- Total volume of illicit trade stood at Ksh 726 billion in 2017 and increased to Kes 826 billion in 2018 which represents 8.9% and 9.3% of Kenyan GDP respectively.
- Total government revenue loss from illicit trade in all sectors stood at Kes 101.23 billion in 2017, rising to Ksh 102.99 billion in 2018.
Kenya is losing billions of shillings in revenue according to the Anti-Counterfeit Authority’s findings of the National Baseline Survey on the extent of counterfeit and other forms of illicit trade in Kenya.
According to the study conducted between October 2019 and February 2020, the Government revenue lost in 2018 stood at Ksh 102.99 billion up from Ksh 101.23 billion in 2017.
From the 16 sectors of the economy that the study concentrated on, building, mining, and construction was heavily affected by counterfeiting with a share of 23.37 percent in value of total illicit trade, followed by energy, electrical and electronics with a share of 14.67 percent in 2018.
The sector with the most government revenue loss was food, beverage, and non-alcoholic drinks with a share of 23.19 percent, followed by textile and apparel at 20.09 percent.
Thirty (30) percent of the firms were aware that their products were being counterfeited and sold in the market, whereas 56.4 percent of the sampled firms were not aware that their products are being counterfeited and sold in the market. Between 2016 and 2018, 7,484 jobs were lost in Kenya due to illicit trade with counterfeiting accounting for 32.59 percent of the jobs lost.
Piracy as a critical form of illicit trade
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 Ksh 2.2 billion over the period 2016-2018.
Although the trend depicts marginal decline between 2017 and 2018, the loss as a result of total sales is quite high ranging between 37.69 percent and 42.14 percent, which is a clear indication of how piracy is wiping profitability of the affected firms and individuals.
“We have nabbed counterfeit goods over Ksh 2.8 Billion and surrendered them to law enforcement agencies for the prosecution of suspects. This goes a long way to demonstrate our resilience in the fight against counterfeiting,” noted Elema Halake, Executive Director, Anti-Counterfeit Authority.
The launch of the baseline survey report coincides with the unveiling of the National Illicit Trade Observatory (NITO), a tool that will enable the monitoring of illicit trade in Kenya.
Capitalising on its partnership with TMEA through funding from DFID, ACA has established the observatory to complement and enhance efforts of the Multi-Agency Team on Illicit Trade established by the President, to eliminate unfair trade competition in Kenya. The observatory tracks six types of illicit trade: counterfeit, piracy, substandard goods, uncustomed goods, restricted goods, and unexercised goods.
“The observatory is designed to be a data management and reporting tool where enforcement agencies will report seized goods (both from domestic and import markets), while the private sector shall be able to anonymously report on counterfeited products affecting their market share as well as their impact,” said Ahmed Farah, TMEA’s Kenya Country Programme Director.
The study was done in partnership with TradeMark East Africa (TMEA) through funding from the Department for International Development (DFID).