ELDORET, Kenya, Sep 13 – Efforts by mobile phone solutions company Nokia to fight counterfeits through collaboration with state agencies have started bearing fruit, offering hope for increased tax revenues and job opportunities lost through importation of fake goods through the country’s points of entry.
General Manager for East and Southern Africa Kenneth Oyolla said they recently conducted a swoop at the Moi International Airport, Eldoret and seized thousands of fake Nokia handsets and accessories.
“Following our complaint with the Kenya Bureau of Standards’ Weights and Measures Department, a raid was conducted at the airport warehouse where the suspected products were stored before distribution; 17,783 counterfeit Nokia handsets and accessories were seized,” he said.
A Somali businessman was arrested in connection with the seizures and fined Sh1.5 million by an Eldoret court which also ordered the destruction of the goods.
While welcoming the raid as an encouraging step by the authorities, Mr Oyolla said Nokia would continue with its collaborative efforts through training of Kenya Revenue Authority and the Kenya Bureau of Standards officials to distinguish the fake from genuine Nokia products.
The company is also organizing training for immigration officers at border entry points to stem the entry of fake handsets, he added.
The recently-enacted anti-counterfeit Law, he added was a shot in the arm for the economy and a major win for legal businesses such as Nokia that have invested heavily to offer customers genuine products. The anti-counterfeit law spells out harsh penalties including a fine Sh500,000 or five years imprisonment for those found guilty.
According to the Kenya Association of Manufacturers (KAM), the Kenyan economy loses about Sh50 billion annually to counterfeiters and the extent of the problem exacerbated last year, when the figure went up to Sh70.2 billion. Directly, KAM estimates that the government loses Sh19 billion annually.
“Counterfeiting is an illegal activity that affects many successful consumer product companies on a global basis in a wide range of industries and the national economies in which they do business. This illegal practice has a debilitating, draining effect on the Kenyan economy through lost revenues, fewer jobs in legitimate local businesses and law enforcement costs among other things,” said Mr Oyolla.
The malpractice is also threatening regional economic benefits of the East African community with KAM’s Standards and Regulatory Committee estimating that counterfeit and substandard products cost the East African region over Sh40 billion ($500 million) in lost government tax revenue annually.
He said Nokia would continue to undertake consumer awareness especially on how to identify genuine Nokia products right from the packaging, features, pricing and warranty period as well as risks of using counterfeited products.
“As a global company, Nokia partners with and takes a leadership position in a wide network of organizations to advocate for legislation, regulations, procedures and other enforcement policies to protect the broader industry, including Coalition of Intellectual Property Rights (CIPR), International Anti-Counterfeiting Coalition (IACC), Quality Brands Protection Committee (QBPC) among others,” said Mr Oyolla.
However, the GM feared that significant gains could be eroded by the influx of counterfeits despite the removal of 16 per cent Value Added tax (VAT) on mobile phones in the last year’s pre-budget.
“Our advice is that customers should buy Nokia products from authorized distributors and retailers and ensure they get their 12-month warranty for Kenya, Uganda and Tanzania. And if a product is purchased from a location other than an authorized dealer then exercise extreme caution especially when the price is substantially less than being stated by Nokia authorized dealers,” advised Mr Oyolla.