Security printing in East Africa is expected to enjoy a healthy growth in the medium and long term as the region enjoys a population and an economic boom that has created demand for millions of new official documents and production of new banknotes.

Demand for security inks is expected to be high as governments in the region scale up the issuance of passports, identity cards, birth certificates, tax stamps, security labels and product marking.

In addition, counterfeiting is rampant in East Africa just as in many other regions in Africa. The vice has led to a range of fraudulent documents, from fake currency notes and fake academic certificates and identification documents, which continue to pose a major regional security threat, disruption of government operations and a threat to genuine business operations.

South Africa-based Spoor and Fisher Jersey, a firm that handles the filing, registration, prosecution and enforcement of trademarks, patents, designs and copyright, says counterfeit pharmaceuticals in Africa is 30% to 60%, and that in Kenya, up to 80% of malaria drugs are fake.

“In Africa there seemingly is no limits when it comes to counterfeit goods,” said Chris Walters, director and head of litigation at Spoor & Fisher in an article on the company’s website.

Confederation of Tanzania Industries has previously been quoted as saying at least 50% of the goods consumed in the East African country are counterfeit.

“The East Africa region alone loses some $500 million in tax revenues annually because of counterfeiting,” said Walters.

Kenya’s Security Printing Market

Kenya’s security printing market is a microcosm of the trend in East Africa, with the demand for banknotes and official documents expected to drive growth patterns of the various security inks in the market such as invisible, thermochromic, solvent sensitive, optically variable, magnetic, biometric, fugitive and secondary fluorescing.

Banknotes and tax stamps are at the top of the list of products available in Kenya’s security printing market. The country has recently announced a major currency printing agreement and also launched a new generation tax stamp to boost revenue collection, seal revenue leakages and address counterfeit trade.

In the last quarter of 2016, Kenya Revenue Authority (KRA) launched a new generation tax stamp that enables distributors, retailers and consumers to verify authenticity of cigarettes, wines and spirits by use of an application on a smartphone.

“The verification of the new excise stamps using a smartphone app will further enable consumers to verify that the products are genuine, hence guaranteeing their safety,” said Benson Korongo, KRA commissioner for domestic taxes.

The tax stamps, which are supplied by KRA to all manufacturers and importers of cigarettes, wines and spirits for affixing on the products, have a quick response code used to verify authenticity of these products. The stamps are affixed on the tearing joint of all bottles or containers of cigarettes, wines and spirits.

KRA says the tax stamps are serially numbered, bear an ultraviolet working KRA logo and are distinguished to denote packaging sizes or products.

Kenya is also a signatory to the World Health Organisation Framework Convention on Tobacco Control that was adopted at the 56th World Health Assembly in May 2003, and whose implementation is expected to substantially increase growth of tax stamps.

However, Zachary Mwangi, Kenya Bureau of Statistics director general, says production of tobacco and cigarettes products dropped by 16.2% and 16.4% respectively in 2016, while production of other manufactured tobacco products went down by 2.2%.

Apart from tax stamps, the production of long lasting currency notes in Kenya is also expected to drive up demand for security printing inks in the long term.

In the last quarter of 2016, De La Rue, the world’s largest commercial designer and printer of banknotes, signed an agreement with Kenya for a joint venture facility for banknote and security printing.

Kenya acquired a 40% stake in De La Rue’s wholly owned subsidiary De La Rue Kenya EPZ Ltd for $6.5 million.

De La Rue CEO Martin Sutherland said at the time that the deal with Kenya reaffirms the company’s position “as a supply hub of currency and security solutions for the largest economy in East Africa and region.”

De La Rue designs, manufactures and delivers banknotes, banknote substrates and security features. The company says it is also a fully integrated supplier of both paper and polymer banknotes and “creates security features that ensure banknotes are protected against counterfeiting.”

Kenya’s market for both tamper evident inks and instant verification inks will also be driven by the increasing demand for official documents such as passports, identity cards and various types of certificates.

The Department of Registrar of Persons currently processes an average of 100,000 identity cards monthly, which at times rises to 350,000 at peak periods, such as in 2017 when the country will have presidential and parliamentary elections. For the entire 2014, at least 740,000 of the IDs were processed, according to the Kenya Bureau of Statistics.

The bureau says in 2014 an estimated 180,223 passports were issued even as concerns grew of circulation of fraudulent travel documents that enabled people linked to the Al Shabaab militant group from neighboring areas to enter the country and execute major attacks, such as the one at the upscale Westgate shopping mall in the capital city of Nairobi that led to the killing of more than 67 people.

An estimated 53,614 new work permits, with security markings, were issued to foreigners applying to work in Kenya between 2011 and 2014, while 51,981 were renewed by stamping them with indelible ink for the same period.

Printing of examination papers and academic certificates is a major security ink consuming segment and is expected to expand annually. Last year an estimated 937,467 pupils sat for the Kenya Certificate of Primary Education, the final primary level education examination, while another 525,800 did their Kenya Certificate of Secondary Education, the final secondary school education level examination. The number was higher than all the previous years and provided an opportunity for an increase in the number of certificates printed under a contract awarded by the Kenya National Examination Council (KNEC). The certificates have unique features made possible by the use of security printing ink. The council could not disclose the identity of the certificates’ printer to safeguard the credibility of the documents.

In late 2016, hundreds of fake examination papers were in circulation and gullible examination candidates were duped into believing they were genuine until the examination council said the process of printing of the examination papers is not replicable.
“KNEC carried out a thorough scrutiny and confirmed that the papers that were doing the rounds were not the genuine exam papers,” said Prof. George Magoha, KNEC chairman.

“The fake papers didn’t have the slightest likeness to what we have set and printed. The security features of the ongoing examination are imitation-proof, high level and so sophisticated for anyone to copy,” he said.

The security printing ink has also become a crucial tool in the fight against fakes in Kenya’s agriculture sector. Seed manufacturers are currently implementing an anti-counterfeit technique to lock out fake planting material though use of coin reactive ink.

The ink on the seed packaging is visible only when rubbed to reveal a hidden code. The farmer then sends the code to the seed manufacturer through a short text message from a mobile phone to confirm authenticity of the seed. The technique has been developed with support of the Kenya Plant health inspectorate Service, a state-run agency that assures the quality of agricultural inputs and produce.

With the various applications for inks in the Kenyan market, printing processes such as intaglio, letterpress, inkjet, offset, flexography, gravure and silkscreen are said to be used by various printers, although information on the market share of each of these applications is scanty.

Government agencies also want to protect the authenticity of products such as visas, holographic labels, vouchers, various tickets and vehicle licences. The printing of ballot papers for the presidential and parliamentary election in August 2017 is also likely to generate demand for security printing inks, although the country has always preferred foreign-based international printers to supply the voting materials.

Across Africa, the security printing market is likely to grow at rate of 9.6% according to a report, “The Future of Global Security Printing Markets to 2020,” by Smithers Pira.

“The fastest expanding regional market for security printing is Africa,” says the report.

The report says the main drivers for the 9.6% growth, which is much faster than the overall market rate, include population growth and increased mobility of people across the continent that fuels high expenditure by state agencies on issuance of identity documents.

“The improvement of the financial infrastructure across the continent will also fuel a need for products protected by security print features,” it added.