Counterfeiting is a significant problem in Ethiopia, especially for electronics and printer cartridges. While regulators have made some seizures of counterfeit goods, they acknowledge that counterfeiting is more widespread than their enforcement actions suggest. Counterfeit goods hurt businesses and individuals, as the fake products function poorly and damage equipment. It also discourages foreign investment and threatens Ethiopia's exports. Regulators are working to strengthen laws against counterfeiting and improve cooperation between agencies to better identify and prosecute counterfeiters.

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Counterfeiting: a Challenge Not Recognized
Why Counterfeiting is Thriving in Ethiopia – and What’s
Being Done to Stop It
Though counterfeiting isn’t a new phenomenon,
it’s one that’s witnessed increased activity in
Ethiopia, especially regarding tech products like
cell phones and printer cartridges. Some argue
that regulators should do more in order to better
assess which goods are counterfeited and pros-
ecute those who make those products. EBR staff
writer Yoseph Mekonnen explores how the gov-
ernment is beefing up its regulatory apparatus to
tackle this issue more effectively.

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A
couple of months ago, the joint inspection team
of the Ministry of Trade (MoT) and Ethiopian
Revenue and Customs Authority (ERCA) seized
emptycartonsofprintercartridges,aswellastags
and logos of famous international textile brands at one of their
inspection posts. Some of the seized items were imported to
Ethiopia for the purpose of being sold as counterfeited goods.
According to the World Customs Organization, the interna-
tional sales of counterfeited goods comprise a USD600 billion
industry, representing between 5-7Pct of total world trade. Re-
searchrevealsthattheshareofthesecounterfeitcommoditiesin
the market is disproportionately high in developing countries.
Thoughthisresearchshowsthereisahighlevelofcounterfeiting
in developing countries like Ethiopia, the Import and Export
GoodsQualityControlattheMoThasonlymadethreecaptures
in the past year related to counterfeiting. The unit is responsible
for controlling the quality of exported and imported goods as
wellasprohibitingtheimportationandexportationofgoodsthat
do not comply with mandatory Ethiopian standards.
Still,itisn’tuncommontofindcounterfeitgoodsthroughout
the country. Tizta Shire, who works as a typist in a secretarial
andphotocopyingcompany,sayssheseesthemoften. Shecom-
plainshowitisdifficulttogetoriginalcartridgesforherprinters
because of the counterfeited products that have swarmed the
market. “We have been suffering for a long time [due to] coun-
terfeited products,” she told EBR. She says that these cartridges
make machines dysfunctional, wasting time and money.
TheKazanchisareawhereTiztaworksisfamousforitsnum-
ber of stationary and computer accessories suppliers. Emebet
Mulu works as a saleswoman at Yared Tesfaye Stationary and
Computer Accessories. She explains the reason of the problem
that usually happens for people like Tizta. “There are two kinds
of products in the market called ‘first rate’ and ‘second rate.’ If
you buy the ‘first rate’ product at a much higher price than the
‘second rate’ one, you can use it for a longer period of time, but
if you buy the ‘second rate’ product at a cheaper price, it won’t
serve you for more than a couple of days,” she says.
Emebet herself used to sell these so-called ‘first’ and ‘sec-
ond’ products for 2,500 and 850 birr, respectively. The case is
analogous in other areas of business as well, and it is a common
practice that businesses who sell different electronics and other
productsoffertheircustomerswiththefirstandthesecondrate
products.
But people who have a better understanding of the matter
explain the trick of the ‘first’ and ‘second’ products dichotomy.
“No factory has a ‘second’ product,” says Michael Gebreselasie,
amangerforaprintercartridgemanufacturingcompanycalled
Cartridge World. “It’s known that these product called ‘second’
products are counterfeited products with low standards.”
Though it is difficult to locate the producers of the coun-
terfeited products abroad, many of the companies that import
these illegal products are large companies that have permission
to import goods.
Manyblamethegovernment’sprice-basedprocurementsys-
temasoneofthefactorscontributingtothegrowthofthecoun-
terfeitingbusiness.Sincegovernmentisthebiggestpurchaserof
goods and services in the country, its strict selection of original
productscoulddiscouragetheexpansionofcounterfeitedprod-
ucts. “The counterfeited products which are named as the ‘sec-
ond’ products are cheaper than the original one,” says Michael.
Thishasencouragedsomepeopletobeengagedintheproduction
and transferring of counterfeited products, according to him.
Beyonditsbadeffectsonindividualsandbusinessestheneg-
ative impact of counterfeiting has been mentioned as a major
obstacle for big international companies reticence to invest in
Ethiopia. In EBR’s February 2014 issue, Jussi Hinkkanen, vice
presidentforcorporaterelationsatNokia,MiddleEastandAfrica
said that “the [Ethiopian] market is flooded by counterfeited
devices that imitate the legitimate devices, but have been man-
ufactured in small illegal and unregulated factories in China.”
Moreover, counterfeited products have posed a big threat to
thecountry’sexportsaswell.Inaconsultativemeetingthattook
place on July 4, 2014 at Hilton Hotel, organized by the Addis
Ababa Chamber of Commerce, Ethiopian Development Re-
search Institute, shoe manufacturers communicated that local
counterfeited shoe producers have been using the design and
brandsoffamousEthiopianshoeproductsandhavebeenselling
them in Kenya.
A publication by the Addis Ababa Chamber of Commerce
quotedthedeputygeneralManagerofWalliaLeatherandLeath-
er products PLC, Yared Alemayehu, as saying the counterfeited
products penetrating into Kenya’s market will hurt his market
if there’s no solution to the problem.
Itisnotonlythedamagethatresultsfromcounterfeitedprod-
ucts such as electronics that is a challenge; it also affects phar-
maceuticals. According to Berhanu Adello, Director General of
the Ethiopian Intellectual Property Office (EIPO), more than
100,000 peopledie annually worldwide asa resultofcounterfeit
malaria and TB medications.
Regulatorygovernmentbodiesassociatedwiththeissue,like
the MoT, ERCA and EIPO have not conducted any research or
sampling to demonstrate how deep this problem is in Ethiopia,
if it exists at all.
Oneofthemechanismstopreventcounterfeitingistheregis-
teringoftrademarks,whichisarecentphenomenoninEthiopia.
“Theproperregisteringofbrandswasstartedjustfewyearsback.
Thelong-livedtrendinthecountrywasdepositingthemwithout
strict control,” said Berhanu.
AccordingBerhanu,thetaskofhisofficeisregisteringtrade-
marks and notifying various regulatory bodies like the ERCA.
However, the ERCA states that the trademarks lack the detailed
information necessary to enable the detection of counterfeited

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products.
“People who claim to get trademarks registered through the
EIPOusuallycometoourofficewithasinglepaper,butweneed
more details – like photographs, colour and other criteria,” says
AhmedYasin,DeputyDirectorofValuationandTariffClassifi-
cationatERCA.“Unlessweareprovidedwiththosedetails,how
can we identify whether a product is counterfeited or original?”
The EIPO, however, claims that it provides the ERCA with full
information about each trademark.
CurrentlyMoTtestsmorethan58commoditiesbasedon126
standardssetbytheEthiopianStandardsAgencyanditstrongly
stresses the need for strong anti-counterfeit law. “Currently the
country doesn’t have strong laws against counterfeiting,’’ says
TamiruGeno,ImportExportGoodsQualityControlDirectorat
MoT.“Thishasmadetheworkdifficultandnowwehavestarted
asking importers for authorization letters from manufacturers
to identify counterfeited products from original products.”
The Ethiopian Trade Practice and Consumers Protection
Authority’s (ETPCPA) Proclamation stresses that counterfeit-
ing and piracy of patents are punishable by law. “Recently our
court ruled a case related to counterfeiting between two mobile
manufacturers in the country,” said Sentayehu Girma, Public
RelationscoordinatorattheETPCPA.“Anyonewhohasanissue
on the matter can bring the issue to this special court. Since the
issue is something that can paralyze innovation and fair trade
practices, we deal with the issue seriously. ”
Though the issue of counterfeiting is a serious issue in Ethi-
opia, it is difficult to ascertain the magnitude of the problem in
thecountry.Forinstance,developingcountrieslikeKenyahave
their own independent agencies dealing with counterfeiting in
order to assess how widespread the issue is within the country.
Some say that Ethiopia is taking
steps to better grasp the magnitude
of counterfeiting in the country and
tackle it more effectively. “We have set
136 standards for products that cir-
culate in the country’s market,” says
Legesse Gebre, Standards Director at
theEthiopianStandardsAgency.“Since
counterfeited products are always be-
lowthestandard,itispossibletoscreen
outcounterfeitedproductsifthestand-
ards are enforced properly.”
An expert who spoke to EBR on the
condition of anonymity has a different
opinion on the matter; he thinks that
the government’s reluctance to better
regulate counterfeited items might be
a deliberate move. According to the
expert, big international companies
that produce sophisticated and timely technological products
targetonlypeoplewithahigherincome,astheresulttechnology
penetration in developing countries becomes low.
“Look, who would have a smartphone or satellite dish in
this country, except for the few, if there were no counterfeited
products in the market?” says the expert. “If the government
stronglyfoughtthecounterfeitingbusinessIamsurethedigital
penetration in the country would be less than it is now.”
What the expert recommends is that big international com-
panies or their agents in Ethiopia have to start targeting the
low-income segment of society so that they can come up with
fair price. “Unless they are willing to do this, they are opening
the door wide open for counterfeited products,” he adds.
Many merchants contacted by EBR think that the so-called
the ‘second rate’ of any product is something normal and legal.
They are not ashamed to offer someone who goes to their shop
both options.
Nevertheless, some companies are trying to take measures
to fight counterfeiting. A few months ago in the shop where
Emebet works, someone could be offered both the ‘first’ and
‘second’ products of a printer cartridge, but now the local HP
cartridge importer and distributer has warned them not to do
so. Emebet has since stopped selling them, though she admits
she doesn’t understand the reasoning.
The EIPO believes that lack of awareness is the main reason
forcounterfeitinginthemarketandithaslaunchedanacademy
to enlighten people about the matter. The director of the EIPO
hopes that as time goes by, it can increase the intake capacity
of the academy so that it can reach a wider public across the
country. EBR
0
500
1,000
1,500
2,000
2004/05 2006/07 2008/09 2010/11 2012/13 2013/14
Source: EIPO
Compilation and Illustration by EBR Economic Research and Intelligence Unit
Number of Registred trademarks.