Shortly after he was appointed in 2011, Director General of Standards Organisation of Nigeria (SON), Mr. Joseph Odumodu raised the alarm when he revealed that 80 percent of products imported into Nigeria are either fake or substandard. This was in furtherance to the 1996 threat of a formal complaint to the World Trade Organisation (WTO) that China was dumping fake products into the country. At that time, China responded by explaining that it was not deliberately dump inferior goods on Nigeria but that Nigerian businessmen were culpable because they imported the products.
Over the years, Nigeria has groaned under the yoke of fake and substandard products in terms of human and material losses. In the drugs category, countless lives have been lost while adverse effects have led to deformation of children. Thousands of houses have been burned and with them many lives as a result of the use of substandard cables and electric appliances imported into the country or even manufactured in some illegal factories. The national economy has also directly suffered in terms of lost revenues through taxes.
Nigeria must rank among the world’s highest market for fake and substandard products and equipment as evidenced by the wanton display of all manner of poor quality goods and products littering the open markets, shops, supermarkets, chemist and other retail shops. These fake and substandard products span all classes and categories of items from drugs, electrical, electronic household appliances and equipment, building materials, tyres and tubes, automobiles, machine spare parts, food and machines to mention a few. Conservatively, about N15 billion is said to be annually lost to fake and substandard products in Nigeria. Lives continued to be lost in road accidents when substandard tyres imported from Asia burst on high speed and vehicles either summersault or swerve into other vehicles on the highway.
In 2014 alone, SON destroyed fake Century brand of stabilizers and other items valued at N5.5 billion. For the mobile market, the counterfeit segment has grown to become larger than life, generating huge income for the perpetrators at the expense of the consumers, the original equipment manufacturers (OEMs) and the economy in general. It is estimated that in 2013 alone, about N2.7 billion was spent on the importation of one million units of fake phone units. Industry watchers believed that this is a huge threat to the nation’s economy, if something is not done to check the trend, especially at this time that the country needs to boost its internal generated revenues (IGR) as a result of the drop in crude oil price in the international market. Smuggling is a major activity of importers of contrabands such as fake phones; fake cables; fake and substandard drugs; adulterated products and therefore, it could be one way through which they enter the.
Economically, it is detrimental to revenue generation drive of the government. Smuggling is wilful under-payment of Customs duties, trafficking-in prohibited or restricted goods and use of unapproved routes and ports. Forging of Custom documents, touting in Customs goods and documents, and those who engage in it are considered economic saboteurs, robbing government of huge revenue that could have been used for other economic developmental purposes. This way, the economy loses potential employment opportunities as genuine manufacturers and employers of labour are hindered because of illegal activities. Investors are discouraged, thus dealing a deadly blow at government’s efforts at encouraging foreign direct investment (FDI).
Some analysts have concluded that the influx of counterfeit and sub-standard products into the domestic market raises serious doubts about the current efforts by the federal government to resuscitate the real sector for it to contribute meaningfully to the Gross Domestic Product (GDP).
Some Nigerians however observed that government’s inability to provide steady electricity supply, adequate security, are some the things to promote importation of fake and counterfeit products. They also believed if the government is committed to its people, the citizens would not patronise any counterfeit or substandard product.
Economic Confidential finding however revealed that about 99 per cent of the fake and substandard products, which are in circulation in the country, are sourced from China. The findings also provided that Nigeria came second as China trade partners in Africa, after South Africa.
It was learnt that for every original product in Nigeria, its fake alternative is readily available in the market. And the products ranges from electronics to household equipment like television, cables, sockets, bulbs, fridges, stoves, cooking pots as well as household utensils. Also listed are products like wines, juice, matches, body creams, confectioneries and phones.
Drugs
Many Nigerians are reported to have fallen victim of fake and substandard drugs. According to a report, most of these drugs are sold at low prices and are usually offered for sales by hawkers who are more or less quarks with no medical orientation.
NAFDAC in 2001, carried a baseline study to ascertain the level of incidence of fake drugs. The first phase of the baseline study by NAFDAC in six major ‘drug markets’ across the country in early 2002, to measure the level of compliance to drug registration, revealed that 67.95 per cent of the drugs were fake and unregistered by NAFDAC. A repeat of this study in 2003 and 2004 however, revealed a 67 and 80 per cent reduction respectively.
NAFDAC observed that counterfeit drug is one of the greatest problems of the industry with an estimated 50 per cent of drugs and food drinks sold in Ariaria Market in Aba, Onitsha Market, Alaba Market, Lagos and other markets across the country were counterfeits. It lamented that many families had been wiped away due to the after effects of these deadly medications and consumable goods on human health.
A study carried out in 2008 shortly before the arrival of the current Director-General of the Agency, Dr. Paul Orhii, on the Quality of Anti- Malaria in Sub-Saharan Africa (QAMSA), puts the incidence of the counterfeiting of anti-malarial drugs at 64 percent, which led to a declaration of a zero tolerance war on counterfeits by the DG, shortly after assuming office.
NAFDAC’s Deputy Director, Public Relations, Ibrahim Jimoh said, “Drug counterfeiters taking advantage of the growing access and sophistication in printing technology have resorted to manufacturing fake drugs with fake NAFDAC registration number, and packaged in a way that it has a close resemblance with the approved or registered drugs by NAFDAC.”
Scores of children died a few years ago when they an adulterated teething drug was administered on them. Security operatives also paraded one Agu, Odumodi Akubue and Francis Uba in Lagos arrested at their local factory in Iba Housing Estate on the outskirts of Lagos with a lorry load of fake 1,750 empty cans and four gallons of insecticides, 11 sub-standard gas cylinders, 178 cans of fake Baygon, 47 cans of Killit, 70 cans of Raid insecticides, 140 cans of Mobil insecticide, four gallons of Rambo insecticides and 214 cans of Easyon Starch.
FMCGs and hard wares
Fast Moving Consumers Goods such as Milk, wines, juice, beers and non-alcoholic drinks have also been targets of counterfeiting by unscrupulous businessmen. Attempt to nip this in the bud has led to the promotion of a bill to punish dealers of fake products by the Standard Organisation of Nigeria (SON) through the House Committee on Commerce and Industry, chaired by Hon. Mohammed Ogoshi Onawo. The bill, when passed, would empower SON to arrest and prosecute importers as well as sellers of fake products in the country.
According to the Director-General of SON, Mr. Joseph Odumodu, China, India and other Asian countries accounted for 80 percent of fake products in Nigeria. He noted that 20 percent of annual road accidents were as a result of the over 50 million substandard tyres imported into the country by dubious importers and counterfeiters on a yearly basis.
Mrs. Testimony Madubo, a dealer in building materials like wash hand basins, water tanks and toilet seats, said, “I think it is because Nigerians like buying cheap things that is why fake products are everywhere. There are still original ones, but because the prices are on the high side, many people cannot afford them. Also, the system is so corrupt that everybody wants to make quick money, so they are all looking for ways to cut corners. Until government makes a scapegoat of some of these counterfeiters, many people would still be involved in it,” she warned.
However, an Assistant Director in the Federal Ministry of the environment, Mrs. Oluwatoyin Agbenla, though acknowledging that the purchase of fake or substandard products could be linked to the poor status of the purchasers, said poverty cannot be separated from environment management. “The fact that a product is cheaper does not necessarily mean it is better,’ she said.
Narrating his ordeal to Economic Confidential, a businessman in Lagos, Daniel Otuagha, said that he bought a generating set that packed up after about two months, noting that sometimes, fire disasters in houses are due to fake electrical cables.
In a related development, Prince Onyekachi, who sells phones and other goods at the Westminster bus-stop on Apapa / Oshodi Expressway, admitted that 70 percent of the new products that find their way into the Nigerian markets are counterfeit.
“Many of the new products around are fake. They are China products, and they don’t last. Nigerians always buy them because they are cheap. Also, 65 percent of phones in circulation are not original. It is even more rampant among shoes. Some are produced in Nigeria and later taken abroad where the name of a popular shoe manufacturer is scripted on it, only to be returned to Nigeria as original. That is why if you are not careful, you can buy a counterfeit shoe thinking it is Italian. By the time you wear it for few months, it begins to wear out. That is why some Nigerians would prefer to buy second-hand imported materials or equipment to new ones,” he noted.
While reacting to the activities of fake and substandard products in Nigeria, a public affairs analyst, Olalekan Olaiya told Economic Confidential that, “they are a disservice to the welfare and well being of Nigerians but as long as these products continue to get patronage in the market it will be difficult to eradicate them. Indeed, as long as poverty remains a challenge for the average Nigerian he will continue to patronize sellers of such products. To the poor man, once the product is able to satisfy his immediate need, there is no problem especially if he finds himself being alive after the experience”.
In his view on whether the regulatory agencies have lived up to their billing in trying to nip this problem in the bud. Olaiya noted: “I believe that the effect of the tremendous progress accomplished by the late Professor Dora Akunyili as DG of NAFDAC in the fight to reduce the prevalence of fake and substandard drugs in the market has rubbed off positively on government agencies across the board. Besides the challenge of corruption which is not peculiar to these agencies, they are doing their best”.
Also, while responding to the cost effect of fake and substandard goods on investors, the analyst maintained that; obviously, producers of genuine goods will suffer low sales and subsequently a poor return on investment. This will translate to loss of jobs, reduction in tax payment to government and a weak economy that is unable to compete at the international level. It discourages production and encourages imports which are not good for the economy. In crunch times like Nigeria is entering now due to falling oil price, manufacturing would have provided succour.
Despite the believe in some quarters that, this activity provide job opportunity to a fraction of unemployed Nigerians, Olaiya held “producers of fake and substandard goods do not pay taxes. They do not observe extant laws on the environment and labour laws. They employ slave labour and pay pittance to their employees. Such practices are detrimental to the development of an economy.
While suggesting ways to curb this menace, Olaiya said, “I am aware that private sector operators have taken up the challenge of reducing the menace of fake products by partnering with regulatory agencies through capacity building and funding of initiatives that can curb the practice. It is also imperative that regulatory agencies and corporate Nigeria intensify support to research institutions where cheaper and better alternatives to some expensive products can be developed. Also, if the banks can adequately fund budding entrepreneurs and start-ups, the desire to engage in the production of fake and substandard goods will diminish considerably. Of course, government must provide the enabling environment”.
Also responding to allegations that some security agents sometimes receive bribe from the perpetrators of this acts and turn a blind eye, the analyst stated “like other areas of national life where corruption and impunity have eroded the observance of what is morally correct, it comes as no surprise to anyone that this is happening. Is it not morally incumbent on the workers in such establishments as well as everyone who participates in the chain from production to the market shelf to bring the existence of such anomaly to the awareness of regulatory and security agencies? The society is morally bankrupt. Poverty has skewed the moral compass of the people.
He was also of the view that, no meaningful progress can be attained under such a scenario. “The annoying part is that shop keepers knowingly stock fake and substandard goods and warn patrons of their existence. The question then is why are Nigerians willingly purchasing these goods?”
For him the dangers of fake and substandard product among other things include; job losses, poor health, burnt buildings, denial of revenue to government, relocation of factories to other countries, waste through repeated expenses among others.
