It’s official, overall global aid levels have stagnated, but some donors bucked the trend and gave big increases. The Organization for Economic Development (OECD) – responsible for tracking official aid flows – has published final aid statistics for 2017 and alarmingly revealed that some donors are not prioritising their commitments to end poverty by 2030.
Here’s some of the main findings:
Global aid decreased by 0.1% in 2017
On the whole, global aid was flat in 2017, with a slight reduction in real terms from the previous year. This was mainly because ‘in-donor refugee costs’ – spending on refugees in donor countries – was significantly lower. If these costs are excluded, then global aid actually rose by 1.6%.
As a proportion of national income, official development assistance (ODA) was down to 0.31%, from 0.32% in 2016. This indicates that aid spending is not keeping pace with economic growth in donor countries. Only five countries achieved the internationally agreed target of allocating 0.7% of national income to ODA– the UK, Sweden, Luxembourg, Norway and Denmark.
Aid to the poorest countries is on the up
In positive news, aid to Africa was up by 4.6% and aid to the least developed countries was up by 7.4%. These increases are urgently needed after the share of aid going to these countries was in decline for many years. However, even with these increases, aid per person in Africa is just US$39, and without further increases, that figure could decrease to US$28 per person in 2030 due to Africa’s booming population.
By 2050, the African continent’s population is forecast to rise to roughly 2.5 billion people by 2050, with half of all Africans under the age of 25. This youth boom has huge potential for economic growth, but in order to realise this economic dividend, there needs to be urgent investment in human capital to ensure a healthy and educated workforce.
Individual donors are a mixed bag
Excluding in-donor refugee costs, almost half of donor countries decreased their total aid in 2017. But a few countries led the way with significant increases. France and Japan both increased total aid by over US$1.4 billion, while Italy (+US$639 million), Sweden (+US$537 million) and the UK (+US$539 million) also saw big rises.
France takes on the leadership of the G7 in 2019. We will look to their example to rally other major donors to increase their support for development, particularly in Africa where it is forecasted that 90% of the world’s poorest people will be living in 2030.
While it is concerning that many wealthy countries are not prioritizing development commitments, we know that even large increases in ODA cannot fill the trillions of dollars of investments needed in developing countries. Africa also needs an influx of private investments (the continent receives less than 3% of global foreign direct investment flows) and African governments need to boost domestic revenues and increase their investments in social services.
But as global poverty is becoming more and more concentrated within African countries, we need to refocus aid to the countries that need it the most. Ensuring that precious aid resources which are being used to leverage private finance actually lead to greater investment and development impact in the poorest countries.
Written by ONE’s Senior Director, Development Finance, Sara Harcourt.