Counterfeits: Are enforcers tackling the wrong cause?

Despite numerous efforts aimed towards combating trade in counterfeit products in Uganda, tangible results remain far-fetched mainly due to limited manpower of the regulator and ignorance of the consumers.

The other factor is that currently, the focus is channelled towards addressing the symptoms, with enforcers targeting traders selling counterfeits or substandard products, rather than tackling the root cause, which is why counterfeit products remain on the market.

Some of the products counterfeited include foodstuffs, iron sheets, cosmetics, building materials such as cement, toilet paper, polythene bags, electronics and alcohol, solar panels, drugs and chemicals.

According to the Uganda National Bureau of Standards (UNBS), about 54% of products on the market are either fake or counterfeits.

Statistics show that trade in counterfeit products is growing exponentially at more than 1100% every 10 years.

Whereas world trade accounts for about $30 trillion, trade in counterfeits accounts for about 15% of that, up from 1% in 2010.

According to the chairperson of the Anti-Counterfeit Network, Fred Muwema, trade in counterfeits continues to flourish in Uganda due to several communication gaps between the different market actors. He says the buying and selling of counterfeits is a mindset problem which requires a behavioural change campaign.

“We need a community ecosystem to counter this threat and this must involve all the market players. You need to have the consumers working together with the brands and the regulators for effective information sharing and enforcement.

The reason why some enforcement actions are resisted by the public, is because they (the public) do not understand the exercise or know the dangers of counterfeit. But if you get the public involved in reporting, then they cannot resist the enforcement action,” Muwema said.

He made the observation as the Anti-Counterfeit Network (ACN) unveiled Bleep App, a digital platform to bridge the intervention gaps between consumers, manufacturers and the regulators.

The app has been identified as a formidable platform that stakeholders will leverage in the fight against counterfeits, substandard and illicit trade.

It will also enable easy verification of reports by the brands and regulators, which in turn facilitates redress action. Currently, it is costly and time consuming for brands and regulators to investigate and enforce against counterfeits.

“ACN is offering a platform which will bring together key stakeholders who affect and are affected by counterfeits to combat this deadly epidemic in a cost-efficient manner.

We have partnered with Cypheme, a global leader in providing counterfeit detection solutions using AI and deep trace technology.

Uganda National Bureau of Standards officials loading substandard mattresses on trucks confiscated during one of the operations. The enforcement body has decried limited funding in carrying out their mandate.

“It facilitates the reporting of suspected counterfeits, the verification of these reports and the taking of remedial action, all in one place. It is not enough to get the reports; follow-up action must be done.

“The goal now is to increase the reported counterfeit cases from the low figures of just 1,000 cases in the country per year to at least 10,000 cases in the first year. With this kind of trajectory, we can then talk of reducing counterfeits and substandard products on the market by 50% in three years’ time,” Muwema said.

UNBS on enforcement

UNBS continues to decry the inadequate funding that hinders its operational activities and compromises its mandate.

While the bureau currently receives sh56b, it requires about sh200b to fulfil its mandate adequately. This, according to UNBS executive director James Kasigwa, limits the bureau’s ability to enforce.

“Insufficient resources affect the inspection of imported products, essential for consumer protection.

Additionally, limited funding slows market surveillance efforts, making it difficult to detect adulterated goods, expired products and spoiled items.

“We are responsible for activities such as developing standards, certifying products, testing and calibrating equipment. However, the bureau’s limited funding impedes its ability to execute these responsibilities effectively,” Kasigwa said.

He said despite UNBS contributing 23.7% to the GDP as of 2023, resource constraints often force supervisors to multi-task, such as directly testing products instead of overseeing processes, which creates a gap for the culprits.

Kasigwa said to mitigate the financing challenge, there is a need for the Government to review the UNBS funding model to allow the bureau to spend on ground rather than send the funds to the consolidated fund before allocating.

Manufacturers speak out

Speaking recently during the second pre-budget breakfast dialogue, Uganda Manufacturers Association chairperson Aga Sekalala Jr said sub-standard products and counterfeits continue to frustrate the output of his members, in turn affecting the contribution of the manufacturing sector to the GDP.

He said sub-standard and counterfeit products in particular stifle the growth of genuine businesses because of the unfair competition.

“Sub-standard and counterfeit products are usually cheaper and, therefore, can easily drive genuine business out of the market. To the consumers, counterfeits and substandard goods have big adverse welfare and health implications. Virtually all sectors have to deal with counterfeit and substandard products,” he said.

The Law The Government’s enactment of the Anti-Counterfeit Goods Bill signifies an important step towards safeguarding intellectual property, fostering fair competition, and ultimately, protecting Ugandan consumers.

However, stakeholders acknowledge that the true efficacy of the legislation rests on stakeholder collaboration.

In July 2023, Asuman Basaliwa, the Bugiri Municipality MP, succeeded in securing leave of Parliament to allow him to introduce the Anti-Counterfeit Bill, 2023.

The proposed law seeks to ban counterfeit goods that infringe on intellectual property rights, focusing on copyrights and trademarks.

It also introduces penalties for trading in counterfeit products and grants authority for confiscation to the Uganda Revenue Authority and inspectors from UNBS.

Law

In July 2023, Asuman Basaliwa, the Bugiri Municipality MP, succeeded in securing leave of Parliament to allow him to introduce the Anti-Counterfeit Bill, 2023.