INTERVIEW: 40 per cent of goods in Nigeria are substandard, counterfeit – SON

Hewlett-Packard hosted the 2014 anti-counterfeit conference in Abuja to highlight the negative impact of counterfeit and fake products on the economy. The Director General, Standard Organisation of Nigeria, SON, Joseph Odumodu, was there. He spoke with PREMIUM TIMES Business Editor, Bassey Udo

PT: How serious is the problem of counterfeiting, and how much is Nigeria losing from it?

SON: The use of counterfeit products is very dangerous. Counterfeit destroys the economy. Counterfeit is like termite, it eats up the foundation of the house. Before one knows what is happening, the house is brought down to the foundation.

The Standard Organisation of Nigeria, SON, does not have the statistics on the loss to the economy from counterfeit. But, taking the situation in the textile industry for example, over one million jobs were lost in the last 20 years due to counterfeiting.

There was a time the textile industry was very strong. Suddenly, the country opened its borders and allowed sub-standard textile materials to flood the country from Asia and all other places. The immediate impact was that the local textile industry could not cope with the pressure from competition. Consequently, most of them had to close down.

PT: What value can one put on one million jobs lost over the period in Nigeria?

SON: That information is not available to us. But, there are other industries where the country lost over N100 billion. That’s the only statistics available. But it could be more.

The point is: Do we know how many people may have died from the negative effects of using counterfeit products? Do we know how much people lost their lives from this?

Some of the chemicals used in printing, like ink, contain some heavy metals that have some serious health-threatening ingredients. For example, human bodies do not tolerate lead or zinc, which can lead to some malignancies.

The regulatory agencies must not delay to take action against any agency found to have been involved in counterfeiting. For instance, counterfeiting has done a huge damage to the textile industry in Nigeria. We must find new innovative ways to tackle the problem.

What we must do as a people is to reject counterfeit products in every form. The more people continue to buy counterfeit products, the more they would continue to thrive. And the challenge Nigeria is having today is that there is no strong regulatory framework as is the case in Europe and America.

The country has a very weak regulatory framework. Our borders are porous. The level of ignorance among consumers is very high. The level of corruption too is very high. If all these things are considered, one must be a magician to make a success of regulation and enforcement in this environment. Sometimes the agencies may have to break the law to protect the industry.

If counterfeit products are not allowed in Europe and America, they find a way and send them to Nigeria, the largest market in Africa. That is why the country is having the problems it is having.

What the people and the government need to do is to say no to counterfeit. The challenge is that the average Nigerian is impoverished. So, even when people know that a product is a counterfeit, they still buy them.

Therefore, we must communicate with consumers on the negative impact of counterfeit. There must be collaboration with regulatory agencies to ensure that people who do the wrong things are dealt with according to law to serve as a deterrent to others.

We must build stronger coalitions. We must ensure that the consumers are sufficiently educated on the negative consequences of counterfeit. Communications is the key, because ignorance is a big problem.

It also the job of the media to ensure that the message passes to the target audience. The more people that are aware of the consequences, the more we would be able to tackle the problem.

In America, there are one dollar shops and one pound shops in Europe where cheap products are sold. Anybody that goes there knows the quality of goods he is buying as well as what to expect.

But, in Nigeria people go to Alaba market or Computer Village and buy all kinds of products without knowing the quality of what they are buying. Someone might be buying products that bear the label of the original without knowing he is buying a counterfeit product.

There are situations where products in the market do not have names,
only for the distributor to give it a brand name it fancies.

PT: What is SON doing to check the proliferation of counterfeit products?

SON: Don’t forget, SON is no more at the ports. As a result, it has created an electronic data system for registering products. Today, SON is insisting that every consumer product it is regulating must have a code on it. If a product does not have a code, it means it is not genuine.

Through that process, we are able to create a more robust database that would help us trace the fake product to its owners. Each time the SON finds a bad product in the market, the problem has always been how to trace it to the retailer or agent who brought it into the country or to the manufacturer from anywhere in the world.

Once that database is established, it is easy to blacklist companies who are agents or importers, so that they are no longer able to bring in these counterfeit products into the country again. That is the kind of thing SON is doing.

We must employ technology to fight counterfeiting and strengthen enforcement through sanctions. We must look more at the activities of the authorized agencies.

Most products brands record very high sales. But, the bulk of the sales are not by the brand owners themselves. It is their agents and representatives, who, ironically, are the major source of counterfeit of products. Therefore, the dealers and brand owners have a responsibility to regularly check on activities of their appointed agents and representatives.

The brand owners must work with the regulatory agencies to educate Nigerians about the negative impact of counterfeit of products. Government has a responsibility to save Nigerians from themselves. The responsibility is huge for the regulatory authorities.

Some of the counterfeit products come from China and Asia where government is looking up to for foreign direct investment. How does SON check these companies who bring in these products or connive with some manufacturers to import these products?

If anyone wants to set up business in Nigeria, SON would be the first to lend its support. It is a lot easy to regulate in Nigeria than offshore. We will encourage companies to come and make products in Nigeria, because by doing that we would be getting access to technology know-how and also create opportunity to help employ Nigerians. Government must encourage foreign direct investment. It does not matter where they come from.

PT: What is SON doing to strengthen legislation and enforcement of the law against counterfeiting in the country?

SON: Currently, before SON impounds a fake product, the law says it must obtain a court order to do so. But, we now have a new law that would soon be out that would allow SON to impound products and destroy them within 90 days.

The SON does not have prosecutorial powers today. The agency wants to be able to prosecute offenders. The laws in Nigeria today only allow the police and the Attorneys-General of the Federation to prosecute.
This is affecting enforcement of regulation against counterfeit.

So, SON today cannot say how many offenders it has been able to send to jail as a result of counterfeiting. Any time the agency hands over arrested offenders to other agencies of government for prosecution, it is not the same passion that SON has that those other organizations have. SON also wants to acquire those powers through the legal process to be able to discharge its job on time.

Again, the penalties for offences stipulated in the existing laws appear to be incentives to criminal activities, rather than a deterrent. The highest fine for bringing fake and counterfeit goods into the country is about N50,000. What this means is that a criminal who knows he is bringing into the country counterfeit products, and knows how much he is likely to make from the business, would prefer to do the bad thing and keep his fine of N50,000 in his pocket in case he is caught.

But, things are changing today. Before the end of this year, the country is going to have a brand new law that gives SON a lot of powers to do its job. At the moment, the job SON is doing is like somebody who is chained, with his two hands tied to the back, and a lion is brought for him to fight. He can never win.

The SON is willing to work, but it has serious handicap. In 2011, about 85 per cent of goods in circulation in the country were substandard and counterfeit. Today, the level has gone down to 40 per cent, which is still not good enough yet. What this means is that out of every 10 products, four are substandard. The important thing is
that progress is being made.

But, more progress would be made when consumers are sufficiently equipped with the knowledge to make the right decisions about the products they are patronizing.

PT: What is the relationship between SON and the National Assembly? And can the relationship be exploited to ensure that it gets the right regulatory instruments in place soon?

SON: SON does not have any problem with the National Assembly. The agency has a good rapport with the lawmakers. But, we want to go further to engage the judges in our judicial system, like what they have done with NAFDAC (National Agency for Food and Drugs Administration and Control).

SON wants to ensure that we have a symposium or workshop with our judges. This would make it easier for them to understand the processes involved in what SON is doing, how SON is doing the work and the dangers involved in not taking action against offenders at the appropriate time. I think we are making progress. All we are asking for is: Please have some patience, while we work to bring these laws in place. When this is done, I think that Nigeria would be a better place for all Nigerians.

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