How China floods Nigerian markets with fake products

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Pirated ankara textiles imported from China

Chinese nationals have turned Nigeria into a dumping ground for substandard products manufactured in their country thus putting the health of Nigerian consumers and the economy of the country at risk, writes Helen Eni

For many years, China has been Nigeria’s biggest source of imports but the Asian country is also the source of one of the country’s biggest problems – fake and substandard products. The Director-General, Standard Organisation of Nigeria (SON), Joseph Odumodu, notes that China accounts for over 80 per cent of fake, substandard, pirated and counterfeit products flooding the Nigerian market.

China has a reputation of producing and exporting substandard products across the world, some of which include pharmaceuticals, auto spare parts, mobile phones, textile materials, vehicle spare parts, DVDs, electronics, electrical equipments, branded footwear, designer clothing and bags, toys, toothpastes and toothbrushes, cosmetics, building materials, office and household appliances and equipments, cosmetics, wine, food products, confectioneries, and much more. A significant percentage of these counterfeit products are targeted at the Nigerian market, thus making Nigeria one of the world’s largest markets for fake and substandard products.

The counterfeit business is also huge in the technology sector, generating huge income for the perpetrators at the expense of the consumers, original equipment manufacturers (OEMs) and the national economy. For instance billions of naira is spent annually for the importation of counterfeit mobile phones and pirated computer software. Pirated books, music and films, powered by Chinese technology, are readily available in the Nigerian market. It is estimated that the country loses about ₦50 billion annually to importation of fake and substandard products.

This problem has persisted for so long because of the lack of political will by the Chinese authorities to curb the manufacturing of substandard and fake products for exports to developing countries like Nigeria as the failure of past efforts by Nigerian regulatory authorities to get the cooperation of their Chinese counterparts in tackling the menace has indicated.

In one of such instances, SON held a meeting with the Chinese Standards Organisation, a body that regulates imports and exports of the Asian country to discuss the problem and find ways of putting an end to it. “In fact, they were very hostile to us because at the end of the day what we were asking for was not what they were saying. At a time they pretended that they no longer understood English language just to make sure that that discussion was terminated. But we made our point clear that we have the right to fight for the safety and performance of products that are brought to Nigeria,” Odumodu recalls of that encounter.

It is pertinent to note that these same Chinese authorities cooperate with America and European countries in ridding their markets of fake or counterfeit products. In May last year, for instance, the police in Beijing, capital of China, raided a factory producing fake Apple iPhones following a complaint by the US. During the raid, police found six production lines hidden in the depths of an industrial zone on the northern outskirts of the Chinese capital. About 41,000 units of the iPhone valued at 120 million yuan ($19 million) were said to have been produced in the fake factory, which was disguised as a gadget maintenance shop since the commencement of their operation in January 2015. It was found that the owners of the factory bought used smartphone mainboards (motherboard) from overseas and fake parts bearing Apple logos from Shenzhen, a technology hub in southern China and then hired hundreds of workers to assemble and repackage the fake smartphones for export.

The Chinese authorities were alerted to the crime by the US authorities after some of the counterfeit phones found in the US were traced to the factory. China has also agreed to work with the US authorities to end the influx of fake and counterfeit products entering the US from China. Consumers are of the view that this move by the US would only reduce but not put an end to the entry of Chinese fake products into the US market.

The consumers’ pessimism is hinged on the alleged Chinese government’s lack of commitment to the protection of Intellectual Property Rights (IPRs) even though the country has, since 1979, acceded to the major international conventions on protection of IPRs. Despite the gravity of the problem, the awareness that IPR infringement is a crime is very limited among Chinese businessmen. There are even allegations that the Chinese local government authorities assist local counterfeiters to hide their production lines in safer places to avoid any disruption of their activities by the federal authorities.

According to Wikipedia, “Despite the growing number of raids on hubs for traders of counterfeited goods and the rise in the number of lawsuits brought against companies that use counterfeited technology, codes, or logos, the level of government response does not quite match the degree to which counterfeiting is happening in China.”

However, while the US is making some headway in her collaborative efforts with the Chinese government to stop the influx of counterfeit products to the US market, the same cannot be said of Nigeria, which does not appear to command the kind of respect these other nations have with China. With Nigerian government often turning to China for succour in developing her infrastructure and providing other social services, the country lacks the muscle to compel the Chinese government to help fight the war against counterfeiting. Moreover, unscrupulous Nigerian importers and businessmen/women also collaborate with their counterparts in China to fuel the counterfeit business. Similarly, some officials of the Nigerian Customs Service who are positioned to check the influx of fake and counterfeit products allegedly aid offenders in perpetrating the crime.

The Nigerian consumers are now accustomed to lamentations by the regulatory authorities about the Chinese uncooperative stance in curbing the menace. For instance, the DG of SON disclosed recently that his agency met with Chinese manufacturing companies to plead with them to stop the production of substandard products for Nigerian markets and that the response they got from the Chinese industrialists was that they produce according to their Nigerian customers’ specifications. Though there have been reports of arrests, seizures and destruction of substandard and counterfeit products by the Nigerian regulatory authorities, no effort is being made to trace the factories where such products are produced let alone compel the seemingly reluctant Chinese authorities to take action against them.

The boom in the production and export of fake and counterfeit products has contributed significantly to the economic growth of China. According to the International Counterfeiting Coalition, the total value of counterfeit goods originating in China is estimated to be $1.22 billion annually. China is now a leading player in the global economy with a national economy bigger than that of Japan or the European Union countries combined. Within a few decades, the country was able to lift about 300 million of her citizens out of the poverty threshold, a feat without any precedence in the annals of economic development. While the Chinese wealth is growing by leaps and bounds, partly as a result of this unwholesome business, Nigerians have continued to wallow in abject poverty.

If Nigeria fails to curb the influx of fake, adulterated and counterfeit products from China and other countries, any dream of building a strong economy and reducing drastically the unemployment and poverty rates will remain only a pipe dream. It is a known fact that counterfeit products not only destroys the reputation of brands, they also send companies to their early graves. It would be recalled that many local industries in Nigeria have been forced to shut down their operations with all the attendant loss of jobs and revenue to government and the rise in the rate of crime, all on account of unfair competition posed by fake products dumped in the country and highly patronized by Nigerians.

Today, the likes of Dunlop and Michelin tyre manufacturing companies, Bata (shoe manufacturing company), Berec Batteries, many food processing, vehicle assembly, and textile manufacturing companies, which provided jobs for millions of Nigerians in the past, have become history. Nigeria now depends largely on importation of consumer products because her industries have been destroyed by the availability of fake and counterfeit products.

The influx of fake and counterfeit products also has health implications. Fake medicines, food products, toys, vehicle spare parts, electronic and electrical products are particularly ruinous; they are sold without the health and safety protection that the consumer laws of the country guarantee on genuine products. Many lives have been lost due to consumption of fake products, particularly medicines. Road accidents attributed to the use of substandard tyres have claimed many lives. Fake electrical products such as cables have also been connected with fire outbreaks that claim lives and properties. Some fake cosmetics have been found to contain lethal ingredients that cause bodily or organ damage.

Experts have urged the Nigerian government to rid the country of fake, substandard and counterfeit products from China for her economy to experience real growth. Government must also ensure that drastic actions are taken against the Chinese counterfeiters and their Nigerian collaborators to stem the tide. Most importantly, the regulatory agencies at the nation’s various borders – land, sea, and air – should be held responsible for the influx of substandard and counterfeit products in the Nigerian market. It is not just enough to raid markets and seize goods from traders while those saddled with the responsibility of preventing such goods to enter the country are still enjoying salaries and promotions in their various agencies.

There are also views that research efforts should be intensified to develop cheaper alternatives to the expensive products as an incentive for people to shun the fake ones. Government has also been enjoined to create an enabling environment for the growth of entrepreneurship as all these will help to make genuine products available and affordable for Nigerian consumers. It is imperative for the regulatory agencies to intensify consumer education and awareness on the issue.

Nigerian importers are urged to desist from importing fake and adulterated products into the country thereby causing havoc to the country’s economy. They should be concerned about the quality of the products they are importing and not just the profit alone. Carrying out product inspection or laboratory testing of products is advised before shipping.

However, the consumers have a vital role to play in the task of ridding the country of fake and counterfeit products and preserving their health as the illicit business is fueled by patronage. They should understand that fake consumer items in the market have not been subjected to absolute scrutiny for consumer safety. If an item is offered at a small fraction of the original price, it is reasonable to suspect it to be a fake or counterfeit. And if one is attracted to purchase such product despite knowing it to be fake just because it is cheap, there is a higher price to pay—killing of the productive sector of the Nigerian economy, leading to higher poverty and unemployment rates and increase in the crime level. Consumers should be guided by the age-old advice of “Buyer Beware” and shun counterfeit products.

 

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