The Netherlands became one of Ghana’s most important development partners benefiting from the Dutch government’s loans and grants for healthcare, education, the environment, gender advocacy, good governance, budget support, and technical assistance critical for Ghana’s economic growth.
Ghana’s impressive economic performance coupled with the transformation to a middle-income economy status, necessitated the Dutch government’s policy shift from aid to trade, with the two countries working together to achieve sustainable economic development for Ghana, while phasing out Official Development Aid (ODA).
This new Dutch policy is in line with the “Ghana Beyond Aid” Policy initiative of the Government of Ghana, and seeks to harness effectively, Ghana’s own resources to finance its development and economic growth, whilst minimising or eliminating the country’s reliance on ODA.
Ghana-Netherlands Trade/Implementation of the EPA
Ghana and Netherland trade is conducted within the framework of the Ghana-European Union Interim Economic Partnership Agreement (IEPA).
The Netherlands remains an important trading partner for Ghana within the EU. Trade between the two countries is relatively significant and stood at $1.37 million in 2019.
Cumulatively, trade between the two countries between 2010-2019 amounts to $17 billion with Ghana enjoying a balance of trade surplus since 2016.
Top exports from Ghana to Netherlands in 2019 are Cocoa Beans (37.6 per cent), Cocoa Butter (21.7 per cent), Crude Petroleum (14.8 per cent), Cocoa Paste (7.84 per cent), Cocoa Powder (5.68 per cent).
On the other hand, imports from the EU to Ghana in 2019 comprised of Poultry Meat (16.7 per cent), Refined Petroleum (12.5 per cent). Packaged Medicaments (10.6 per cent), Margarine (4.72 per cent), Excavation machinery (3.15 per cent).
The Netherland’s Investments in Ghana
Data from the Ghana Investment Promotion Authority (GIPC) shows significant amount of Dutch investment in Ghana since 1994.
In 2017, Foreign Direct Investments (FDIs) from Netherlands alone was $2.5 billion whiles cumulative FDIs from 1994 to 2017 totalled $4.177 billion.
The Investments comprising of 224 business enterprises and projects in various sectors, including both general and export trade, liaison, manufacturing, tourism, and other related services.
Ms. Martine Van Hoogstraten, Deputy Director, Sub-Sahara Africa Department, The Netherlands, said Ghana and the Netherlands had had a Bilateral Investment Treaty (BIT) enforced since 1st July 1991, and proposed a review of the BIT in line with the current national and global economic realities.
Ghana recorded favourable balance of trade from 2016 to 2019 with a trade surplus of $406 million dollars in 2018. This favourable position could be attributed to the increase in the export of Ghana’s Crude Oil to the Netherlands.
In 2019, Ghana recorded a positive trade balance of $734.8 million with estimated exports of $966.3 million to the Netherlands – a figure which decreased to $759.7 million in 2020.
Netherlands exports to Ghana increased from $231.5 million in 2019 to $876.5 million in 2020, recording a surplus of $116.8 million.
Ghana-Netherlands Development Cooperation
Development Cooperation between the two countries is mostly focused on technology, knowledge, market access and a strong position on the world market. The specific sectors are water, health, and agriculture.
In 2016, the Dutch government announced that its development budget for Ghana would be reduced in the next few years because the country is on an economic growth path to self-reliance. The Netherlands, since 2020, halted development aid to such five countries including Ghana.
Netherland’s support to Ghana also targets Private Sector development, trade, promotion, and investments.
The Netherlands continues to support innovative and sustainable initiatives to help farmers improve production methods and increase their access to markets, with further support to Ghana through various grants for the private sector.
Proposed Areas for Cooperation
As part of the Memorandum of Understanding (MoU) on the Ghana-Netherlands Political Cooperation, Support for Ghana’s Industrial transformation Agenda would be an area of focus to industrilise the country.
Ms Hoogstraten said Ghana would need Netherland’s support in the implementation of its Industrial Transformation Agenda through investment and technical support in the following areas: One-District One-Factory Initiative, Development of Strategic Anchor Industries, SME Development.
With the development of Small and Medium Enterprises, Ghana will be interested in promoting competitiveness of the Ghanaian Micro, Small and Medium Enterprises (MSMEs) through technology transfer.
Under the proposed areas of cooperation, support will be advanced to the Ghana Enterprises Agency to implement the MSME Policy to take advantage of the preferential markets under the African Continental Free Trade Area and the Ghana-EU EPA.
The Deputy Director, Sub-Sahara Africa Department, said the Cooperation would support the implementation of the Africa Continental Free Trade Agreement (AfCFTA), support for the National AfCFTA Coordination Office, support to implement the National AfCFTA Policy Framework and implementation plan as well as capacity building and training.
As part of the cooperation, an adoption of the Joint Business Council Model would promote and provide tailor-made solutions to Ghana and its bilateral partners.
It is proposed that special focus should be on attracting investment into critical Government’s industrial anchor industries while new financing and business models are introduced to enhance better participation by Dutch and Ghana private sector.
Aside that, Ghana will also seek Netherland’s support to accelerate its post-COVID-19 recovery under Government’s COVID-19 Alleviation and Revitalisation of Enterprises Support (CARES) Programme.
Also, Ms Hoogstraten said: “For the Netherlands, I would like to stress very importantly our membership of the EU; we work in the framework of the EU, and we want to play a significant role, making the EU stronger, greener, and safer. That is a way Ghana can work with us and that we can help the country in the framework of Ghana-EU relations.”
Signing of MoU
Ghana and the Netherlands have institutionalised Political Dialogue, to among other objectives, take stock of their cooperation to assess how it is mutually benefiting the two countries.
A Memorandum of Understanding (MoU) on Political Consultations has, therefore, been signed between the Ministry of Foreign Affairs of the Republic of Ghana and the Ministry of Foreign Affairs of the Kingdom of the Netherlands aimed to establish a mechanism for regular political consultations on bilateral, regional, and international issues of mutual interest.
The pact also aims to consolidate Ghana’s relations with the Netherlands with a view of enhancing several mutually beneficial partnerships and cooperation that positively impact its peoples and the two countries and also give both countries the opportunity to expand discussions on variety of issues and to address challenges that may exist.
The first edition of the Ghana-Netherlands Political Dialogue, convened with participants from the Foreign Ministries of the two countries as well as relevant national stakeholders of Ghanaian Ministries, Departments and Agencies and representatives of concerned institutions in the Netherlands, discuss issues of mutual interest in Defence and Security, Migration and Development, Trade and Investment, the benefits of the AfCFTA, Agriculture, Science and Technology as well as Environment and Climate Change and Human Rights.
The discussions also touched on issues relating to Education, Culture and Training as well as Cooperation within the United Nations (UN) System.
Ms Hoogstraten, before signing the MoU on behalf of Netherlands, said “I am very excited to hear that there is more room for Dutch investments in Ghana. This is something we are happy to know and a conversation worth having. We want to continue our good and long-standing bilateral relations.”
Mr Ramses Cleland, Chief Director, Ministry of Foreign Affairs and Regional Integration (MFARI) who signed the MoU on behalf of Ghana, in an earlier speech read on his behalf by Mrs Hannah Nyarko, Coordinating Director, Political and Economic, MFARI, said Ghana-Netherlands bilateral cooperation concentrated on sectors of mutual interest, selected based on the interest of the Dutch private sector and on relevance for the development of Ghana.
Within that framework, he said, the Dutch government selected sectors such as water, health, and agriculture, where Dutch companies had a lot to offer in terms of technology, knowledge, market access and a strong position on the world market.
Nonetheless, Mr Cleland said the Netherlands was shifting its development cooperation with Ghana from ”Aid” to trade and investment in line with the country’s programme of ”Ghana Beyond Aid” and stressed that “building a Ghana Beyond Aid was not a repudiation of aid.”
He said as Ghana pursued its “Ghana Beyond Aid” agenda, based on boosting trade, the country would like to continue to rely on the support of Netherlands for the implementation of Ghana’s flagship programmes for industrial transformation including the One-District One-Factory Initiative.
“Development of strategic anchor industries such as vehicle assembly, manufacturing of machinery and machine components, pharmaceuticals, textiles and garments, integrated aluminium industry, iron and steel, industrial chemicals, oil palm, industrial starch and downstream petrochemical industry,” he said should be prioritised.
He mentioned the Agenda 111 initiative which aims at creating 111 health facilities in Ghana to ensure that Ghanaians nationwide have access to quality healthcare services, as an initiative to be focused in the cooperation.
Ghana, the Chief Director of the MFARI, noted, saw the Netherlands as a very important country in Europe, with an excellent democratic credentials and a vibrant economy and that more companies from the Netherlands should be interested in trading and investing in Ghana.
“In fact, I am aware that there are already Dutch companies in the Tema enclave including Koudijs Animal Nutrition, which is into the production of animal feed,” he added.
Over the years, cooperation between Ghana and Netherlands have traversed different sectors, including trade and investment.
Ghana’s exports to, the Netherlands are primary and semi-finished goods, which include Cocoa beans, Cocoa butter, Cocoa paste, Crude Petroleum, Cocoa Powder, among others. Whereas imports from the Netherlands include Refined Petroleum, Poultry meat, Excavation Machinery and Packaged Medicaments, among others.
With Ghana and the Netherlands having maintained their diplomatic relations since 1701, which had enabled the two countries to develop a common history and interconnecting cultures, resulting in our shared values, it is hoped that the signing of the MoU on Political Consultations would further deepen the even stronger bilateral ties between the two countries for the ultimate development of Ghana.
By James Amoh Junior