Thursday, March 30, 2023

Four Centuries of Ghana-Netherlands Relations: A Historical Perspective

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By H.E. Ms. Sophia Horner-Sam, Ambassador of the Republic of Ghana to the Kingdom of The Netherlands.

The Republic of Ghana and the Kingdom of the Netherlands have maintained a long-standing and occasionally intricate economic, historical, political and cultural relations that have evolved between the two countries since 1598 when the Dutch established a trading post, Fort Nassau in Moree, a seaside resort now located in the Central region of Ghana. The Dutch then fortified its position by conquering the Elmina Fort from the Portuguese in 1637 and established the Dutch Gold Coast (a portion of contemporary Ghana) which it administered for about two centuries until 1872 when the Fort and the Gold Coast were ceded to the British.

Central to Dutch contact was the desire to gain a secure foothold into West Africa for the Dutch West Indian Company and to enhance its trading interests. In the competition with other European companies on the coast, having a powerful ally in the interior was of great importance. To this end, the Dutch formalized and enhanced the Netherlands-Gold Coast bilateral ties by sending the first European envoy in the person of David Van Nyendael of the Dutch West Indian Company, to the royal court of King Osei Tutu of the Asante Kingdom in Kumasi in November, 1701 to establish economic and diplomatic  relations between the Asante Kingdom in the interior and the Dutch on the coast, that was to endure for over 170 years and marked the formal beginning of the existing relationship between the two countries. 

Although Ghana and the Netherlands have been trading in many products for centuries, the commodities involved have varied over time. In the 16th century, the trading relationship flourished on the exchange of Ghanaian gold, ivory and spices for Dutch textiles, firearms, gunpowder, metal ware and alcoholic beverages. As the transatlantic slave trade took centre stage by the 18th century, slaves rather than gold became the most valuable commodity for the West Indian Company until its abolition in the 19th century and then followed a decline in bilateral trade.

In spite of the sordid past, the relations withstood the test of time and by the mid-20th century legitimate trade between the two sides rejuvenated and imports of Dutch commodities shifted to processed foods, alcoholic beverages, textiles and footwear. Today, Ghanaian ritual and social life is incomplete without Dutch alcoholic drinks particularly, schnapps, gold, timber logs, rubber, and palm oil became Ghana’s major exports to the Netherlands. 

At the onset of 21st century and in recent times, the Netherlands has become the fifth destination for Ghana’s exports for cocoa beans and cocoa products, wood, aluminum, fruits, vegetables, oil seeds, fish and fish products as well as flowers valued at US$ 829.4 million in 2017. Conversely Ghana is the Netherlands’ fourth export destination in sub-Saharan Africa for used vehicles and parts, electrical and electronic equipment, machinery, nuclear reactors, chemicals, pharmaceuticals, textiles and food products which amounted to US$667.1 million in 2017.

The Netherlands and Ghana have retained largely uninterrupted and cordial diplomatic relations since 1701 andthroughout the political changes in Ghana to date.  From 1982 to 1997, Ghana closed down its Mission in The Hague due to a re-alignment exercise of Ghana’s diplomatic Missions at the time. However, the critical and deep rooted relationship between the two countries could not sustain the absence of a diplomatic mission in The Hague, leading to the reopening of Ghana’s Mission in 1998. The Netherlands, however, had kept its Mission in Accra opened at the level of Charge d’ affaires until 1991, when it was upgraded to the Ambassadorial level.

Development cooperation advanced to a level where 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.

The healthy economic growth in Ghana and its resultant transformation to a middle-income economy status, necessitated a policy shift from the Dutch government in which, the relationship between Ghana and the Netherlands  is now speedily moving 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 indeed, is in line with the “Ghana Beyond Aid” Policy initiative of the Government of Ghana, which seeks to harness effectively, Ghana’s own resources to finance its development and economic growth, whilst minimising or completely eliminating the country’s reliance on ODA.

In this regard, the Dutch policy focuses on the promotion of the private sector in order to enhance mutually beneficial trade and investments between the two countries. Incentives in the form of new financing and business models are being rolled out within the period 2019-2022 to encourage businesses, especially, among young entrepreneurs to invest in Ghana in sectors where Dutch companies could impart expertise and technological innovation. Ghana envisages that such interventions will go a long way to help to achieve aspects of the Sustainable Development Goals (SDGs).

Similarly, the Government of Ghana continues to promote incentives to support micro and small businesses which constitute over 70 percent of all businesses in Ghana to enable them to become competitive locally and internationally and contribute to the socio-economic development of the country. Under the presidential Business Support Programme for instance, 1,350 entrepreneurs across all the 16 regions of Ghana have received training and financial support to start or scale up their businesses.

Additionally, the current Government under the leadership of H.E. the President of the Republic of Ghana, Nana Addo Dankwa Akufo-Addo has embarked on priority programmes to speed up Ghana’s developmental process. Notable among these initiatives are the “one district, one factory” (1D1F), “planting for food and jobs” (PFFJ), and the digitalisation of the economy. The private sector has also been positioned as the main actor and a beneficiary of these initiatives, which it is believed will lead to efficient delivery of goods and services and increase productivity in the economy. 

It is undeniable the fact that, the longstanding relationship between Ghana and the Netherlands which began with Dutch traders frequenting the shores of Ghana, triggered reverse migration from Ghana to the Netherlands from the last quarter of the 20th Century, mostly driven by the same economic motives that attracted the early Dutch traders to sail to the Gold Coast 400 years ago. Whereas an estimated 800 Dutch nationals currently live in Ghana, an approximately 20,000 Ghanaians are legally resident in the Netherlands, comprising diverse professionals, workers and students who not only contribute to push the wheels of the Dutch economy but also assist to keep alive a relationship that began four centuries ago. 

In recognition of the significant contribution of the Ghanaian diaspora to the national economy, the Government of Ghana, through the Ghana Embassy in The Hague, has continued to collaborate with other organisations to employ and channel the potentials and resources of Ghanaian expatriates for the socio-economic development of Ghana as well as for their own benefit. Furthermore, the two governments keep up cooperation to address challenges relating to cases of undocumented Ghanaian migrants and illegal migration.

As Ghana continues to make strides towards the advancement of its economy, the country no doubt is still confronted with some challenges relating to among others, the modernisation of agriculture and agro-processing, expansion of the industrial and manufacturing base, infrastructural, real estate development, waste management as well as railway development but which are all surmountable.

Ghana seeks external partnerships to team up with Ghanaian companies and new investors to take advantage of the numerous investment opportunities in the country. It is against this background that Ghana values the new initiatives with the Netherlands to attract Dutch direct investments into Ghana. 

Ghana is certainly a favourable destination for investments and trade for several factors notably:

  • Ghana is a beacon of democracy, political stability and peace in Africa,
    • Ghana is endowed with rich natural resources such as gold, diamonds, bauxite, limestone, oil, timber, wildlife, marine resources and vast expanse of arable land that offer investment opportunities in all the key sectors, 
    • There is an already existing industrial base coupled with a burgeoning and competitive start-up sector that is ripe for investment in areas ranging from IT solutions to agriculture,
    • There is abundant, adaptable and easily trainable labour force, the people are hospitable and friendly,
    • Ghana’s strategic location, with excellent sea and air connections with Europe and USA, provides access to the ECOWAS market of 349 million people, and potential market of 1.3 billion in the newly created African Continental Free Trade Area (AfCFTA), headquartered in Ghana’s capital city of Accra, 
    • Above all Ghana is among the fastest growing economies in the world.

As Ghana and the Netherlands continue to share similar aspirations and developmental goals, the bilateral relations between the two countries can only grow from strength to strength and trade will remain an important medium of cooperation in the 21st century and beyond just as it was in the 16th century.

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