Kenya loses Sh103b to counterfeit trade

Thursday, June 11th, 2020 00:00 |
Police officers guard seized counterfeit goods at the Eldoret Central Police Station. Photo/PD/File

Noel Wandera @NoelWandera5

A national baseline survey on counterfeits conducted on 16 sectors of the economy has shown that the government lost Sh102.9 billion in revenue to counterfeited and other forms of illicit trade in 2018, up from Sh101.2 billion in 2017.

According to the survey, conducted between October last year and February this year, building, mining and construction sectors were the most affected, with a share of 23.37 per cent in value of total illicit trade, followed by energy, electrical and electronics at 14.67 per cent in 2018.

The sector with the most government revenue loss was food, beverage and non-alcoholic drinks with a share of 23.19 per cent, followed by textile and apparel at 20.09 per cent.

According to the survey, 30 per cent of the firms were aware their products were being counterfeited and sold in the market, while 56.4 per cent did not know.

Job losses

Between 2016 and 2018, a 7,484 jobs were lost in Kenya due to illicit trade with counterfeiting accounting for 32.59 per cent 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 Sh2.2 billion between 2016 and 2018.

Although the trend depicts marginal decline between 2017 and 2018, the loss as a result of total sales is high, ranging between 37.69 per cent and 42.14 per cent, a clear indication of how piracy is wiping profitability of the affected firms and individuals.

“We conducted this study to determine the extent and magnitude of illicit trade.

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,” said Anti-counterfeit Authority executive director Elema Halake.

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