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`Illegal entry points source of fake goods flooding`

15th December 2012
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Dr Abdallah Kigoda

Proliferation of illegal entry points along the coastline has been cited as a major factor for the flooding of counterfeit products in the local market.

Minister for Trade and Industries Dr Abdallah Kigoda said yesterday that it had come to the ministry’s attention that there exists a substantial number of illegal operating landing points along the Bagamoyo-Dar es Salaam shoreline through which fake industrial products find their way into the market.

According to the minister, authorities have established up to 35 illegal entry points along the coastline.

“Illegal entry points disturb the government because they affect the economy and threaten the health of our people,” he stated.

“We need to be serious with this because it has a lot of negative impact to the society. For a start we will cooperate with the police force in ending the problem,” he said.

The police will take control of illegal entry points because they are readily recognizable, he said, listing some of the counterfeit products in the market as body oils, milk for children, water, electricity cables, as well as vehicle parts and motorcycle tyres.

He said that the victims of these products are low income earners because of its low price compared to the original goods.

In solving the problem, the ministry was joining efforts with the Tanzania Bureau of Standards (TBS), the Tanzania Revenue Authority (TRA), the Fair Competition Commission (FCC) and the Tanzania Ports Authority (TPA) for inspecting imported products.

The ministry has also told the Confederation of Tanzania Industries (CTI) to cooperate in fighting the problem as they are among the victims.

Dr Kigoda warned businessman involved in counterfeit goods to immediately stop the business by taking out all fake products in their shops.

An operation for taking out fake goods from the market will start soon, he said, noting that it will involve the police force and other institutions.

The ministry also plans to provide civic education to various groups in society to raise awareness on fake products.

Education will focus on how customers can identify fake products, he said, urging different stakeholders to cooperate with the government in ending the problem. They should for instance report to authorities the existence of fake goods whenever found.

He said about 20 percent of goods in circulation in the local market are counterfeit products.

The data shows counterfeit and substandard industrial products continued to flood the domestic market in 2008, causing a revenue collection to sink, he asserted.

“In fact, that year saw illegally manufactured, fake and substandard products increase from about 35 to 40 per cent of all goods in the local market,” he further stated.

A report prepared by the Confederation of Tanzania Industries (CTI) says that Tanzania, like other countries around the world, suffers enormously from adverse effects of the flooding of counterfeit and substandard products.

Invariably, the impact of counterfeit and substandard goods hurts the economy, occasioning dwindling government revenues.

The government, for example, loses between 540 and 900 billion shillings per year due to tax evasion related to counterfeit and substandard goods, CTI says.

In the year 2008 the government may have lost an estimated four trillion shillings due to the prevalence of counterfeit goods in the domestic market, he said.

Fake industrial equipment and raw materials generated a loss of 1,000bn/-; vehicle spare parts (800bn/-); agriculture inputs (600bn/-) and chemicals (400bn/-).

More revenue was also lost due to the presence of fake pharmaceuticals (400bn/-); building materials (320bn/-); textiles and clothes (240bn/-); food and beverages (200bn/-) alcohol and drinking water (200bn/-). This brought the total loss to 3,160bn/-, but this not the whole story, CTI says.

Fake goods also compound health problems (fake medical drugs and foods); hurts businesses and consumers and complicates project implementation for government departments. “The presence of fake medical drugs and foods is an annoyance to the entire society as it touches nearly everyone” the CTI report intoned.

SOURCE: THE GUARDIAN