A recent disclosure by the Standards Organisation of Nigeria indicating that the country had been losing an average of N52bn yearly to fake and substandard products has raised much concern among stakeholders in the economy.
The fresh onslaughts in products faking, counterfeiting and substandard product manufacturing unleashed on all facets of the economy have heightened worries among economic players in Nigeria, prompting fears that the country’s economy might be facing a bleak future except viable solutions are found for the three-prong menace.
It is a non-contestable fact that thousands of lives are lost to fake drugs yearly in Nigeeria, which usually find their way into the country through the nation’s porous borders. In most cases, this nefarious trend thrives with the connivance of some corrupt customs officials. NAFDAC, especially under Dr. Dora Akunyili, took the battle to the doorsteps of fake drug manufacturers and importers, and on several occasions at the risk of the officials’ lives. Despite all the efforts, unscrupulous Nigerian businessmen have kept on sustaining the illicit business just for personal gains to the detriment of the economy and fellow citizens.
The purchasing public has also been blamed for the trend. In an address by the Director-General of SON, Dr. Joseph Odumodu, to stakeholders in February this year, Nigerians were blamed partly for the trend. According to Odumodu, Nigerians are known to be acute patrons of substandard and fake products. He said in an attempt to buy cheap products, they often bought fake and substandard products, which wore off easily. At the end of the day, he said, they ended up spending more money to buy the same products over and over again.
However, analysts tend to correlate this trend with the growing rate of poverty in the land, which, according to them, is witnessed in the fact that the purchasing power of individuals often influences their buying preferences. A group, Social Alert For Change, paints the scenario succinctly, “An average Nigerian family in lower middle class is more likely to purchase drugs from a ‘chemist’ rather than go to the hospital for accurate diagnosis and treatment. In this case, there is a greater chance that the consumer may end up buying either substandard or outright fake drug. A similar scenario plays out for other products used by consumers.”
Practically, every sector of the economy experiences product counterfeiting or faking. Director Odumodu confirmed the people’s fears about two and a half years ago, when he resumed as the agency’s boss. According to him, about 85 per cent of products in the country then were either substandard or fake, making the country the highest among consumers patronising substandard products across the globe.
Recently, however, he said the trend had dropped to about 45 per cent. With his eyes set on achieving 30 per cent level at the end of this year, Odumodu admitted that despite the efforts put in so far, the fight against faking, counterfeiting and substandardisation remained a tough one.
In a spirited and renewed effort to check the trends, the current administration in SON introduced some strategies. SON’s arrowhead of the fight against substandard products, the Zero Tolerance policy for substandard products, has since blown into an expanded campaign.
Implementation of the Zero Tolerance campaign, for example, led to meeting with stakeholders, including a number of industrial, trade and professional groups. The immediate outcome of the stakeholders’ meetings with Alaba International Traders Association, for example, was the establishment of the SON Help Desks in the market and other markets across the country.
Products targeted by fakers cut across items like drugs, tyres, household utensils, phones, electronics, clothing materials, IT equipment, as well as food items like beverages, milk, canned foods, toys, cables, automatic voltage regulators, amongst several others.
Under the current loss estimate of N52bn yearly loss to fake and substandard products auto spare parts appear to be taking the bigger chunk in terms of volume and value of fake products. The sector, according to SON, has an estimated value of N20bn yearly expenditure on fake products.
And in apparent response to the devastating effects of the trade, SON said recently said it had seized fake and substandard products valued at over N9bn, while goods worth over N4.5bn had been destroyed so far in a number of destruction session in the last two years. Goods periodically seized and destroyed include several packs of cigarettes, consumable products, cables, electronics, other household equipment and assorted tyres. Such goods are usually intercepted and impounded randomly in the various markets by the agency since it was removed from border posts and ports. Its araes of operation include markets and warehouses within and outside cities.
But it said the campaign of zero tolerance for fake products, introduced in last year, had whittled the trend down.
However, stakeholders appear not to be in the same boat with SON. According to them, The agency definitely needs to do more in its drive to ensure that only quality goods are available in the country.
Considering the vast nature of the Nigerian terrain and its markets, stakeholders believe that meeting the 30 per cent fake and substandard products level in the polity by the end of this year by SON may be an uphill task.
In view of the burden and effects such trends are producing on the employment market, stakeholders in the manufacturing, export and other non-oil sectors of the economy and consumers have woken up to the threats presented by product faking.
According to them, implementation of strict penalties against culprits, which might also include the restructuring of existing laws, remained the most effective way to tackle the menace.
The Managing Director, Grand Oak Limited, wine and liquor manufacturers, Akshay Kumar, said consumers’ plight in the face of up upsurge in the incidence of fake products and pass-offs has remained pitiable.
According to him, fake products are very damaging to the consumers for many reasons.
He said, “First of all, consumers often end up paying high prices for a product that is fake and does not deserve that price. Secondly, depending on the type of fake product involved (if it is food and drink product), it could damage their health, even leading sometimes to death. Thirdly, sometimes they end up buying it deliberately as the fake product is sold at a discount price lower than the original product’s price.
“This heavy incidence of fake often pushes consumers towards making alternate brand choices since they are not sure about the genuineness of their favoured brands.
He said all the above criteria could affect the government too as it loses taxes and revenue. Besides, it showed that the government was not in control as illegal elements were operational.
Kumar said the government needed to embark on increased awareness education as well as give enhanced support to SON and NAFDAC and other agencies involved.
“Companies too need to be more creative in product design and branding so as to ahead of fakers,” he said.
On its part, the Manufacturers Association of Nigeria said Nigeria and other developing countries in Africa had been at the receiving end of fake products cheaply dumped in the continent.
It urged the Federal Government to review all laws prescribing sanctions for offenders in dumping, faking and counterfeiting to enhance deterrence.
this report is culled from punch newspapers