Govt destroys Kshs 10m worth of illicit goods in Mombasa

Written By: Claire Wanja
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Illicit Trade costs the economy at least KES 200 Billion (or 10% of National Budget of Ksh 2.55 trillion) annually in lost tax revenues, according to the Kenya Association of Manufacturers (KAM).
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The Anti-Counterfeit Agency under the auspices of the Multi-Agency Anti-Illicit Trade Outreach (MAAITO) Friday destroyed illicit goods worth over Kshs. 10 Million at the Bamburi Cement Factory Incinerator in Mombasa.

The illicit goods, including condemned rice and assorted counterfeit shoes, stationeries, beauty products and tonners were seized between 2017 and 2018.

Speaking during the exercise, Cabinet Secretary, Ministry of Trade, Industry and Cooperatives, Hon Peter Munya lauded the joint outreach efforts of MAAITO, in scaling up the war on illicit trade since inception in May 2018, citing the crucial role it plays in supporting attainment of the Big Four Agenda. Since inception in May 2018, over Kshs 8 billion worth of illicit goods were seized through the multi-agency efforts.

“Left unchecked, illicit trade especially trade in counterfeit goods will be the biggest impediments to achieving our economic goals as a country, which are anchored on the Big Four, in the short term and Vision 2030 in the long term”, commented Hon. Munya.

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He added that the government is supporting the anti-illicit war to create a win-win outcome for both businesses and consumers, reiterating that illicit trade affects the government through lost tax revenues, disadvantages local manufacturers, repels foreign investors and poses health, safety & environmental risks.

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“As a Ministry, we are committed to facilitating and not frustrating businesses and investors. We also care for the consumers by protecting them from the harmful effects of purchasing and using illicit goods, which are often of inferior quality and standards”, concluded Hon. Munya.

The Permanent Secretary, State Department of Trade, Dr. Chris Kiptoo PS said that unfair trade practices negatively impact on the country’s economy, Ease of Doing Business and the local manufacturing industry. These loses have also touched the public sector as illicit trade has enabled the evasion of payment of huge amounts of taxes with each passing financial year.

‘’By destroying these products, it is my hope that we are sending the right message to our investors. Kenya is your destination of choice for investment. We also want to send a strong warning to the economic saboteurs that we will not condone trade in illegal goods in this country,’’ noted Dr. Chris Kiptoo, the PS Trade during the event.

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The illicit goods include 1216 bags of substandard rice valued at KES 5.472 million, and other assorted counterfeit goods (Cosmetics, Shoes, Stationery, Toners etc) valued at KES 4.178 million.

The Multi-Agency body is finalizing a National Strategic Framework that will provide a clear roadmap for the collaborative efforts in combating illicit goods in partnership with the private sector, added Dr. Kiptoo, which will also empower MAAITO to scale-up the war against illicit trade.

The Weights & Measures Department Director, Mr. Michael Onyancha underscored adverse effects of illicit trade, of up to 10 per cent of our annual national budget according to KAM, saying that unscrupulous traders not only fleeced the government of potential tax revenue but also denied consumers value for their money.

According to a 2017 Anti-Counterfeit Authority 2017 Consumer Survey, Mobile Phones, Electronics, Pharmaceuticals & Cosmetics, Alcoholic beverages & cigarettes and Stationeries are the most counterfeited goods. The Kenya Association of Manufacturers also reports that counterfeits account for 40% of the goods available in the country.

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Mr. Elema Halake, the ACA Executive Director noted the environmental and economic costs associated with destroying illicit goods, which cost between Ksh 80-100 per kilo. “In addition to environmental degradation, destruction of illicit goods is an unnecessary burden to the Authority, government and taxpayer. As an Authority, we continue to spearhead efforts to make Kenya a Counterfeit-free country, hence Catalyzing The ‘Big Four’ Agenda by Combating Illicit Trade.

According to a 2017 ACA Consumer Survey, Mobile Phones, Electronics, Pharmaceuticals & Cosmetics, Alcoholic beverages, cigarettes and stationery are the most counterfeited goods.

The destruction of goods in Mombasa is a part of the ongoing efforts by ACA and MAAITO members to curb illicit trade.

Mr. Halake added that the Authority is in the process of setting up full-time operations at satellite offices at Jomo Kenyatta International Airport (JKIA) and Inland Container Depot (ICD) Nairobi which have been opened up. “Our presence shall be felt at all ports of entry, including air, sea and land”, He said.

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