Increasing local manufacturing is the best bet to curb counterfeits and illicit trade that costs Kenya about Sh150 billion annually, according to Industry PS Juma Mukhwana.
“As a country, we are not doing well in the manufacturing sector, contributing only three per cent to global manufacturing, a situation that has exacerbated importation, now accounting for about 80 per cent of the products consumed in the country,” the principal secretary said.
He said a large chunk of the imports have turned out to be counterfeits, the more reason Kenya must boost production to cut down on imports.
The PS spoke at the launch of the inaugural international forum on intellectual property protection and enforcement in Nairobi.
The conference brings together more than 300 delegates; policymakers, judicial officers, enforcers, academic scientists and research scholars from East Africa, USA and Europe.
It seeks to discuss ways of bettering the global protection of IP.
Kenya's manufacturing sector value currently stands at about 7.3 per cent of GDP, and is likely to keep declining further, according to Mukhwana.
World Bank data shows the sector in 2007 recorded a high value of 13 per cent of the GDP, before it started declining to seven per cent by 2021.
The PS said the government has formulated plans to drive up the value to about 15 per cent by 2025.
“We have recently launched the County Aggregation and Industrial Parks, an initiative seeking to revamp the manufacturing industry through the counties, by setting up warehouses for raw materials and sheds for storing finished goods in a bid to improve local production and create more employment,” he said.
Mukhwana said so far 14 counties have advertised for developers and investors who would wish to partake the project.
He said the government plans to raise Sh10 billion in the next financial year through the industrialisation fund, collected from the proposed import duty on imported goods that can be produced locally.
“The proposal is in the Finance Bill 2023 and the funds will be directed towards revamping local manufacturing,”said the PS.
He added that the government has pumped in Sh6 billion into the ‘Viwanda Mashinani’ grant to support the youth who want to venture into the manufacturing.
Anti-Counterfeit Authority chairman, Josephat Kabeabea said boosting local manufacturing will help in the fight against counterfeits, as the threat to global economies by the increased infringement of Intellectual Property Rights (IPR) is real and continues to grow.
The World Economic Forum estimates that counterfeiting and illicit trade presently deprives the global economy $2.2 trillion annually, accounting for nearly three per cent of global GDP.
“The latest intellectual property crime study undertaken by ACA, which is the National Baseline Survey in October 2019 and February 2020 on the extent of counterfeiting and other forms of illicit trade in Kenya, shows the value of counterfeit trade to be close to Sh100 billion in revenue in 2018, a figure economists say could be more and increasing each year,” Kabeabea said.
He said the value extent of general illicit trade in the country stood at Sh726 billion in 2017 and increased to Sh826 billion in 2018.
