No phone factory for Nigeria except counterfeiting is tackled, says Nokia VP

Ben Uzor Jr
If Nigeria does not put proper Intellectual Property (IP) protection controls in place there will be no investment in that area of establishing a phone factory here, Jussi Hinkkanen, vice president, government relations, Middle East and Africa for Nokia Corporation has said.
Hinkkanen added that government needs to realise that "for us to have new income sources for the national economy, we need to have IP protection in place otherwise they would certainly be no investment from the international phone manufacturers."
He lamented that the issue was creating an impediment inspite of Nigeria's enormous mobile phone market. He observed that the counterfeit market currently constitutes over 18 percent of the country's mobile handset business. "The reality on ground is that if the country does not have proper Intellectual Property (IP) protection in place there would be no investment in that area of establishing a phone factory. I think this is a strong message to the government. The government needs to realise that for us to have new income sources for the national economy, we need to have IP protection in place otherwise they would certainly be no investment from the international phone manufacturers."
The Nokia VP made these disclosures in Lagos while speaking exclusively to Business Day recently. According to him, counterfeiting discourages foreign investment as prospective financiers may be apprehensive that their investment could be negated by competing counterfeiting activity. But more importantly, Hinkkanen pointed out, counterfeit products are not only potentially detrimental to consumers, but also have a negative impact on supporting local innovation.
Alluding to the downbeat impact of counterfeiting on Research and Development (R&D) which firms are discouraged from embarking on, he noted that legitimate manufacturers and intellectual property owners suffer from trade mark patent and copyright infringement and loss of goodwill, further adding that government loses huge revenue in form of taxes from the actions of counterfeiters.
"What we see very much is the impact on national economy. So basically, what happens now is the Nigerian government itself is losing significant tax income with these counterfeit products. The reason for that is that these businesses are illegal. All of these traders are illegal traders who import these devices without paying any taxes. So, the tax impact is quite serious."
Hinkkanen stated: "Another important one is basically the use of these devices in occurrences or in interventions which affect national safety. So, we see as an example currently from Egypt which a few weeks ago basically blocked all the counterfeit devices off the national operating network. This is because they cannot be recognised by the operating network, technically.
"Each of these legal devices carries an ID number called an IMEEI code and many of these fake devices do not carry one. So, they are invisible to the network when you make a call and can be used for terrorist activities. The Egyptian government blocked these devices from the network as did the Indian government as well four months ago in November of 2009. They blocked 20 million phones over night."
Commenting on what strategies the company was putting in place to tackle the menace, he added: "We are working currently on two major fronts. We are supporting the different public institutions in building capacities in finding counterfeit products and supporting them in enforcement. So, we provide them the technical assistance required to carry out their enforcement. Secondly, we have been raising the awareness of government about the potential problems relating to counterfeit business."