Africa as a dumping ground for counterfeit goods

I made a reference to black market Kiwi shoe polish in a previous post.

The current issue of the BBC magazine Focus on Africa contains a cover story, Copycats Go for the Kill:

“…recent research by ICF (International Climate Facility) found that in the East African Community $500 million in revenues from unpaid taxes was lost to counterfeit goods…”

The article cites cases of counterfeit toothpaste bearing the Unilever brand and suggests that 30% of medicines on sale are fake.  And a 2009 UN report revealed that:

“Revenues gained from 45 million counterfeit anti-malarial medicines were worth $438 million, greater than the GDP of Guinea-Bissau.”

One of the objectives of the ICF is to “secure property rights” throughout Africa, and I suspect that the definition of this goal has now been broadened to include IP.

Addressing the observation that Africa has become a dumping ground for counterfeit goods will require a general crackdown on corruption, new legislation and the strengthening of IPRs.  So this is a problem that will not be resolved without political will.

Post written by Peter Bloch, consultant to CAS-IP

7 responses to “Africa as a dumping ground for counterfeit goods

  1. ..and it will also require “education” from within the country rather than being imported (or seen as imposed) from developed countries. I also think that the growth of national brands might develop a sense of pride which may reject counterfaits. In relation to medicines then counterfaits run along a thin line next to generic medicines and this is another problem which needs to be tackled very carefully.

  2. Who is this “international climate facility”? Why would an organisation with that name be spending time lobbying in the interests of brand name goods?
    Is the $500 million figure based on what would have been spent by people who do not have the money to spend on non-counterfeit goods?
    On what basis does the West think that the solution is to impose our notions of IPR on Africa?
    Why are shoe polish and medicines part of the same article?
    Bearing in mind the lobbying of medicines firms against free trade in patented medicines and against generics, how big is the risk that a crackdown to protect trademarks and patents will make access to effective medicines more difficult?

  3. In partial response to FB’s comment:
    Thanks for your feedback. ICF – the International Climate Facility – is a multi donor initiative to encourage and support African countries to develop business environments which will attract foreign investment and private sector growth. One of their priorities is to support legislation that will provide security to foreign investors with respect to property ownership. Thus I observed that, in light of the level of infringement, ICF would probably broaden the definition of “property” to include IP.

    Unlike knock-off handbags in the US (which sell for far less than the real thing!), counterfeit goods in Africa often sell for a price that is close to what they would pay for the legitimate product. But consumers are not getting the value. Shoe polish and medicines are, I agree, very different; I was simply pointing out that the problem is widespread.

    Your two other points (imposing our notions of IPR on Africa, and the risks of protecting drug IP) both raise interesting issues but are too big to get into here. We will try and address these in the future. But re the first of these two I would point to the huge losses that are being incurred by the Ghanaian music industry as a result of piracy, and the steps that are being taken (without any Western intervention) in providing a secure and enforceable IP environment.

  4. A “p.s.” to my last comment: I think that FB may have been misled by the word “climate”. In this context it refers to supporting a change in the business climate and has nothing to do with the weather!

  5. To FB:

    I suggest you visit Afro-IP (see blogroll on right column), and look for articles with a label that includes the word “counterfeit”. Please note that this may well be an IP blog, but it uses to refer to generalist newspapers; it refers to an issue that goes well beyond Intellectual property.

    The argument that the West would impose its notions of IPR on Africa is one that anti-IP activists use ad nauseam. The issue of counterfeits, however, is one of a fundamental nature for societies. If it is subject to a North-South divide, then it is because it is more pressing in the South, particularly in Africa, than in the North. It is about honest, transparent and fair trade. In some instances, it is a matter of life or death, particularly for the poorest who have no access to secure distribution channels.

    The protection of Intellectual Property rights in Africa – by the way, the rights not just of foreign owners, but also of local ones, including small entrepreneurs – is the flipside of consumer protection. And also the fight against organised crime.

    Why are shoe polish and medicines part of the same article? Because there is a continuum between the two.

    To Francesca:

    No, there is no thin line between counterfeits and generic medicines. Medicines are genuine and trustworthy (proprietary or generic), or they are not.

  6. Andre…thanks for your contribution to the discussion!

  7. Pingback: Text messaging will fight drug counterfeiting in Africa « the CAS-IP blog

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