According to the East African Business Council, the prevalence of counterfeit and pirated goods is costing East African governments more than $500 million per year in tax revenues. An even greater effect on the economies of the countries concerned is caused by the erosion of profits of legitimate businesses, causing a significant disincentive to investment in product development and reduction in employment opportunities.
Counterfeit products commonly found for sale in East African countries include dry cell batteries, alcoholic beverages, fruit juices, shoe polish, toothpastes, footwear, toothbrushes, soap, detergents, ball point pens, books, electrical and electronic items, perfumes, clothing, footwear, cosmetics, pharmaceuticals, automotive spare parts, sound recordings, video recordings, computer software and computer hardware.
In addition to the direct losses to government revenue and to legitimate businesses, there are significant indirect losses which are born by the region as a whole. The lack of respect for intellectual property rights acts as a disincentive for foreign companies to transfer technology to East Africa, thereby slowing economic growth. Further, the people suffer the adverse consequences of products which fail to meet applicable safety and quality standards.