Counterfeit mobile phones detrimental to Kenyan economy

Counterfeit mobile phones detrimental to Kenyan economyThe Kenyan Anti-Counterfeit Agency said that over the past two years it has seized US$5mn worth of mobile handsets. (Image source: yisris/Flickr)The Communications Commission of Kenya has warned that a proliferation of counterfeit mobile phones is having a detrimental effect on the country’s economy

According to South African newspaper Business Day, the organisation claimed that there are approximately three million counterfeit handsets in Kenya, most of which have been imported from China.

The Kenyan Anti-Counterfeit Agency said that over the past two years it has switched off one million counterfeit phones and seized US$5mn worth of handsets.

With a mobile phone penetration of 77.2 per cent, Kenya plays an important role in the mobile industry in Africa and is home to innovations such as mobile money transfer service M-Pesa.

Despite these successes, the rise of counterfeit mobile phones is hurting local businesses, according to the Communications Commission of Kenya.

John Akoten, deputy director for research at the Anti-Counterfeit Agency, said, “Sellers of genuine phones have registered decreased sales, leading to downsizing of companies, while the government has lost tax revenue.”

Hilary Patroba, a visiting researcher at the University of Stellenbosch, argued that counterfeit goods take money that could be spent on building infrastructure and improving the lives of ordinary people away from the economy.

Patroba added that counterfeit goods attract customers because they are cheap, making it difficult to deal with the problem.

Officials in Kenya are willing to ignore the effect of counterfeit mobile  phones partly because they do not want to upset China, which has invested millions of dollars in infrastructure projects in the country, he argued.

Research from the US Government Accountability Office has shown that between 2001 and 2011, Kenya’s imports from China rose by 1,555 per cent to US$2.4bn, demonstrating the increasing dependence the country has on China.

The Anti-Counterfeit Agency has also expressed its concern about the growing potential of counterfeit phones being used to facilitate criminal activity in the country.

Business Day reported that environmentalists, meanwhile, claim that the substandard quality of the counterfeit handsets means users will purchase replacements much quicker than if they had purchased the genuine product initially, generating high levels of waste.

According to Steven Kuo, China researcher at the University of the Western Cape, China’s influence and importance as an economic player in Kenya will continue to grow as tension builds with Kenya’s traditional allies in the West.

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