Illicit trade is harming Kenya's prosperity and competitiveness

Anti Counterfeit Regional Officer Ibrahim Bulle inspects contraband goods worth Sh7 million nabbed at the Port of Mombasa, on February 8, 2017. [File, Standard] Recently, Kenya Revenue Authority reported that the value of smuggled and counterfeit goods seized at Kenya's entry points reached Sh243.5 million in 2024 from Sh200 million in 2023. The seizure of these goods and the continued crackdown on illicit trade reveals the extent to which criminal networks have proliferated in our nation, posing a threat to the lives of citizens. The local manufacturing sector has over the years raised concerns about the increase in illicit goods in Kenya. In addition to posing health risks to consumers, illicit trade undermines industries' investment efforts and stunts innovation. Further, the country's ability to grow its economy and improve the standard and quality of life for its citizens is compromised. The most recent reports from manufacturers paint a gloomy picture of the situation on the ground. For instance, the citizens and cement manufacturers raised an alarm over the adulteration of cement products. Through manufacturers' advocacy efforts and engagement with various enforcement agencies, 13 people suspected of participating in this vice were arrested on December 20, 2024 by a well-coordinated successful enforcement operation by Directorate of Criminal Investigations. Illicit trade is a global phenomenon that describes any form of trade that infringes the rules, laws, regulations, licences, taxation systems, and all procedures that countries use to organize trade, protect citizens, raise standards of living and enforce codes of ethics. The concept of illicit trade extends to money, goods, or value gained from illegal or otherwise unethical activities and includes all actions or conduct intended to facilitate such activities. Urgent interventions It must be appreciated that great effort is expended every day around the world to organise trade to protect citizens, raise their standards of living and enforce codes of ethics. Despite numerous legislative and regulatory efforts to streamline trade in Kenya, illicit trade continues to thrive and plague the country. This calls for urgent interventions to protect consumers as well as manufacturers. As Kenya Association of Manufacturers, we have had extensive engagements with manufacturers as well as government agencies that have a role in the fight against illicit trade. We therefore propose three key interventions. First is the establishment of a strict and comprehensive system of edging out illicit trade in the economy. Illicit trade undermines the concept of a free and open marketplace which is fundamental to improving competitiveness, increasing investment, generating jobs and economic growth. Every day, illicit trade grows in its reach and sophistication, requiring urgent but effective responses. Second is a deliberate effort to create awareness of the challenge and the existing mechanisms for reporting and handling cases when they occur to complement enforcement interventions. Increased knowledge can reduce the misunderstanding that enables perpetrators of illicit trade to benefit unjustly. Third is a joint approach for combating illicit trade. There are diverse forms of illicit trade including smuggling of excisable goods; intellectual property infringements - counterfeiting; trading with illegal weights and measures; trade in illegal, harmful or substandard goods; illegal manufacturing; and Illicit financial flows, among others. These forms of illicit trade are interlinked, which calls for an approach that encompasses all key enforcement stakeholders in what we call the Enforcement Multi-Agency Team. This setup will not only share intelligence but also carry out targeted raids and seizures on suspected illicit operators. - The writer is chief executive of Kenya Association of Manufacturers

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