December 2018 compared to Sh149 million in the 2010/2011 fiscal year. Following the establishment of the multi - agency enforcement team against illicit trade, ACA seized goods worth Sh13.5 Billion between May and September, last year. This demonstrates the importance of collaborative efforts between industry and government agencies in this fight.
One sure way to sustain this is to urgently criminalise the vice in order to send a strong message to the criminal networks. A special court to fast-track the rulings touching on these crimes should be established, and an immediate review towards stiffer sentences and penalties.
Inadequate awareness and reluctance to purchase original goods—which are normally expensive in comparison to counterfeits—have also been attributed to a thriving illicit trade. Creating awareness to the public on the effects of illicit trade will lower demand for the counterfeits once they understand the dangers of these products.
Industry has continued to create awareness on the vice. Kenya Association of Manufacturers partnered with the Judiciary in 2015 to develop the Enforcement Manual to Combat Illicit Trade, which comprises of all available laws meant to combat illicit trade, and conduct awareness forums for all enforcement officers across the justice chain. Such initiatives will ensure that we raise awareness on illicit trade at the national and county levels.
—The writer is the CEO of Kenya Association of Manufacturers. [email protected]