Netherlands seeks trade, aid balance in Kenya ties

The Netherlands will not stop aid to Kenya beginning this year as earlier announced and would instead continue to pursue a gradual shift of focus to private sector investment as a vehicle to attain development goals, its embassy in Nairobi says.

In September 2016, then Dutch minister for Foreign Trade and Development Co-operation Lilliane Ploumen told the country's parliament that Kenya would not receive bilateral financial assistance from the European nation beginning 2020 as a result of “significant” economic growth.

The Netherlands has traditionally provided direct aid to support food security programmes, governance and human rights, improvement of the business climate, environmental conservation, sanitation as well as culture and sports in Kenya.

“The government wants to focus when choosing new partners in the group of countries that our aid is most needed: the Least Developed Countries. ODA (overseas development aid) is most relevant in these countries and there it can make the biggest difference,” Ms Ploumen, who has since been succeeded by Sigrid Kaag in the development co-operation docket, said.

Kenya’s GDP increased to $55.2 billion in 2013 after rebasing from $44.1 billion, a 25.3 per cent jump, surpassing the government’s prediction of 20.6 per cent.

The statistical reassessment of the economy pushed Kenya into the club of middle-income countries — prompting the review of relations by Netherlands, Ms Ploumen told the Business Daily in an earlier interview.

While the Embassy of the Netherlands in Kenya confirmed Monday that the country has since 2014 been pursuing an "Aid to Trade' agenda in Kenya, it said it will continue to support priority areas by combining aid and trade where possible.

“The centre-piece of the strategy is the twinning where possible of aid and trade. As Kenya has transitioned into a middle-income country, the Netherlands recognises the crucial role that trade and investment can play in social and economic development,” the embassy said in an emailed response to questions by the Business Daily.

“We recognise Kenya is a front-runner when it comes to facilitating the role of the private sector in development. Up to this day, the Netherlands therefore actively invests in private sector development and sustainable trade. And the Netherlands is well positioned to do so.”

As a result of the policy shift, the bilateral development cooperation portfolio continues to gradually decline, with figures provided by the embassy indicating that in 2019, it spent about Sh1 billion (9 million EUR) on bilateral aid compared to Sh1.7 billion (15 million EUR in 2016).

In addition, the Netherlands spent an additional Sh7.8 billion (70 million EUR) in development cooperation in Kenya in 2019.

The European nation continues to partner with Kenya to, among others, improve food security and integrated water management.

"We aim to work with Kenyan partners to improve agriculture value chains, climate-smart approaches and access to safe drinking water," the embassy said.

"The Netherlands also partners with Kenya in the area of peace and security. We support the Judiciary, aim to provide humanitarian assistance where necessary and work with Kenyan partners to tackle security challenges such as preventing and countering violent extremism."

The Netherlands is also seeking to partner with Kenya in social programmes, including health and women’s rights.

"The Netherlands partners with Kenya to co-create pioneering solutions to global challenges,” said the Netherlands Ambassador to Kenya, Frans Makken. “We aim to find cutting-edge solutions and bring together the public and private sector to achieve positive results, for instance, in the field of health.”

In terms of trade, the Netherlands has been Kenya’s largest export market in Europe for the last five years and among top five globally. It is one of the few economies in Europe with a trade balance in favour of Kenya.

According to figures provided by the embassy, in 2018, the Netherlands was the leading destination for Kenyan exports in Europe and the fourth globally. The value of the Kenyan exports to the Netherlands, mainly flowers, vegetables and fruits, stood at Sh46.4 billion in 2018 up from Sh43.9 billion in 2017.

On the other hand, the value of the Kenyan imports from Netherlands has stood at about Sh18.8 billion since 2014 except for a drop in 2016 when they were valued at Sh16.5 billion. In 2018, Kenyan imports from the Netherlands, mostly refined petroleum, aircraft parts, industrial food preparation machinery, polyacetals, were valued at Sh 19.4 billion, nearly the same as the Sh19.5 billion imported in 2017.

"Like Kenya, the Netherlands is inventive. The Netherlands aims to find out-of-the-box, yet pragmatic solutions for global challenges. Also in Kenya, the Netherlands seeks win-win-win, multidisciplinary collaboration,” said the embassy.

“Together with Kenya, the Netherlands co-creates pioneering solutions to global challenges. We can only tackle the global challenges together, by collaborating between Kenyan and Dutch public, private and civil society actors. The future engagement with Kenya will thus be innovative."

It cited the Sustainable Development Goals (SDGs) Partnership Platform established in 2017 as one of the avenues of cooperation between the two countries. The platform, set up with the support of the UN Resident Coordinator, the Netherlands government and private sector partners such as Royal Philips, brings together public, private and civil society actors to catalyse investments and innovations to achieve the SDGs.

"These partnerships will not only advance health and well-being within Kenya but also create numerous new jobs and education and entrepreneurial opportunities within the communities. The partnership is also a good example of innovative and multi-stakeholder cooperation between Kenya and the Netherlands," said the Dutch Embassy.