Netherlands – Africa: Lessons and Opportunities for Inclusive Growth

max_photo1Impact Amplifier’s, Max Pichulik, was recently invited to participate in the Dutch Visitors Programme. The programme is a two week ‘soft diplomacy’ trade initiative hosted in Netherlands by the Dutch Foreign Affairs Office.

Nine participants across eight developing countries were chosen to deeply understand the Netherlands’ approach to SME development and Inclusive Growth, both locally and internationally.

As the only African delegate, Max Pichulik brought a range of lessons and opportunities for the continent. The key takeaways include:

  1. Dutch Aid is shifting to trade and private sector development in Africa – The Netherlands approach to development is politically and operationally shifting away from Aid, and transitioning towards investing capital and capacity into inclusive SMEs in Africa. The Dutch Good Growth Fund proposed for 2014 is an example of this shift, and speaks loudly for Holland’s private sector approach, which includes social and environmental impact metrics.    
  2. Dutch Technological capability and market access into Europe is the focus – Agricultural technology, water, sanitation and renewable energy are key sectors in which the Dutch believe they could play a meaningful role in Africa’s development. Joint venture opportunities between Dutch and African SMEs drive this focus.
  3. The Dutch are large traders in Agricultural goods – The Dutch have an important role to play in Africa’s co-operative and small holder farmers growth, linking them into international agricultural value chains. By understanding the scale of their ports (particularly Rotterdam and Amsterdam) and logistical infrastructure supporting the flow of agricultural products into Europe, the significance of their role for Africa’s sustainable growth is clear.
  4. The key to Holland’s own success, is placing SMEs at the centre of their economic strategy – Ninety percent of Dutch GDP is generated by SMEs, primarily through the services sector. The lesson for Africa is how Dutch SMEs have organised themselves through a number of inter-related industry bodies (e.g. MKB), to ensure that SMEs are present at every trade negotiation. This is fundamental, especially in South Africa where ‘industry bodies’ largely represent big business to the detriment of smaller players. Over and above that, our various business chambers have not aligned sufficiently to support SMEs. As the President of MKB, an umbrella organisation for SME organisations, Michael Van Straalen said to the group, “If SMEs are not present at the table for dinner, how can they expect to eat?”
  5. Impact Investing is exploding – There were meetings with a series Development Finance Providers, Foundations, Asset Managers and newly established Impact Investment Funds. The message is clear. Impact Investing is exploding but is the South African ecosystem ready to participate?

Click here for a photo album link to the DVP programme.