Paul Ramara, a partner with Spoor & Fisher Law firm, says counterfeiting remains a significant challenge for multinational brands aiming to legitimately penetrate the African market, but expresses optimism that anti-counterfeit laws and measures are gaining traction in Africa.
He says African countries are particularly vulnerable to the sale of counterfeit goods because so much of the continent’s commercial activity takes place in unregulated markets. Further, borders between countries can be breached, which leads to smuggling.
According to Ramara, counterfeiting reduces tax revenue and inhibits economic growth by deterring foreign direct investment and to attract foreign direct investment he noted intellectual property (IP) protection is one of the first elements that needs to be ensured.
“Selling counterfeit goods takes away the market share that should rightfully belong to the original manufacturer. This is harmful to not only the company who owns the IP but also consumers who are duped into buying poor quality knock-offs. At times, it can be fatal,” Ramara stated.
In many African countries, inadequate human resources result in IP protection not being properly enforced, even if adequate laws are in place.
Although counterfeit products, such as poorly made shoes and cheap cellphones cause frustration in the market, the damage caused by counterfeit pharmaceuticals is most worrying of all, added Ramara. It is estimated that such pharmaceuticals account for between 30 percent and 60 percent of the African pharmaceuticals market.
The International Chamber of Commerce’s Business Action to Stop Counterfeiting and Piracy has described Nigeria as the “gateway to the rest of Africa for counterfeit products,” with “no IP protection, no proven protection by judicial precedents and slow court proceedings.”
But Ramara pointed out in swift reaction that, this finding might be unduly harsh, as Nigeria does have several laws that can be applied against counterfeits. However, they are not only disparate but also time-consuming and cumbersome to enforce.
Nigerian authorities have recently been showing an interest in brand identification training at the ports of entry. Spoor & Fisher has successfully conducted brand identification training with Nigerian customs officials on behalf of major multinational corporates.
Ramara advocated that a customs recordal system was essential to the successful repelling of counterfeit goods and the protection of IP.
“Ideally, more African countries should have a customs recordal system in place to ensure efficiency in fighting the scourge of counterfeiting,” he stated.
The World Health Organisation (WHO) has estimated that about 100,000 people die in Africa every year because of counterfeit pharmaceuticals.
However, counterfeiting also affects industrial markets, with counterfeit bearings, drives, pumps, machine parts and valves, besides others, being used in manufacturing and production.
This creates safety risks for those operating machinery or using vehicles fitted with counterfeit parts because they are not manufactured to the same quality standards as the original,” he said, “A number of African countries do not have sufficient intellectual property (IP) protection; however, progress is being made in Kenya, Ghana, Uganda and Tanzania, among others.”
Although most counterfeit goods in Africa come from the East, particularly China, some counterfeits come from other countries, with a small percentage even manufactured on African soil.