Securing Markets Against Illicit Trade

From 2013 enterprise survey conducted by the World Bank, one out of four private sector firms in Kenya consider informal competition as the biggest obstacle. The percentage of firms choosing access to finance and crime as most important obstacle for their day to day operations declined significantly from 2007 to 2013.

The same holds for tax rates and transportation related obstacles. The practice of competitors in the informal sector is most often chosen as the top obstacle in 2013, a figure that almost twice as high as in 2007.

East Africa loses between US $500-600 billion per year on trade in counterfeit goods. In 2012, the Kenya Association of Manufactures (KAM),carried out a study on the impact of the counterfeit  threats and established that Kenya manufacturer firms were losing up to 40% of their market share to counterfeit products.

The value of illicit trade and primarily the sale of counterfeit goods are estimated at US $650 Billion worldwide.

According to KAM there should be a review of the anti-counterfeit Act 2008 to create a more responsive Agency with adequate resources and mandate.

There should also be an implementation of enforcement manual against illicit trade. The anti-counterfeit Act, 2008 invokes appointment of inspectors across a number of agencies for the purposes of combating the menace from various fronts. This is yet to be implemented.

The government should create consumer awareness on counterfeit goods in partnership with manufacturer and capitalize on the use of ICT for consumers to assist in detection of counterfeit goods in the market. For instance, use of markers and tracking devices and holograms.

The Kenyan governments is expected to provide efficient monitoring system and penalties for culprits in case of counterfeits, which requires a close collaboration between Kenya Bureau of Standards, Customs, Anti-Counterfeit agency and business community.