Thursday 09 December 2021

‘Dutch’ investments account for 20% of money put into Africa

Around 20% of investments in fast-growing African economies are made through the Netherlands, the Financieele Dagblad reports on Monday.

In particular, foreign multinationals are basing their African activities in the Netherlands because of the ‘friendly’ legal and fiscal climate, the Financieele Dagblad says.

This means that Dutch trust offices and the financial advice sector are benefiting from investments in countries such as Angola, Ghana and Nigeria, as is the Dutch state.

Heineken

The paper looked at which companies are active in Africa and how their activities are structured. Researchers identified 2,200 African activities which are being carried out under a Dutch flag. In 38% of them, genuine Dutch firms such as Heineken, Philips and Unilever are involved.

But the rest are foreign firms, often active in mining, oil and telecoms, which operate in Africa via a Dutch holding. Many of them are from the US or Britain, the paper says.

The figures are in line with similar calculations made by the Dutch central bank in 2011. It said then Dutch firms were responsible for €80bn of the €409bn which was invested in Africa.

Treaties

The Dutch role is partly explained by the 10 tax treaties signed between the Netherlands and African countries, the paper says. The Netherlands also has bilateral investment treaties with 27 African countries.

In May, Dutch aid group Oxfam Novib said developing countries are missing out on some €460m a year in income because big companies use letterbox firms to avoid paying tax there.

Brewers, oil firms and mining companies are happy to do business in Africa but use complicated constructions to reduce their tax bills, the organisation’s research, quoted by RTL news, showed.

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