by Chuba Ezekwesili

What’s the lesson? Never take things on face value. Every transaction has unintended consequences: good and bad. In developing countries like Nigeria, these goods have more value than can be estimated.

Nikee, Mike, Nikke, Niike, Abidas, Abidas, Ray Bon, Roy Bon…if you can’t see the connection here, then you really need to go the local market. Going to the market gives me the chance to chuckle at how many random things can be branded and counterfeited. It also got me wondering what the holistic economic effect of counterfeits are on the buyers, sellers, and the whole economy.

Right off the bat, I’ll make it clear that contrary to popular beliefs, counterfeits positively affects every party. And to an extent, negatively affects some parties: counterfeits steal the market of original products and portray their products as inferior. However, against all odds, counterfeiting and piracy not only help the brand owners, they have a positive effect on economic growth.

Let’s start with the benefits it has for the consumers. First, it offers a market to consumers that would otherwise be absent. Consumers unable to afford the ‘real deal’ can afford ‘next to the real deal’. The girls at the Silverbird Cinemas get their utility from clutching their (fake and real) Louis Vuitton handbags. The sellers get their money and the real brands get their publicity. Everyone’s a winner.

The Knockoff Economy by Kal Raustiala And Chris Sprigman has this to say on counterfeiting: “Copying brands—what is called counterfeiting—is illegal, and usually for good reason. But even the copying of brands can have some positive effects. Copying may serve as advertising for brands — advertising that is not only free but arguably more powerful because it stems from the authentic actions of consumers rather than the carefully-produced efforts of producers.”

Piracy – the digital version of counterfeiting is certainly on the rise in Nigeria given our improving internet facilities. Let’s break down piracy into software and music piracy. Crank open the laptop of a random Nigerian and you’ll most likely see a fake copy of Microsoft Word, Windows XP/7/8 or some Adobe Software. Opponents of piracy argue that it reduces the revenue of companies that make these software, so essentially, have a net negative effect and no positive effect. But when we take a more analytical and frankly unorthodox look at it, it becomes clear that piracy also has a positive effect on the sales and market of the pirated product, as well as on Small Business Enterprises in places like Nigeria. The average startup in Nigeria finds it financially tasking to buy enterprise versions of software.

Let’s be clear, most of these copies do not translate to lost sales. Someone unable to purchase these software cannot be seen as a potential consumer. Instead, this decreases the cost of entrance into a business for enterprising individuals. In the eventuality that these businesses take off, pirated software get replaced by official softwares. So everyone eventually benefits: individuals, businesses, the economy and even the software companies.

What’s the lesson? Never take things on face value. Every transaction has unintended consequences: good and bad. In developing countries like Nigeria, these goods have more value than can be estimated.

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Chuba Ezekwesili is a graduate of Economics & Political Science from Claremont Mckenna College. He currently works for the Civil Society Legislative Center (CISLAC). He enjoys reading up on matters pertaining to Economics and is also an avid technology geek with a belief that the intersection of both can create immense economic development. He tweets from @ceezeks.

Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.