OECD releases preliminary overseas aid figures for 2018

This week the Organisation for Economic Co-operation and Development’s (OECD) Development Co-operation Directorate released the provisional figures for total Official Development Assistance (ODA) by Development Assistance Committee (DAC) members in 2018.

The rules governing ODA are changing, and this is the first set of ODA statistics published under new rules regarding how ODA is accounted for.¹ Under these rules, only a percentage of each ODA loan is counted as ODA, with the percentage dependent on how “concessional” – provided on terms that are substantially better than the market rate – the loan is. This is offset by the fact that loan repayments are no longer deducted from the final ODA figure for each donor.

Donors are also now able to report some additional investments in the private sector of developing nations – known as Private Sector Instruments (PSIs) – as ODA. In order to compare data against previous years, the OECD has published ODA figures for 2018 calculated according to the previous “net ODA” (or cashflow-based) measure as well as the new “grant equivalent” measure of ODA.

Topline figures

These figures show that total ODA fell in real terms for the second year in a row, down by US$4.1 billion (2.7%) on the net ODA measure and by US$2.5 billion (1.6%) under the new grant equivalent measure, and ODA as a percentage of donors’ Gross National Income (GNI) remained unchanged at 0.31% (having previously fallen from 0.32% in 2016 to 0.31% in 2017). The main factor in the fall is lower in-donor refugee costs (IDRCs), which were down by US$4.2 billion.

Figure 1: DAC members’ net ODA and net ODA as a % of GNI (2000-2018)

Table 1: Total net ODA by donor (2017-2018)

Donor	Net ODA (cashflow basis) 2018	Net ODA (cashflow basis) 2017	US$ difference	% difference
Australia	3,119	3,004	114	3.8%
Austria	1,175	1,332	-156	-11.7%
Belgium	2,361	2,337	24	1.0%
Canada	4,616	4,396	220	5.0%
Czech Republic	323	333	-11	-3.2%
Denmark	2,568	2,567	1	0.0%
Finland	983	1,151	-168	-14.6%
France	12,504	11,975	592	4.4%
Germany	25,886	26,675	-789	-3.0%
Greece	282	330	-48	-14.5%
Hungary	190	158	33	20.7%
Iceland	81	69	12	17.4%
Ireland	928	879	49	5.6%
Italy	4,900	6,223	-1,323	-21.3%
Japan	10,064	11,627	-1,563	-13.4%
Korea	2,417	2,278	140	6.1%
Luxembourg	473	456	17	3.7%
Netherlands	5,616	5,308	308	5.8%
New Zealand	556	443	113	25.6%
Norway	4,257	4,444	-186	-4.2%
Poland	754	715	39	5.4%
Portugal	341	404	-63	-15.6%
Slovak Republic	133	128	6	4.4%
Slovenia	83	81	2	2.8%
Spain	2,581	2,705	-125	-4.6%
Sweden	5,843	5,593	250	4.5%
Switzerland	3,091	3,182	-91	-2.9%
United Kingdom	19,455	19,111	344	1.8%
United States	33,741	35,512	-1771	-5.0%
Total DAC	149,323	153,417	-4094	-2.7%
EU Institutions	17,131	17,465	-344	-1.9%

In absolute terms, the United States continued to be the single largest provider of net ODA (US$33.7bn in grant equivalent ODA at current prices and exchange rates, representing 0.16% of GNI), followed by Germany (US$25.9bn: 0.63%), the United Kingdom (US$19.5bn: 0.7%), Japan (US$10.1bn: 0.20%) and France (US$12.5bn: 0.44%).²

The largest reductions in net ODA in cash terms were reported by four members of the G7: the US (US$1.8 billion), Japan (US$1.6 billion), Italy (US$1.3 billion) and Germany (US$0.8 billion).

Table 2: Total grant equivalent and net ODA by donor (2018)

Donor	ODA grant equivalent measure	Net ODA (cashflow basis)	US$ difference	% difference
Australia	3,119	3,119	0	0%
Austria	1,178	1,175	3	0%
Belgium	2,294	2,361	-67	-3%
Canada	4,655	4,616	38	1%
Czech Republic	323	323	0	0%
Denmark	2,582	2,568	13	1%
Finland	983	983	0	0%
France	12,155	12,504	-350	-3%
Germany	24,985	25,886	-901	-3%
Greece	282	282	0	0%
Hungary	190	190	0	0%
Iceland	81	81	0	0%
Ireland	928	928	0	0%
Italy	5,005	4,900	105	2%
Japan	14,167	10,064	1403	41%
Korea	2,351	2,417	-66	-3%
Luxembourg	473	473	0	0%
Netherlands	5,616	5,616	0	0%
New Zealand	556	556	0	0%
Norway	4,257	4,257	0	0%
Poland	763	754	9	1%
Portugal	390	341	48	14%
Slovak Republic	133	133	0	0%
Slovenia	83	83	0	0%
Spain	2,874	2,581	293	11%
Sweden	5,844	5,843	1	0%
Switzerland	3,094	3,091	4	0%
United Kingdom	19,403	19,455	-52	0%
United States	34,261	33,741	520	2%
Total DAC	153,025	149,323	3702	2%
EU Institutions	16,388	17,131	-743	-4%

Under the new grant equivalent rule, ODA in 2018 is US$3.7 billion higher compared to the previous measure.

In particular, Japan’s ODA appears much higher under the new methodology due to its large and highly concessional loan portfolio (despite a fall in net ODA). ODA from the United States is also higher under the new measure because, although the United States does not currently give ODA loans, it has a large stock of old loans on which it is receiving repayments.³

France and Germany, who give loans at relatively low levels of concessionality and receive less loan repayments than Japan, both have lower levels of headline ODA under the new measure.

Figure 2: Total ODA by donor as a % of GNI (2017-2018)⁶

As in 2017, only five donors (including the United Kingdom) achieved the 0.7% of GNI ODA target in 2018 (down from six in 2016), with ODA as a percentage of GNI falling in 12 of 29 DAC members in 2018.⁴

Relative to GNI, Sweden (1.04%), Luxembourg (0.98%) and Norway (0.94%) remain the most generous donors, followed by Denmark (0.72%) and the United Kingdom (0.7%).⁵

Under the grant equivalent methodology Japan’s ODA rose to 0.28% of GNI from 0.23%, despite ODA falling by US$1.6 billion on a net ODA basis. Conversely, France remained unchanged at 0.43% despite an increase of US$0.5 billion in net ODA due to the fact that the grant equivalent measure values French ODA less highly than the previous measure.

Figure 3: Total net bilateral ODA to Less Developed Countries (LDCs) (2000-2018)⁷

In 2018 total net bilateral ODA to Less Developed Countries (LDCs) fell by US$0.9 billion, leaving ODA to LDCs almost US$2 billion below its 2011 peak (a decline of nearly 7%). Ireland alone gave over 50% of its bilateral ODA to LDCs, and a further seven other donors – Belgium, Canada, Korea, Luxembourg, Poland, Sweden and the US – all gave over 30% of their bilateral ODA to LDCs in 2018.

Figure 4: Total net bilateral ODA for humanitarian support and in-donor refugee costs (2010-2018)

ODA to short-term priorities such as humanitarian support and In-Donor Refugee Costs (IDRC) has fallen from its 2016 peak, but remains at historically high levels: the proportion of total ODA spent on short-term priorities was almost 22% in 2018 compared with less than 13% in 2010.

Expenditure on IDRCs fell by US$2.4 billion in Germany, US$0.8 billion in Italy, US$0.3 billion in the Netherlands and US$0.3 billion in Sweden, reflecting not only lower rates of refugee arrivals in Europe, but also a tightening of DAC rules around the reporting of IDRCs.

Despite these falls, however, aid to short-term priorities still comprised a much higher proportion of total ODA than was the case prior to 2014.

Figure 5: Total ODA to Private Sector Instruments (PSI) (2018)

In 2018, a total of 12 donors reported almost US$2.5 billion in ODA expenditure in the form of Private Sector Instruments (PSIs) under provisional reporting arrangements, with three-quarters of ODA-eligible PSI expenditure reported by three donors.

Of the US$2.5 billion reported, US$1.5 billion was in the form of increased capital allocations to national Development Finance Institution (DFIs) and US$1 billion in the form of loans and other investments to the private sector within developing countries.

44% of total PSI ODA was reported by the United Kingdom – the majority of which was in the form of capital transfers to CDC Group, the UK’s DFI – with a further 17% from France and 14% from Canada.

The amounts reported as capitalisation of national DFIs pose a transparency problem as no data currently exists to indicate the use that DFIs make of this funding.

The OECD DAC’s most recent ODA data release is available here, and the full dataset can be accessed via OECD Stat.

Further information and relevant downloads are available from the Development Initiatives website.

Footnotes