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The Complexity of Counterfeiting and Piracy in Africa

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Africa has become a major destination for counterfeits and pirated goods. It is given that a pirated DVD of Sex and the City 2, for example,will hit the shelves for less than a dollar before the movie opens in African theatres. Besides this timely delivery, the advent of Internet downloads means that African consumers no longer strain to watch a poorly done ‘camera copy' of their favourite movie or series.


Software piracy is also especially rampant in Africa; the software piracy rate in 2007 was an average of 80 percent, according to reports Other products often counterfeited and pirated include currencies, apparel, consumer electronics, automotive parts, pharmaceuticals, food and drink and chemicals. The latter three items potentially endanger human health and safety and regrettably, these are Africa's primary consumables.

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Basically, counterfeiting and piracy is the theft of ideas and brands, not dissimilar from maritime piracy, which is robbing ships at sea. Counterfeiting and piracy crime refers to a range of illegal activities (manufacturing, altering or distribution) that involve the unauthorised use or reproduction of a recognised intellectual property right (IPR) such as a trademark, patent, design or copyright without the owner's permission. Counterfeited and pirated goods are on the rise globally.


According to the OECD (Organisation for Economic Cooperation and Development), counterfeited and pirated goods accounted for 1.95 percent of the world trade in 2007 worth USD 250 billion. This figure excludes counterfeited and pirated goods produced and consumed domestically, and non-tangible pirated digital products distributed via the Internet. The largest supplier of these goods is Asia with China, Korea and Taiwan leading the pack. Emulating their brethren at sea, African pirates on shore have upped the ante in the past decade. Africa has not only become a major consumer of cheap counterfeits and pirated goods, but is also being used as a transit route to European and American markets according to the World Customs Organisation.

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Previous regulatory responses to the crime had been limited partly due to the perception that it was a victimless crime. Today the rapid growth of piracy has triggered a flurry of initiatives and legislation to improve the weak legal and regulatory framework and strengthen enforcement of existing laws. However, the surge of anti-counterfeiting and anti-piracy legislation in the continent is proving to be problematic rather than the envisaged silver bullet.


Consumer and public health advocates stress that the problem lies in the fact that the laws are industry-driven with a view to protecting IPRs without adequately taking into account other concerns such as public health, educational needs and technology transfer. Recently, a Kenyan court granted an injunction suspending the coming into force of certain provisions of the Kenya Anti-Counterfeiting Act in relation to the importation of generic drugs and medication. The court stated that their enforcement would jeopardise access to affordable essential medicines for Kenyan consumers. The East African Community Anti-Counterfeiting Bill, which had been touted as a model for the rest of Africa, is yet to be passed owing to similar concerns.


Despite the establishment of new laws, the interplay of other factors exist to frustrate governments' efforts to combat the crime. Economic integration, improved transport systems, an upsurge in Internet and mobile use, large informal economy, high import tariffs, and the minimal risk relative to other organised criminal activities, are contributing to the growth of the counterfeiting and piracy industry. In fact, several organised crime groups have shifted their operations from trafficking of drugs and arms to counterfeiting medicines, which guarantees high profits with minimal risk and cost, according to a 2009 report by the United Nations Office on Drugs and Crime. Africa's endemic corruption provides another intractable lubricant for the crime. Corrupt government officials in West Africa, together with organised crime groups and formal manufacturers' employees were identified by the report as the major actors in counterfeiting medicines.


Though the economic impact of counterfeits and pirated goods may have been exaggerated in some quarters, the danger they pose and the reported fatalities from their consumption are real. The World Health Organisation (WHO) estimates that more than a quarter of the medicines in Africa are counterfeited. Their use leads to failure to provide treatment and in some cases, the emergence of drug resistance strains of the disease. When the drugs are adulterated with toxic chemicals, this results in serious injury or death. Sadly, 45 million counterfeit anti-malarial courses valued at USD438 million were sold in West Africa in 2008. Also, several incidents of counterfeited food products with fatalities have been widely reported in the media recently.


Counterfeited and pirated products that cause no personal harm nonetheless severely damage companies' profitability, innovation and brand value, and for the government, lost tax revenues. It has been estimated that the Ghanaian music industry could generate USD53 million a year from foreign sales if the domestic IPR regime supported creativity. Naturally, the crime also increases the enforcement burden.


In a recent article in the Nigerian Punch, the Nigerian National Agency for Food and Drugs Administration and Control (NAFDAC) Director General, Dr. Paul Orhii described the crime as "an act of economic sabotage and terrorism against public health which should not be condoned." Hence systemic challenges aside, the major test for African countries is how to identify the crucial and appropriate shortcomings in order to effectively address counterfeiting and piracy. Is the escalation of the crime an issue of legal lacuna or is indicative of a failed enforcement strategy? Are there are other (dis)incentives at play?


The proliferation of counterfeits and pirated goods pose widely differing threats. This should assist governments to prioritise and determine the most suitable response. There is also a pressing need for a sober debate on the effect of the crime on African consumers. Without a doubt, life should trump profits at all times, thus any strategy to combat counterfeiting and piracy should not be done at the expense of African consumers' basic needs. Further, fighting the crime should be done alongside other policies. African governments themselves give counterfeits a drive when they impose substantial taxes on essential life saving medicines for instance. Therefore, it is vital to counter the spread of counterfeits and pirated goods with the right tools to avoid losing the current momentum.


Written by: Deborah Akoth, Researcher with Environmental Security Programme, ISS Nairobi

 

 

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