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Fake goods cause huge economic losses

A FEW years ago the government of China set up a crack squad of inspectors that was detailed to keep an eye on the quality of all consumer goods that were designed for export.

This was a commendable move by the People’s Republic of China. The initiative was tailored to flush out substandard, counterfeit and fake items that were destined for Tanzania or other countries.

The move would also save Tanzanians and other consumers from the loses they suffer through purchases of offensive, substandard, counterfeit and fake goods.

It is imperative to point out here that the crackdown on producers of fake goods would also save the economies of nations that import the goods and help restore the dignity of the Chinese government.

The decision was announced before a group of Tanzanian journalists who were on a visit to China, by the Deputy Director General for the Department of West Asia and African Affairs in the Ministry of Commerce, Mr Cao Jiachang.

Mr Cao was bitter that unscrupulous Chinese manufacturers should collude with greedy business people from Tanzania or other parts of the world to flood their local markets with substandard imports that are badly fashioned or are dangerous to health.

He said that a competent team of inspectors will visit suspected manufacturers of substandard goods and blacklist offenders. “All factories that will be found guilty of the offence of manufacturing substandard, counterfeit and fake goods will be closed down immediately and their owners will be prosecuted.

“It is a pity that these greedy manufacturers flood foreign markets with very poor consumer goods. These people ruin the economies of importing countries such as Tanzania, impoverish consumers and even expose their health to untold risks,” Mr Cao said.

Highly dangerous imports from China include substandard or fake medicines, powder milk and electrical appliances that often start fires, to mention just a few.

Other fake goods come in the form of building materials, cosmetics, soaps, soft drinks, canned foods, motor vehicle or other spare parts, tyres, paints, toys, textiles, shoes and others. The list is hard to close.

Some substandard or fake goods are known to have caused deaths. Mr Cao said that proven Chinese culprits who export offensive and highly dangerous goods to unsuspecting customers overseas are likely to face heavy legal punishments.

It is these people who put the lives of people overseas at risk, hurt other nations’ economies and, in the same vein, tarnish the good image of China. They also, by extension, hurt Chinese economy by portraying a false picture that “Our export commodities are very bad.”

Mr Cao caused laughter when he said that when he was living and working in Egypt an angry group of protesters trooped to his office and caused quite a grim spectacle complaining that substandard, counterfeit and fake goods manufactured in China were impoverishing them and endangering their health.

He said that the protesters’ emotion-charged complaints hurt him and made him see the stink caused by ruthless Chinese exporters.

It is important, however, to point out here that Chinese manufacturers and exporters are not the only culprits in this escalating canker.

Counterfeit products also originate from India, the United Arab Emirates (Dubai), Indonesia, Taiwan, Singapore, Pakistan, Hong Kong, South Korea, Bahrain, Malaysia, Burma and Thailand. Chile, a South American country, also harbours notorious counterfeiters.

There are some African countries also in the list. They include Kenya, South Africa, Mozambique, Malawi, Zambia and rather surprisingly, Tanzania. Some products that are manufactured in Tanzania are imitated overseas.

Tanzanian high quality khangas, for example, have cheap copies coming in from India. In November, 2016, it came to light that two roofing sheet factories had, for some time, been producing and selling substandard products, much to the disadvantage of customers, who are not only cheated out of their money but also end up building cheap homes.

Tanzania Bureau of Standards (TBS), said it destroyed a total of 300 substandard bundles of roofing sheets early that month. At the premises of Teng Long Investment in the city of Dar es Salaam the bureau destroyed substandard roofing sheets imported from China.

TBS also closed down a number of roofing sheet factories including Unimetal and Sunshare in Temeke District for failure to meet the required standards.

The offensive roofing sheets were tested at the TBS laboratory in the city and found to be substandard. Some of the substandard sheets, according to TBS, had too little rust preventing paint, a situation that reduces their lifespan to less than ten years after being used in roofing.

The closed factories were ordered to remain out of business until they improve product quality. Indeed, the impact of substandard goods, invariably, hurts the economy occasioning dwindling state revenues.

The state, for example, loses between 540 and 900 billion shillings per year due to tax evasions that are related to counterfeit and substandard goods.

Counterfeit and substandard industrial products continue to flood the Tanzania’s domestic market. They continue to cause a revenue collection stink. Last year saw illegally manufactured, fake and substandard products increase from about 35 to 40 per cent.

A report prepared by the Confederation of Tanzania Industries (CTI) during the year says that Tanzania, like any other nation around the world, suffers enormously from the adverse effects of the flooding of counterfeit and substandard products.

Every year, starting in the year 2008 the government has been losing an estimated an average of four trillion shillings due to the prevalence of counterfeit goods in the domestic market.

According to a CTI report fake industrial equipment and raw materials generate a loss of 1,000bn/-; vehicle spare parts (800bn/-); agriculture inputs (600bn/-) and chemicals (400bn/-) almost every year.

More revenue is also lost due to the presence of fake pharmaceuticals (400bn/-); building materials (320bn/-); textiles and clothes (240bn/-); food and beverages (200bn/-) alcohol and drinking water (200bn/-). This brought the total loss to 3,160bn/-, but this is a mere tip of the iceberg, the CTI says

IT pays to be a swimmer and ...


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