In Summary
  • Report shows corrupt Anti-Counterfeit Authority staff are aiding forgers to commit fraud.

Taxpayers are losing Sh8 billion annually to trade in counterfeit goods as manufacturers grapple with half the same amount in losses, a performance audit by the office of former Auditor-General Edward Ouko has shown.

"China is the largest exporter of counterfeits to Kenya, with goods such as electronics for instance phones, sound equipment, cables as well as automobile spare parts and clothing," the newly released report says.

ROGUE STAFF

Mr Ouko’s latest assessment on performance of government agencies also revealed that corrupt staff at the Anti-Counterfeit Agency (ACA) are aiding forgers in defrauding both manufacturers and taxpayers.

"A documentary review revealed that 13 staff have faced disciplinary cases in line with matters bordering on corruption and harassment of traders. Additionally, the staff were suspected to have leaked confidential information to unauthorised persons. Five of those staff faced disciplinary action but were later exonerated due to anomalies in the disciplinary procedures," Mr Ouko says.

In interviews with ACA staff, the audit found that many suspected counterfeiters had opted to compromise ACA inspectors or judicial officers rather than pay hefty fines.

In one instance, ACA officials had released counterfeit goods estimated at Sh25 million back to the suspect even though they were meant to be destroyed.

In yet another case, Mr Ouko's audit team found that ACA staff in Kisumu had used un-serialised inventory forms during raids and seizures.

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