Dutch Minister Van Ardenne: Business opportunities in Africa

'Let me start by giving you a few facts. Steady economic growth and more macro-economic stability. Fewer conflicts and coups and more democracy. A ten per cent rise in literacy among women since 1990 and growing freedom of the media. I am talking about Africa. Despite all the misery and the setbacks, many Africans far away from the cameras are working their way out of poverty through business. That is good news from Africa, and it should be told.

Good news from Africa, like an economic growth rate of more than five per cent in fifteen countries, is good news for businessmen in the Netherlands too. There is no need to target only the top layer of rich Africans. With innovative products and low prices, enterprises can also serve the poorest people.

And they can make a profit. Worldwide, companies could earn an additional 13 trillion dollars a year by catering for this group. And the poor would also benefit from a better, cheaper range of products and services. Eight hundred million people at the bottom of the pyramid live in Africa and they are waiting for you. African and Dutch enterprises can find common ground by working together to make a difference. It’s a perfect match. Reducing poverty and making a profit are often two sides of the same coin. That is the message of this event.

In Asia we saw how economic growth through liberalisation went hand in hand with poverty reduction. One per cent more economic growth meant one per cent less poverty. The Gang of Four – Hong Kong, Singapore, Taiwan and South Korea – set the trend. China followed with its Open Door Policy, then India. Since the Chinese leader Deng Xiaoping introduced his pro-market reforms in 1978, poverty levels have dropped from fifty per cent of the population to less than ten per cent. The door to Africa must be opened wider. It is up to the governments of African countries to do this. Africa cannot afford to miss the boat when it comes to globalisation. If it does, it will rapidly be left behind by other fast-growing economies. So the countries of Africa have to sort out their own internal market and work together – through the African Union for example – to make their continent attractive for business.

The door to Africa is open, though not very wide. But since when has that stopped entrepreneurs? Those who now have their foot in the door will have a first-mover advantage when markets really start to grow. The Ministry of Foreign Affairs also has an Open Door Policy. Right from the start, I have opened the doors wide to the business community and the banks. Because I am convinced that poverty reduction requires economic growth and investment in the private sector. And because I also believe that the Dutch and African business communities have an important part to play: as trade partners, investors and knowledge brokers. But it is up to companies themselves to take the step – to my Ministry, to an embassy in Africa and into Africa, with all its opportunities, and risks. Woman play a special role and I would especially like to encourage businesswomen to take this step. They particularly should profit from an Africa that has access to the global market. An Africa that plays a full part in globalisation. I hope that this event will help you – women and men alike – to take that step.
I have said enough now about gateways and open doors. Forget about metaphors: let's get down to business.

What is the Dutch government doing to develop the private sector in Africa?

My strategy has five elements.

First, a better business climate. Our embassies in our thirty-six partner countries, sixteen of which are in Africa, have drawn up a plan to help governments create a better business climate. In Ghana, we are helping the government to computerise land registration. In Tanzania we are helping to make the financial sector stronger.

Second, private sector programmes like PSOM, the Emerging Markets Cooperation Programme, and ORET, the Development-related Export Transactions Programme. These encourage Dutch business to invest in developing countries. Thirty-eight ORET projects are now under way in Africa, in sectors like infrastructure water and sanatation, totalling three hundred and sixteen million euros of support. This year I opened up the PSOM to Sudan, making it the sixteenth country in Africa eligible for this programme. Last year, we organised a seminar for Dutch investors on opportunities in Sudan. The response was amazing. Now that Sudan is back on track, they see opportunities in agri-business, infrastructure and the oil industry. And Sudan is only one of many African countries attracting new interest.

Third, corporate social responsibility. I apply the OECD’s guidelines for multinational enterprises, and draw a distinction between types of responsibility. The onus is on the enterprises themselves. They decide where and how they can go beyond their legal obligations. Take Albert Heijn, the supermarket chain which has decided to sell fair trade products, helping poor farmers to earn a living. But consumers also have a responsibility to look critically at what they buy, and the government is responsible for keeping the debate going.

Fourth, international trade. Though certainly not a complete success, Hong Kong did produce a few rays of hope for Africa. The Least Developed Countries will have more access to rich countries. They already had that high level of access to the EU. And export subsidies will be abolished in 2013. The great leap forward in trade talks will have to be made in 2006, and will mainly depend on agriculture. Next year, we will finally have to make some clear agreements on breaking open western markets.

Fifth, public-private partnerships. By joining forces, government and private sector parties can make a big difference in bringing about sustainable development. More than twenty of these partnerships have now been set up in Africa. Last year, Agri-ProFocus saw the light of day. It is an alliance between Dutch agriculture organisations, banks, NGOs and the Dutch government. It acts as a broker, bringing producers and customers together, and it helps producers in developing countries to improve their production and trade capacity. AgriFocus is now working in West Africa on a support programme for cotton growers. NFX is another such partnership, focusing on financial sector development. In Africa, it is active in Uganda and Tanzania. This February, two Dutch banks will start training staff at six local banks in these countries.

Ladies and gentlemen, let me conclude. The door to Africa is open, the door to the ministry is open, and the doors to our embassies in Africa are open. You can count on that and I hope that I can count on you. Because a government can create good conditions, but it is up to you as investors or trade partners to do the real work in Africa. To take that important step, and to fight poverty through profit. I wish you every success today and tomorrow at this event.'