Main Corrections
Project funding re-emerged in Dutch bilateral cooperation in 2005/06 in response to the Millennium Development Goals (MDGs). This shift aimed to stimulate Dutch private sector involvement and achieve more concrete (and visible) outcomes. Following a reform of Dutch International Cooperation in 2010/11, Mozambique was categorized as a transition country — one moving from aid dependence to trade-based relations. However, due to slower-than-expected economic growth, more traditional forms of development cooperation were retained.
The Netherlands focused on three key themes for cooperation with Mozambique: Water, Food & Nutrition, and, later, Energy. The Netherlands had established a strong reputation in Mozambique for its work in Water and Food & Nutrition.
Water card
Dutch support to the water sector in development aid declined between 1999 and 2002, despite the hosting of the first World Water Forum in The Hague in 2000. The reasons for this decline included delays in the implementation of new policies and an expanded geographical focus that included the Balkans. However, after 2002, water became a central focus again, partly due to Crown Prince Willem-Alexander’s choice to champion water management as a key issue.
Agnes van Ardenne, Herfkens' successor and a Christian democrat, first as state secretary and later as minister, strongly advocated for Public-Private Partnerships at the 2002 Johannesburg Sustainability Conference. She committed to providing 50 million people with access to water and sanitation by 2015, which gave a significant boost to the Water Agenda within Dutch development cooperation. Under her successor, Bert Koenders (also a social democrat), this agenda was expanded to include water resources and delta management, alongside further private sector involvement and export support.
Implications for Dutch support to Mozambique
This renewed focus on water, with an emphasis on private sector involvement, greatly impacted Dutch bilateral cooperation in Mozambique. Whereas Herfkens had aimed to reduce the number of projects, her successors oversaw the introduction of a wider range of instruments, while the urban water sector in Mozambique had gained the capacity to absorb these funds.
In 2011, a shift in development cooperation occurred following a critical report by the Netherlands Scientific Council for Government Policy (WRR, 2010). Mozambique remained a focus country, with the Dutch Embassy prioritizing Agriculture (Food & Nutrition) and Water as the key themes, which continue to be highlighted in the current Multiple Annual Country Strategy for 2023–2026.
Aid & Trade
In 2010, the discovery of new gas fields in northern Mozambique, combined with the country's growing economy, led to expectations that Mozambique could soon transition from a Low-Income Country to a Middle-Income status. Consequently, in 2011, Mozambique was placed in the "transition" category, signaling a shift from an aid-based relationship to a trade-based one. However, this transition strategy was hindered by stagnating economic growth after 2014, instability around the gas fields, and the Hidden Debt scandal. As a consequence, the thematic focus on the SDG agenda remained, as detailed in the Aid & Trade policy sheet.
The role of the Dutch guarantee instrument for export promotion, particularly for contracts related to the LNG terminal in Cabo Delgado, has been questioned by various Dutch political parties, due to concerns about fossil fuel investments amidst the global push for climate change mitigation and the security situation in Cabo Delgado (see Tweede Kamer 2024).
Overload
In its effort to stimulate the Dutch private sector to invest in developing countries, the Netherlands created several funding instruments targeting commercial and semi-public actors. These instruments, managed by RVO (Netherlands Enterprise Agency), were made available for investments in Mozambique and included programs like Water Mondiaal, Partners for Water, the Sustainable Water Fund (FDW), and the Sustainable Entrepreneurship and Food Security Fund (FDOV), as well as export promotion funds and guarantees for large contracts in the dredging and gas industries.
Private sector promotion also included the creation of PLAMA, a public-private platform for the water sector, and support for start-ups under the Orange Corner program. In parallel, other initiatives were promoted, such as higher education programs (NUFFIC), school WASH programs (Football for Water), and water resources management projects (Blue Deal).
However, these numerous projects led to a significant overload at the Dutch Embassy (EKN) and resulted in a loss of oversight over projects and partners in Mozambique. The number of projects supported by the Netherlands expanded drastically, and the Dutch water utilities decided not to use funding from the WaterWorkx program in Mozambique. The overload of the Embassy was exacerbated by the end of general budget support and the repercussions of the Hidden Debt scandal, which increased the need for control and oversight.
References
Büscher Chris (2021). Water aid and trade contradictions: Dutch aid in the Mozambican waterscape under contemporary capitalism; PhD thesis University of London – SOAS
GON (2012) Multiple Annual Strategic Plan Mozambique 2012-15 (EKN-Maputo; MoFA)
GON (2014) Multiple Annual Strategic Plan Mozambique 2014-17 (EKN Maputo; MoFA)
GON (2019). Multiple Annual Country Strategy Mozambique 2019-2022 (MoFA/EKN; water sections; link is public version only)
GON (2023). Multiple Annual Country Strategy Mozambique 2023-2026 (MoFA/EKN; water sections; link is public version only)
Tweede Kamer (2024) Vragen gesteld in verband met de export kredietverzekering voor de LNG terminal in Mozambique
WRR (2010). Minder Pretentie meer ambitie; ontwikkelingshulp die verschil maakt
WITS 2023; select export or import; https://wits.worldbank.org/CountryProfile/en/MOZ
WTO 2017; select export or import; https://www.wto-ilibrary.org/content/books/9789287045799c007
Original text 20/12/2024 D. Bouman
