Kampala- Regional manufacturers say they are on the verge of being kicked out of business if governments do not enact stringent laws against counterfeit goods.
Mr Hussein Kamote, the director of policy and advocacy at the Confederation of Tanzania Industries, said counterfeits have discouraged serious investment, tarnished brands of genuine industries and hampered efforts to upgrade the industry to capital intensive status.
“Genuine manufacturers are running out of business because they cannot compete with ‘black markets’ that sell products quarter the price of the original goods,” said Mr Kamote.
He made the remarks on Wednesday at the East African Manufacturers Business Summit in Kampala which brought together more than 500 delegates and investors from the region.
Mr Kamote highlighted corruption, ignorance of consumers to differentiate fake goods from genuine ones, lack of commitment from regional leaders as the main factors helping the illegal trade to flourish in the region.
Citing the 2010 statistics which indicated that EA lost more than $500m in tax revenue due to counterfeit and pirated products flooding the market, Dr John Akoten, the acting director of Anti-Counterfeit Agency (ACA), said it was time regional governments took action against the vice.
Dr Akoten who defined counterfeit as trade that infringes on the laws, embargos, taxation procedures and licensing, added that fake goods violate the intellectual property copyright.
“Illicit trade has increased poverty and defamed the market size of our region. It has also increased unemployment because proprietors cannot expand business yet the existing ones are crumbling,” he said.
He added that there was need to establish a system that would oversee the chain of production of goods and regular monitoring of all industries.
The delegates resolved, among others things, to formulate a local content policy to ensure preferential treatment is accorded to local goods as well as reducing costs of production.
The industrialists asked EA governments to sensitise traders and consumers on how to tell fake goods from genuine ones.
Counting the losses
Uganda- During an Agro dealer training session organised by IFDC/Crop life Uganda in March 2012, information from the ministry of Agriculture revealed that counterfeits in the agro chemical business accounted for 15 to 20 per cent market share translating into about $6m (Shs13b)
Kenya- In April this year, Dr Wilson Songa, the chief executive officer anti-counterfeit enforcement agencies, at a Nairobi hotel, said Kenya was losing up to Sh69 billion annually due to proliferation of contraband goods into the economy.
Tanzania- In November 2012, The Citizen newspaper reported that Tanzania was losing between 15 to 25 per cent of the total domestic revenue due to counterfeit products.
In financial year 2011/2012, the loss in government revenue due to counterfeit products stood well over Sh1 trillion.