Counterfeiters Threaten N612 Billion Yearly Revenue From ICT

About $2 billion revenue which yearly enters the nation’s economy from activities at Africa’s largest Information and Communications Technology (ICT) centre, Computer Village, Lagos, is currently under threat from counterfeiters.

This comes as operators at the market lament the impact of the economic recession on sales. The Guardian learnt that counterfeiting has increased by almost 50 per cent within three years of a major raid by the Standards Organisation of Nigeria (SON) on the market, located at Otigba, in Ikeja.

Besides the churning out of substandard products with their concomitant health and safety hazards, the nefarious activities also bleed the economy as manifest in the low volume of trade and revenue loss.

The pioneer Minister of Communications Technology, Dr. Omobola Johnson, at a Lagos forum shortly before leaving office in 2015, revealed that Computer Village contributes $2 billion (about N612 billion) yearly to the economy, noting that the fund comes mostly from phones and exploration of all sorts of software applications.

Already, the World Bank has hinted that global economies lose between $600 billion and $700 billion yearly to counterfeiters and theft of intellectual property. The Guardian further learnt that the market for counterfeit and pirated products are of two genres – primary and secondary.

A source at the Computer Village explained that in the primary market, consumers purchase counterfeit and pirated products believing they have purchased genuine articles. He said these products are often sub-standard and carry health and safety risks that range from mild to life-threatening.

According to him, at the secondary market, the buyers duly know what they are purchasing is fake but for the price. Noting that measures to combat the menace at both markets differ, he added: “It is therefore important to know how much of a threat each poses when considering product specific strategies.”

A further investigation showed that some brands of products, especially mobile phone categories like Samsung mobile, LG, Gionee, Wiko, Asus, Lenovo and Tecno suffer counterfeiting by as much as 10 to 25 per cent. Home appliances, including juicers, sandwich makers, iron, electric kettle, blenders, are affected by as much as 20 per cent. Other products prone to faking include printers, cartridges and ink.

Confirming the development, the Managing Director of Tecno Nigeria, Chidi Okonwko, said the brand had been counterfeited by 10 per cent, stressing that some peddlers often display the fake products at different locations within the market precinct.

“It is affecting a whole lot of things in this market. We hear of people complain about Poor Quality of Network Service (QoS), the activities of these phone fakers contribute a lot to that. So, users of such phones are losers, government is losing revenue. We are losing the market too as original equipment manufacturers and this spells doom for the market,” he stated.

A major operator in the market, who simply gave his name as Chukwuemeka Alika, said there had been a rise in the activities of counterfeiters in the market lately, saying except urgent measures were adopted, the problem “may snowball into an open confrontation. It is annoying that you will see a lesser brand of the phone you are selling in the market at a very ridiculous price. Those of us who have spent huge money to import the originals will be at a loss.”

It was also learnt that most of these fake products come mostly from Asia, especially from Vietnam, Thailand, Taiwan and even China. The Nigerian Communications Commission (NCC), in 2015, disclosed that about 250 million substandard phones were being sold yearly in the country.

The Executive Vice Chairman of the commission, Prof. Umar Danbatta, who gave the figure, then in an acting capacity, noted that the damaging impact of the products on the economy could not be quantified in socio-economic terms.

Specifically, he lamented the adverse effects of the products on a broad spectrum of the national life, saying that the ugly development posed grave danger to the environment as well as the health, safety and privacy of the buyers.

His words: “Counterfeiting is a growing economic problem affecting a wide range of products in the ICT sector. Mobile phones are especially targeted with some 250 million counterfeits sold yearly. This number constitutes about 15 to 20 per cent of the global mobile phone market.

“Apart from the obvious negative economic impact of this ugly trend on the manufacturers of genuine products, there are other consequences for operators, government and authorised dealers which include brand evaluation, loss of revenue, copyright and trademark infringement, unfair competition, loss of tax, cost of compliance with applicable national legislation, national security and loss of employment opportunities.

“This menace also poses danger to the health and safety of consumers, equally breaching the privacy of consumers. A collective effort is urgently needed to curtail counterfeiting in ICT.”

To the President of the Association of Telecommunications Companies of Nigeria (ATCON), Olusola Teniola, there is the urgent need to curb the high prevalence of fake mobile phones in the country.

According to him, more that 20 mobile phone brands in circulation are not NCC-sanctioned. He urged more stringent measures to curb the trend. The Director of Compliance, Bede Obayi, told The Guardian that the SON has been unrelenting in its efforts to sanitise the market. He noted that the task could be made easier when collaborations are struck and information shared among government agencies, operators and other stakeholders.

Obayi regretted that these imported products come in through the seaports and land borders undetected. “All these are sources through which they come into the country and you must be aware that SON is not inside the port. But we use the opportunity in the Nigeria Integrated Custom Information System to see the importation of products from the sea ports, but the point is that what you are made to see can change from one point to another at the point of clearing because you are not physically there,” he added.

The President of Computer and Allied Products Dealers Association of Nigeria (CAPDAN), Ahmed Ojikutu, had told The Guardian that in 2017, it would no longer be business as usual for counterfeiters and criminally minded people at the market.

CAPDAN is an umbrella body that represents the interest of vendors, suppliers, manufacturers and an association that deals in the sale and distribution of computer and allied products in the market. The Computer Village is the biggest technology market cluster in Nigeria.

The Director, EMEA Mobile Manufacturers Forum, Thomas Barmuller, stressed the need to address fake phones due to their health hazard.