Increasing local manufacturing is crucial for Kenya to combat counterfeits and illicit trade, which cost the country approximately Sh150 billion annually, according to Industry PS Juma Mukhwana. Kenya’s contribution to global manufacturing is only three percent, leading to a heavy reliance on imports that account for about 80 percent of consumed products. Unfortunately, many of these imports are counterfeits, emphasizing the need to bolster domestic production.
At the inaugural international forum on intellectual property protection and enforcement in Nairobi, attended by over 300 delegates from East Africa, the USA, and Europe, PS Juma Mukhwana highlighted the importance of addressing this issue. Kenya’s manufacturing sector value currently stands at approximately 7.3 percent of GDP but has been steadily declining. World Bank data indicates that the sector’s value was at 13 percent of GDP in 2007 but dropped to seven percent by 2021.
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The government has devised plans to reverse this trend to increase the manufacturing sector’s value to around 15 percent by 2025. One of the initiatives launched is the County Aggregation and Industrial Parks, aimed at revitalizing the manufacturing industry by establishing warehouses for raw materials and storage facilities for finished goods. This strategy aims to enhance local production, stimulate economic growth, and generate more employment opportunities. Fourteen counties have already advertised for developers and investors interested in participating in the project.
The government plans to raise Sh10 billion in the next financial year through the industrialization fund to fund the manufacturing sector’s revitalisation. This fund will be collected from proposed import duties on goods that can be produced locally, as outlined in the Finance Bill 2023. Additionally, the government has allocated Sh6 billion to the ‘Viwanda Mashinani’ grant to support young entrepreneurs who wish to venture into manufacturing.
Josephat Kabeabea, the chairman of the Anti-Counterfeit Authority, emphasized the importance of boosting local manufacturing in the fight against counterfeits. The infringement of Intellectual Property Rights (IPR) poses a significant threat to the global economy, with the World Economic Forum estimating annual losses of $2.2 trillion, amounting to nearly three percent of global GDP, due to counterfeiting and illicit trade.
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The National Baseline Survey conducted by the Anti-Counterfeit Authority revealed that the value of counterfeit trade in Kenya reached close to Sh100 billion in revenue in 2018, a figure that economists believe is likely to be higher and increasing each year. Furthermore, the extent of general illicit trade in the country rose from Sh726 billion in 2017 to Sh826 billion in 2018.
By increasing local manufacturing, Kenya can effectively combat counterfeits and illicit trade, safeguard intellectual property rights, and bolster its economy. The government’s initiatives and collaborative efforts among policymakers, judicial officers, enforcers, and the academic community are crucial for better global protection of intellectual property and the future prosperity of Kenya’s manufacturing sector.
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