Counterfeit Kenyan goods being sold in South Sudan have caused diplomatic tension between Nairobi and Juba, putting genuine manufacturers at risk of having their products blacklisted in the country.
The goods are either smuggled to South Sudan through the Ugandan border or manufactured in Juba’s black market, a Kenya government memo seen by The EastAfrican reveals.
So rampant is the trade that, fearing a backlash against genuine manufacturers, the Kenyan ambassador to South Sudan has written a strongly worded letter to the Kenya Bureau of Standards (Kebs) asking the agency to act or risk having Kenyan goods barred from entering South Sudan.
“The Embassy is in possession of products that have been withdrawn from shelves following backlash from consumers over low standards. Some of the manufacturers have gone through proper certification of their products by the Kenya Industrial Property Institute and Kebs but produce substandard (goods) for this market, in effect counterfeiting their products,” said Kenya’s ambassador to Juba, Chris Mburu, in the letter to Kebs.
The confiscated goods comprise popular Kenyan brands, shining a spotlight on the lack of a common anti-counterfeit and quality standards within the region as the fraudulent processors are said to be having it easy in Uganda and South Sudan.
The letter by Nairobi’s envoy in Juba was copied to the Kenyan Ministry of Foreign Affairs.
Mr Mburu said that South Sudan was already shunning Kenya-made goods after the counterfeiters flooded the market with the low-quality detergents, soaps, hair shampoos, food products, vehicle engine oils among others.
The diplomat called on Kebs to sensitise Kenyan manufacturers and other government agencies at the border to work together to ensure that only genuine goods are exported to Juba to avoid the situation getting out of hand.
The EastAfrican has learnt that Kebs convened a meeting to discuss the matter last month, drawing in most of the regulatory bodies as well as the national chamber of commerce.
At the meeting, there were claims that weak anti-counterfeit legislation in Uganda had opened a loophole for shrewd manufacturers who had set base in the country to counterfeit Kenyan brands and export them to South Sudan.
The Kenya Association of Manufacturers (KAM) has also expressed concern over the export of counterfeits, which could lead to significant loss of the key export market.
“It is unfortunate that this is happening within the East African Community region and damaging the reputation of Kenyan manufacturers in the South Sudan market.
“The entire menace has been caused by disparities in the legal framework within EAC, and in this case involving the two neighbouring countries of Uganda and South Sudan.
“We highly suspect that these counterfeit products are manufactured somewhere in Uganda and then transported by road to the South Sudan market,” KAM officials said in a letter to the Kenyan Anti Counterfeit Agency (ACA) when the affected products list was shared with the association in September.
More than 20 producers—14 detergent, cooking oil and shampoo makers, five engine oil manufacturers, including a renown multinational brand, as well as a number of food-additive companies—have fallen victim to the counterfeit cartel.
The Kenyan Embassy in Juba now wants Kebs to enter into a memorandum of understanding with the South Sudan Bureau of Standards to ensure that only genuine products cross into the country.
The South Sudanese standards body is set to benefit from benchmarking with Kebs under a memorandum of understanding to build capacity to detect counterfeits.
The Uganda Anti Counterfeit Bill has been stuck in parliament since 2008, leaving a legal loophole for fraudulent processors to exploit.
South Sudan is yet to enact anti-counterfeit legislation, and the EAC has no common law against counterfeiting, making the region vulnerable to cartels.
The value of Kenyan exports to South Sudan declined by 22.6 per cent from $160.7 million (Sh16.7 billion) in 2017 to $130 million (Sh13 billion) in 2018, according to government data.
Juba offers a huge market for Kenyan manufacturers since South Sudan is yet to set up its own industries after years of conflict. Neighbour Uganda is still building its industries, amid infrastructure deficiencies, and is a landlocked country just like South Sudan.
Nairobi is facing concerns that the agencies tasked with fighting the fakes may be overwhelmed. A recent special survey done by Kenya’s Auditor General found that ACA has neither the manpower, equipment nor finances to wage war on the multibillion dollar counterfeits industry now threatening both local and export markets.
The audit found that ACA has just a quarter of its required workforce, which is poorly trained and overworked, making it hard to tame the illicit practice that costs Kenyan manufactures $2 billion every year.
“According to the ACA management, a staff establishment plan that was approved by the Board proposed that a staff complement of 250 was needed by the agency. As at the time of the audit, however, ACA had a staff complement of only 69, three of whom are on contract, 65 per cent are technical and 35 per cent are support staff. This represents about 28 per cent of the total staff required.”
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.