The fight against Illicit Trade is bearing fruit and should be sustained

By Job Wanjohi

When the Government reignited its fight against illicit trade earlier this year, the immediate impact of the raids and arrests carried out reverberated throughout the entire industry. The extent to which these illicit trade networks had infiltrated the market was unearthed, followed by a good amount of public awareness on the dangers posed by counterfeit goods as well as the efforts by the government to ensure the safety and security of all citizens.

A few weeks into the activities, the industry started reporting tangible gains made from this initiative. Sectors such as Edible Oils, Electrical and Electronics, as well as Food and Beverage, have indicated increased market share as a result of the fight against illicit trade, so much so that the sector is now looking to increase their capacity to cater for the growing demand.

The link between illicit trade and the economic performance of a country is undeniable. In June this year, The Economist Intelligence Unit published The Global Illicit Trade Environment Index to measure the ways in which nations are addressing their illicit trade challenges and the extent to which they have prevented the illegal networks from taking root in their economies. The index categorized the performances in four pillars namely, Government Policy, Supply and Demand, Transparency and Trade, and Customs Environment. Although Kenya was not among the 84 countries that informed the survey, the countries that emerged top ten were strong on all the above. Finland for example, which was number one with 85.6 out of 100, was very strong on Government Policy. This means that the country has very effective government policies and structures set up to track and prevent illicit trade. Is it any wonder that Finland finds its competitive edge in manufacturing, which then makes it one of the world’s top economies with a high GDP per capita?

The index attributed the low scores of countries such as Libya, Morocco and Iran to weak law enforcement, corruption that aids the permeation of illicit trade networks through the borders, and lack of automation of critical processes such as customs. There are also other factors such as weak Intellectual Property (IP) protection that discourages investment and hampers innovation in these economies.

These are the critical aspects that we need to be keen on as a country if the war on counterfeits and illicit trade is to be sustained. When we speak of corruption, we should not just view it as actions of individuals or as a point of contact at the borders, for example, we should expand our view to include negligence, lack of enforcement and inspection, or even something as simple as overlooking an overloaded cargo truck. It is a combination of actions that make it possible for counterfeit goods, for instance, to seep into the market.  Hence this would be the topmost hindrance to the sustainability of this fight. If we can tackle corruption then instituting measures to ensure that illicit trade can be prevented will not be a difficult task.

We also need to ensure that once the perpetrators of these crimes are apprehended, the scope of their punishment should bring into perspective their role in economic sabotage and above all, in endangering the lives and safety of citizens. Therefore they should be prosecuted to the fullest extent of the law, which will also send a message to all who are involved.

We are on the right track on this issue as a country; we only need to ensure that we don’t lose momentum to the detriment of our economy.

The writer is the Head of Policy, Research and Advocacy at Kenya Association of Manufacturers and can be reached on info@kam.co.ke.