Efforts to fight extreme poverty are being dangerously undermined as record levels of overseas aid is being spent within its country of origin, according to The ONE Campaign. 

The warning comes as OECD DAC’s release of provisional Official Development Assistance (ODA) data for last year shows that ODA – often called overseas aid – reached record levels of $204 billion in 2022, but this was mostly down to an increase in the amount that donor countries spent within their own borders. 

As a result, the data shows that bilateral ODA going to countries in Africa declined last year by more than 7%. This is despite the need from the continent, with countries facing a combination of challenges from climate threats, hunger shocks, and debt distress.  

Sara Harcourt, Senior Director for Development Finance, said: “Extreme poverty is on the rise for the first time in decades and yet development funding to Africa is actually falling. Reports of record levels of ODA are effectively a mirage as rocketing levels of aid being spent in its country of origin mean more and more is being diverted from its intended purpose. 

“In the face of escalating global crises such as climate change, conflict, spiralling debt and economic stagnation – and the ongoing fallout from the global COVID 19 pandemic – it should be unthinkable that less money is going to developing countries to deal with the challenges on their doorstep. Donor countries should commit to ensuring that their ODA budget goes to low income countries and directly addressing poverty, and its root causes.”

A significant proportion of the increase in aid that doesn’t reach developing countries is because of the increased cost of supporting refugees in donor countries (In-Donor Refugee Costs), which reached a record level of $29.3 billion, 14.4% of total aid in 2022.

Harcourt continued: “It’s absolutely right to support people fleeing from conflict and instability, and help support those who seek refuge elsewhere, but this should not be coming from ODA budgets. Forcing trade-offs during a crisis is short sighted and bad policy.”