Economic ties between Kenya and the Netherlands will grow stronger

President William Ruto and First Lady Rachel Ruto during a meeting with His Majesty King Willem-Alexander and Her Majesty Queen Máxima at Noordeinde Palace, The Hague, Netherlands, on May 8, 2023. [File, Standard]

The future of global trade is not in short-term transactions but in sustainable partnerships that create long-term value. In times when climate change, food insecurity resulting from low agricultural productivity, water scarcity, and increasing unemployment rates are defining challenges, nations must rethink their approach to economic collaboration. The Netherlands and Kenya have a unique opportunity to demonstrate how trade and investment can be leveraged as a tool to foster mutually beneficial sustainable economic development, innovation, and shared prosperity.

Parallel with the State Visit of His Majesty King Willem-Alexander and Her Majesty Queen Máxima, the upcoming Kenya-Netherlands Trade Mission on Sustainable Agriculture and Water (March 17-20, 2025) attended by over 50 Dutch companies actively seeking business and investment opportunities in these sectors, represents the huge interest of the Netherlands in Kenya. This is a step in not only strengthening economic ties but also bridging investment and financing gaps while leveraging the complementary strengths between our two nations to achieve positive economic, social, and environmental impact.

The Netherlands is amongst the top three export trading partners for Kenya and the largest in the European Union, with a trading volume exceeding all the other EU countries combined. In 2023, Kenya exported $706 million to Netherlands, an annualised increase rate of 4.84 per cent, from $557 million in 2018. The Netherlands also exported $377 million to Kenya. This showcases the significant contribution of the Netherlands to Kenya’s export earnings. The Netherlands is also amongst the top three Foreign Direct Investment contributors to Kenya according to data from the Kenya National Bureau of Statistics.

More than 150 Dutch companies operate in Kenya. They are active in the agriculture, health, water, logistics financial and energy sectors. The Netherlands Business Hub plays a pivotal role in bringing together and representing Dutch companies in Kenya. But it’s more than that. This trade mission is unique in nature by bringing together not only the private sector but also knowledge institutions, NGOs, social enterprises, financial institutions and investors. This demonstrates the much-needed intersection of business, finance, policy, knowledge, expertise and social impact through the renowned ‘Dutch Diamond Approach’.

Businesses, financial institutions and investors are not just looking at Kenya as a market but as a long-term investment destination where investments and financial capital can drive impact and sustainable development. Kenyan corporates and small and medium enterprises, in turn, will benefit from financing solutions tailored to various sectors as access to finance has been identified as a key challenge facing local and foreign companies. This has been actualised further through the establishment of a Dutch Desk by Invest International in collaboration with Kenya Commercial Bank to aid companies seeking to do business in Kenya with bank account opening, access to credit, trade and commodity finance solutions, and export finance. Other programmes have also been implemented to support SMEs and women in agricultural value chains with export market readiness and EU market access.

Kenya’s agricultural sector is both its economic backbone and a sector under pressure. It contributes approximately 20 per cent of GDP and is a significant source of employment, yet it faces threats from changing and unpredictable weather patterns due to climate change, as well as challenges related to high production costs and market access.

Smallholder farmers often have limited access to finance, making it difficult to purchase high-quality inputs for better yields. Larger companies, on the other hand, must balance significant investments in sustainability to meet export requirements while dealing with low market prices. Additionally, many other challenges must be addressed to improve production and ensure food security and safety.

The Netherlands, as a global leader in agricultural innovation and one of the largest importers of Kenyan agricultural products, can support the gradual transformation of Kenya’s agriculture. Beyond private sector investments, Dutch expertise in precision farming, climate-smart solutions, and advanced supply chain logistics can play a crucial role. Kenyan agribusinesses and SMEs can benefit from Dutch knowledge in water management, irrigation, biological pest control, and access to high-quality inputs to enhance both yield and quality.

Finally, investments in transport and cold chain logistics can further strengthen Kenya’s strategic location, improving market access and boosting the competitiveness of its agricultural exports.

Kenya is classified as a water-scarce country, with per capita water availability well below the global average. The country faces major challenges in water access, management, and distribution, worsened by climate change, rapid population growth, and increasing water demand. Water scarcity affects key sectors such as agriculture, industry, and domestic use, impacting food security, public health, and economic development.

The National Water and Sanitation Plan by the Kenyan government is estimated to cost $8.32 billion to enable access to water and sanitation for all in Kenya’s rural and urban areas, presenting an opportunity for finance, investment and infrastructure development.

Dutch companies can play a key role in providing advanced wastewater treatment solutions, desalination technologies, flood risk management and nature-based innovations that enhance water security and resilience.

With Kenya prioritising urban water management, smart irrigation, and circular water use, there is growing demand for Dutch expertise in digital water monitoring, groundwater management, and efficient irrigation systems for agriculture.  The Netherlands government is supporting Kenya through various interventions such as the Water as Leverage Sponge City for Nakuru and development phase funding for two PPP projects in the water sector within Nakuru and Coastal region.