Amid reports of increasing illegal trade in the East African Community (EAC), the region’s private sector authorities are in the process of setting a roadmap that will facilitate combating the vice.
Through their umbrella organization, the East African Business Council (EABC), authorities are now organizing a meeting in October in the Kenyan capital of Nairobi to come up with a plan of action needed to combat the vice.
The multi-faceted problem includes acts of; selling counterfeits, smuggling and under declared locally produced goods among others.
According to a press release from the EABC, the meeting will come up with policy reforms and recommendations to address the current weak or non-existent legislations to deal with illicit trade.
“The profitability and market share of EAC companies, especially those involved in manufacture of fast moving consumer goods have been negatively affected by counterfeits and pirated products,” said Agatha Nderitu, the Executive Director of the Council.
The Illicit trade EABC says undermines existence of a stable and open marketplace which is fundamental to improving competitiveness and increasing investment
“This makes the region extremely unattractive to investors and producers of genuine products.” Nderitu observed.
In a report published in 2008 by the Organization for Economic Co-operation and Development (OECD), it is estimated that EAC governments lose over $500 million in tax revenue annually due to the influx of counterfeit and pirated products.
“Economically, not only does
it eat into the profits of legitimate operators, it also destroys jobs by undermining investment in product development,” a Concept Paper about the meeting reads in part.
According to EABC, cheap and sub-standard products supplied through foreign and local traders and manufacturers are illegally replicating well –known brand names and designs on their packages and labels.
“Imitation products are common in a variety of product areas including dry cell batteries, alcoholic beverages and fruit juices, shoe polish, toothpastes/toothbrushes, soaps and detergents,”
The list also includes ball point pens, books, electrical and electronic items, perfumes, clothing, footwear, cosmetics, pharmaceuticals, automotive spare parts, computer software and hardware.
“There is need for a strong coherent regional framework to address all forms of illicit trade be addressed given the widening integration process that has resulted in freer circulation of products within the region,” Nderitu said.
While EAC Partner States have made some progress in seeking ways to address the illegal trade, EABC says that regional initiatives are still lacking.