Kenyan consumers reluctant in reporting illicit trade – survey

Tobacco and alcohol among leading products.

In Summary

•A third of consumers continue to buy counterfeit goods knowingly.

•Kenya losing more than Sh153 billion tax revenue annually to illicit trade.

Anti-counterfeit inspector Ibrahim Bulle displays fake cigarettes impounded at the Port of Mombasa/FILE
Anti-counterfeit inspector Ibrahim Bulle displays fake cigarettes impounded at the Port of Mombasa/FILE

Four out of 10 consumers in Kenya see no point in reporting illicit trade, a survey indicates, with a third of consumers continuing to buy counterfeit goods knowingly.

The country loses more than Sh153 billion tax revenue annually to illicit trade, according to the Anti-Counterfeits Authority(ACA), with tobacco and alcohol products among the most traded.

Half of those surveyed said they had seen illicit tobacco or alcohol on sale in the last two days, the survey by Stop Crime Kenya (StoCK) indicates.

StoCK is a platform campaigning against criminals who make a fortune smuggling and selling illicit goods. It has a secretariat at the Consumers Federation of Kenya (Cofek).

The survey was conducted by researchers from Cofek through telephone interviews with 100 consumers in 24 counties, each.

Majority of the surveyed noted that even though there are agencies to which one can report illicit trade, there are significant barriers preventing them from doing so, with one in four people saying they fear retaliation if they report illicit trade.

Other challenges include failure to understand reporting mechanisms and low follow up by authorities after cases are reported.

Kenya has one of the largest markets for fake goods and contraband in East Africa according to ACA, ranging from alcohol, electronics and pharmaceuticals to food, clothing and tobacco.

This costs the country loses in potential tax revenue, robbing citizens off employment opportunities and deprives the state off funds for vital service such as healthcare.

“A third of consumers buy counterfeit goods knowingly. We must change their mindset. Awareness of the negative impact of counterfeit good needs to be enhanced and we need a national action plan to combat illicit trade,” said John Akoten, deputy director at ACA

He called on consumers to shun illicit goods, “otherwise criminal cartels will continue to benefit.”

Illicit trade has been linked to funding terrorism and organised crime not only in Kenya but other regions in the world.

It’s not right that members of the community are comfortable in consuming illicit goods without having the necessary understanding that this negatively impacts them. It is a menace that is costing the country,” said Evans Oruta, ChairmanDepartment of Criminology and Social Work at Masinde Muliro University of Science and Technology.

Meanwhile, the DCI and Kenya Bureau of Statistics are seen as the most active in fighting illicit trade and counterfeits according to the survey released on Friday, where respondents were asked to rate the performances of five key state agencies.

They include KRA, Ethics and Anti-Corruption Commission (EACC), Directorate of Criminal Intelligence (DCI), Anti-Counterfeits Authority (ACA) and Kenya Bureau of Standards (Kebs).

Half of the surveyed said DCI and Kebs are “doing a good job.”

“However, taken as a whole, the five agencies got a negative rating. Their performance was considered Poor or Very Poor by almost half of those surveyed (44.8%) and average by one in four (23.4%). Less than one in three (31.8%) said their performance Good or Very Good,” the survey reads in part.

StoCK chairman Stephen Mutoro said: “Government must prioritise the fight against illicit trade. The agencies tasked with tackling this scourge must revitalise their efforts and win back the confidence of the public."

The perpetrators growing rich at the expense of the economy and the lives of innocent people must be brought to justice, he added.

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