WHAT IS THE DEVELOPMENT ASSISTANCE COMMITMENT?

‘Germany (supported by innovative instruments) has undertaken to reach 0.51 per cent ODA/GNI in 2010 and 0.7 per cent ODA/GNI in 2015.’

This promise was made as part of the 2005 EU commitment on development assistance. The EU commitment stipulated that 50% of the increases in global ODA would be directed to sub-Saharan Africa.

In order to deliver on its Gleneagles commitment, Germany would need to increase ODA to sub-Saharan Africa from €1.880 billion ($2.712 billion) in 2004 to €4.526 billion ($6.529 billion) in 2010. This is the fourth largest commitment among the G7 donors, both in volume terms and as a percentage of projected GNI (0.19%).

OVERALL ASSESSMENT

Despite significant and laudable increases in development assistance to sub-Saharan Africa in 2007 and 2008, Germany remains off track to meet its 2010 target. It has budgeted for further significant increases in 2009. Attaining the 2010 target is not out of reach, but will require even more rapid progress in the one remaining budget cycle.

Within the G7, Germany is an average performer on effectiveness of development assistance. It has spent more on water and sanitation in sub-Saharan Africa than any other G8 country and is a clear leader in this sector. It also continues to be a leader in generating funding from innovative financing mechanisms, including being the first G8 country to direct financing from the sales of CO2 emissions certificates to development. However, Germany, along with other members of the EU, has failed to deliver pro-development trade reforms.

LOOKING AHEAD

Germany's ODA to sub-Saharan Africa increased substantially in 2007 and 2008 and will grow again in 2009. German political leaders have pointed out that despite - and because of - the financial crisis, development assistance remains important. This was underscored when Germany allocated $144 million from its national stimulus package for infrastructure projects in developing countries. It is critical that Germany continues to significantly increase its budget for development assistance and that most of these increases are channelled to sub-Saharan Africa. The positive trend established over the past three years needs to be continued by whatever coalition forms the government after the elections in September 2009. It is encouraging that cabinet members of both coalition parties have indicated substantial ODA increases for 2010. These ODA increases have to come in a genuinely concessional form so that sub-Saharan African countries stand to benefit from them without jeopardising their debt sustainability. By doing this, Germany can further build on its international credibility as a responsible partner for developing countries.

SEE THE ODA CHART

GERMANY ODA to sub-Saharan Africa and 2010 target

Click to enlarge
 

IS GERMANY DOING ITS PART TO MEET THE G8's SECTORAL COMMITMENTS?
 

ON TRACK
DEBT
  • Along with other G8 countries, Germany agreed to cancel 100% of qualified debts for the poorest countries, first through the HIPC and then through the MDRI process.
  • An important measure of progress on debt is the extent to which donors fulfil their commitments to compensate the IFIs for lost reflows due to lost revenue from debt servicing. In total, Germany has made pledges to cover the cost of multilateral debt cancellation worth $3.709 billion up to 2044, which fully meets its share.
  • As part of those pledges, Germany has committed to contribute $1.036 billion between 2007 and 2019 to compensate IDA for reflows lost due to MDRI. As of 30 June 2008, Germany had delivered the full amount as an unqualified pledge. Germany is therefore on track.
  • Germany has cancelled 100% of bilateral debt owed by HIPC countries. This includes 100% of its post-cutoff- date commercial debt.
WATER AND SANITATION
  • This report interprets the G8 commitment on water and sanitation to mean that a donor should direct 5.5% of its ODA to sub-Saharan Africa to the sector. At 9.07% in 2007, Germany exceeded the target and devoted the highest percentage of ODA among the G8 countries to the region's water and sanitation sector, up from 5.45% in 2006.
  • In 2007, Germany contributed the highest dollar amount of all G8 countries to the region's water and sanitation sector - $370 million, up from $322 million in 2006.

OFF TRACK
AGRICULTURE
  • As of 31 December 2007, Germany had failed to reverse the decline in funding for agricultural development. It provided $174.4 million to agriculture in sub-Saharan Africa in 2007, a 5.8% decrease (approximately $11 million) from 2006 levels.
  • Though ODA figures are not yet available, in 2008 Germany reacted to the food crisis by prioritising food security. It committed close to $897 million in bilateral assistance for food security globally. Around $287 million of this has been spent in sub-Saharan Africa, $65 million of it in emergency food aid.
  • In 2007, Germany spent $130.56 million on emergency food aid for sub-Saharan Africa. Despite some fluctuations, from 2004 to 2007 Germany consistently spent more on agriculture and rural development than on emergency food aid in the region.
  • As part of the EU, Germany contributed a share of the €1 billion ($1.44 billion) for agriculture in the developing world (ONE calculates €760 million ($1.096 billion) to be additional to ODA already budgeted at the EC level). This was approved by the EU in December 2008. At least $1.154 billion will be disbursed in 2009. Germany ensured that its share of the bilateral top-up of the Emergency Aid Reserve of around $68 million was entirely additional.
EDUCATION
  • Germany committed $179 million to primary education in sub-Saharan Africa in 2007, a substantial increase from only $66 million in 2006, but still off track from what was needed to provide its proportionate share to achieve UPE in sub-Saharan Africa (which required $280 million from Germany in 2007). These increases will need to continue in order to put Germany on track to deliver its Gleneagles commitment on education by 2010, which would require that it commits $258 million to primary education in sub-Saharan Africa in 2008 and $501 million in 2010.
  • 41% of Germany's ODA to education in sub-Saharan Africa was spent on primary education in 2007.
TRADE
  • As a key member of the EU, Germany is represented in the WTO negotiations and bilateral trade negotiations such as the EPA negotiations through the EU. Sensitivities in the agricultural sector, combined with market opening interests in the manufactured goods and services sectors, continue to impede the progress of negotiations in the prodevelopment agenda.
  • The EU is currently negotiating EPAs with African regions EPAs are two-way deals that require African countries to open up their markets in return for better access to EU markets, and were introduced after the original programme that provided special market access to African, Caribbean and Pacific countries expired at the end of 2007 due to WTO compliance issues. Many civil society voices have been critical of the EU's approach to EPAs, voicing concerns about the adequacy of policy space. The fragmentation of regional blocs has also been attributed to the EU forcing countries to negotiate as part of groupings that do not reflect existing regions in Africa. This has seriously undermined the objective of enhancing regional trade and integration - one of the prime goals of EPAs. While negotiations continue, the interim agreements that have been initialled with certain countries such as Cameroon and Ghana, or certain regions such as the East African Community, do allow preferential access to EU markets to continue until full agreements have been concluded. With the mandate of the present European Commission winding down before June's European elections, and with the next Commission unlikely to take office until after the Lisbon Treaty referendum in October, agreement on full EPAs still looks a long way off.
  • LDCs are granted nearly 100% duty-free/quota-free market access to products through the EU's Everything But Arms programme. However, this programme does not cover all African countries and has been criticised for maintaining complicated rules of origin that make it difficult for poor countries to utilise.
  • In 2005, at the WTO Ministerial meeting in Hong Kong, the EU pledged to increase aid for trade to all developing countries by €2 billion ($2.5 billion) per year by 2010. According to OECD figures, Germany's aid for trade contribution to Africa was $845 million in 2007, down from a peak of $960 million in 2005. Meanwhile, the needs for aid for trade in Africa alone are estimated to be $12-$14 billion per annum.
  • The European Commission is the world's largest subsidiser of the agricultural sector, collectively spending approximately $73.3 billion in subsidies to support its farmers in 2007 through its Common Agricultural Policy (CAP). German farmers received $9.3 billion through the CAP. Germany is a net contributor to the CAP.

PROGRESS REPORT
HEALTH
  • Total health sector spending for sub-Saharan Africa was $321.63 million, a 4.7% decrease over 2006 and a $76.21 million or 31.1% increase over 2004.
  • Of total 2007 health spending, Germany spent $173.7 million, or 54.01%, on infectious diseases; $122.81 billion, or 38.18%, on health systems; $20.2 million, or 6.28%, on basic health; and $4.92 million, or 1.53%, on reproductive health.
  • Germany pledged and contributed $312.2 million directly to the Global Fund in 2008.
  • Germany has pledged to support Debt2Health with up to $288 million from debt swaps between 2008 and 2010. So far debt swaps have been agreed with Indonesia ($72 million) and Pakistan ($58 million).
  • Germany contributed $26.2 million to the Global Polio Eradication Initiative in 2007, and increased this contribution to $80.96 million for 2008. In January 2009, it contributed $130 million to the Global Polio Eradication Initiative.
  • As in 2006 and 2007, Germany contributed $6 million to the GAVI Alliance, and is planning to make the same amount available annually over the next years. There was no contribution in 2008.