The business community has called for closer collaboration with regulatory authorities to fight the counterfeit menace to save businesses, consumers and the economy.
Mr Hazem Chalabi, the acting General Manager of Silver Star Auto Ltd, distributors of Mercedes Benz vehicles and spare parts, called for a standing task force made up of the government, the private sector, consumers and civil society to conduct regular checks in the market to stem the influx of counterfeit products.
“A lot of cars that visit our workshop suffer the effects of counterfeit parts. The consumer would have already paid the first time for the fake product. He buys the original part this time and pays again. We can see the effects on our roads, the high number of accidents,” Mr Chalabi told the GRAPHIC BUSINESS after a Breakfast Meeting on April 2 on the Real Cost of Fake and Inferior Products on Industry.”
Mr Chalabi expressed worry that the perpetrators openly operated in the market. “But nothing is being done to stop it and this is what the private sector and people who have investments in the country are concerned about.”
The Ghanaian-German Economic Association (GGEA) organised the forum as part of its thought leadership programmes to stimulate discussions around issues that affect their members and the private sector in general.
The car dealership firm was also saddened that consumers only looked at price and not the relationship between quality and price; but often bought the counterfeit products which tended to be more costly sooner or later.
Statistics
Besides the auto parts sub-sector, electrical products and appliances, information technology (IT) products and the food products also present with very high levels of counterfeiting.
The IT industry has one of the deafening statistics on counterfeiting.
Products found to be counterfeit include software counterfeits, inks and toners, illegal copying and.
Last year alone, counterfeit IT products in the country were valued at US$7.8 million. The industry accounted for about 14.6 per cent of the counterfeits in the economy.
In Africa, counterfeit IT products increased from five per cent in 2008 to about 30 per cent last year, the values increasing from about US$1 million to US$100 million over the same period.
For ink and toners, the global counterfeits are valued at US$3 billion, with more than 70 per cent originating from China. Africa is the destination for more than half of the global figure.
Counterfeit electrical products have perhaps the most serious effects because they can cause bodily injuries and even death, just as using counterfeit auto parts.
According to a Solar Sales Engineer at Appliance Masters, Nana Darko Owusu Ansah, the phenomenon was on the rise in Ghana.
Globally, counterfeit electrical products are estimated to value US$600 billion a year. Over a 20-year period ending last year, counterfeit electrical products have increased by 10,000 per cent.
Factors and effects of counterfeiting
Weak anti-piracy laws in Africa and Asia, lack of enforcement and corrupt officials at duty posts, lack of clear and strong legal frameworks as well as poor coordination among regulator bodies and and other stakeholders result in the increasing spate of counterfeiting.
Counterfeiting is said to have various negative implications, including the destruction of brand names of genuine products.
At the firm level, it may also lead to capacity under-utilisation, higher cost of production and reduced earnings which affect direct investment, thus leading to job losses.
Governments also lose revenue from duties and taxes, while consumers suffer the debilitating effects such as no value for money. It can also lead to property losses, injury to the body or death.
The fight
Hp, a computer and accessories manufacturer, like many manufacturers, has waged a war on counterfeiting across the globe.
The campaign helped in the seizure of 20,000 counterfeit products by the Ghana Revenue Authority in 2012. The company also facilitated the seizure of more than nine million cartridges and components worldwide.
The Ghana Standardards Authority (GSA) has said that besides its standard setting, certification and standards assessment mandates, it had set up specialised systems and standards for certain products, such as textiles, to enable it to collaborate with manufacturers, suppliers and consumers to stem the tide.
The Head of Scientific Metrology at the GSA, Mr Paul Michael Date, said checking counterfeiting, which had assumed sophisticated levels, required responsibilities from regulators, consumers, suppliers, manufacturers and all players in the market place.
While consumers are required to examine product carefully for signs of bad design, trying them if they are electronic products; ask for country of origin and warranties, manufacturers should also ensure they register products for patent and copyright and inscribe prove of brand ownership on the products to ensure authenticity.
“We are all at risk. And we should check the source where we purchase the items. Buying in traffic and unauthorised places should be avoided,” he said.
In the words of Mr Chalabi, “you cannot clap with one hand. We need the consumer, the regulatory body and the government should assist in stemming the tide on counterfeit products.”
The Silver Star general manager wants the government to close the loopholes and leakages at the entry ports and also treat reports from industry with seriousness and investigate them, rather than disregard them.