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December 6, 2017

Volume 17 Issue 49

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Nigeria Loses $200M to Counterfeiting Per Year

ACCRA, Ghana – Stakeholders in the Nigerian lubricant market estimate it loses more than $200 million annually in potential sales revenue to counterfeit lubricants.

Tolulope Alabi, trade operator at OVH Energy Marketing, noted that the huge losses arising from counterfeiting stem from people circumventing due process. The potential impact of this is huge, especially on the reputation of the company whose products are being counterfeited and government revenue lost because counterfeiters don’t pay taxes, Alabi said at the ICIS Base Oils & Lubricants Conference in Ghana.

Taiye Williams, managing director for Lubcon International, stressed that the disparate approaches to tackling counterfeiting by the Lubricant Producers Association of Nigeria and the Major Oil Marketers Association of Nigeria have made the fight against counterfeiting challenging.

“We thought we had the [oil] majors on our side, but we realized that the effort we are making seems to be on the opposite side. If we are able to collaborate with the majors, we can win the war on counterfeiting in Nigeria,” said Taiye Williams.

Signed in late 2015, the Standards Organization of Nigeria Act of 2015 put more teeth in the government’s ability to crack down on substandard lubricants, empowering regulators to arrest and prosecute offenders. The original SON Act of 2004 – which applies to but isn’t limited to lubricant products – empowered the standards and regulatory agency to inspect products and to seize and destroy those not complying with national standards, but it did not authorize the agency to arrest offenders on the spot.

John Erinne, CEO for Matrix Petro-Chem in Lagos, Nigeria, noted that successful enforcement of existing regulation remains a daunting task in Nigeria.

“Everything goes to the fact that the regulation that should guide all aspects of the lubricant industry in Nigeria has failed. This is the biggest problem of counterfeiting in Nigeria,” said Erinne.

Alabi concurred that enforcement of regulation is poor, emphasizing it remains, at best, debatable whether such written laws have been successfully implemented. She contended that educating consumers on the dangers of counterfeited oils is the main solution to the rising incidence of counterfeiting in Nigeria’s lubricant market.

“We have to educate consumers. We have to engage with the key influencers such as auto mechanics, who make recommendations to consumers on which oils to use,” added Alabi.