Aid and Development

5 facts about finance to the world’s poorest countries

Join

Join the fight against extreme poverty

In our new 2017 DATA Report, we found that aid was at record levels in 2016. That’s a good thing, right? Not entirely: There are still deep inequalities among the countries that benefit from those resources and the quality of financing. In fact, the world’s poorest countries, and above all the world’s poorest citizens, are getting a shrinking share of global financial resources. Most of the people in Africa, which is home to over 50% of the world’s extreme poor, are in danger of being left behind.

With that, here are five facts from the report that can help you understand the situation:

1. Aid is not being given to the countries that need it most.

The share of global aid that went to the world’s least-developed countries dropped from 32% in 2013 to 28% last year. Additionally, the share of aid to Africa declined from 33% in 2015 to 32% in 2016.

2. In fact, an increasing share of the money is staying within the donor countries.

DAC donors — an international forum of many of the largest funders of aid — spent $15.4 billion on supporting refugees and asylum seekers in their own countries in 2016, an increase of 27% from the previous year. (Although countries should definitely support refugees seeking shelter and safety, this money shouldn’t count as overseas development assistance.)

3. Most African countries are also falling short on their commitments to invest their own resources in areas like health, education, and agriculture — which are critical when a large proportion of the population is living in extreme poverty.

Many of the African fragile states or least-developed countries will need to increase spending on education by roughly 20%, on health by nearly 50%, and on agriculture by more than 100% from current levels in order to meet previous commitments.

4. Private finance — both domestic and international — will play a key role in supporting a sustainable long-term economic base for taxation, jobs, and inclusive growth.

Businesses and enterprises of all sizes have a role to play in the fight for sustainable development. But investment in Africa has been volatile and unevenly distributed. Just six countries accounted for 75% of the foreign direct investment inflows into Africa’s least developed countries and fragile states in 2016: Angola, Egypt, Nigeria, Ethiopia, Mozambique and Congo.

5. But private finance can’t take the place of public investment.

Overseas development assistance is crucial to fighting extreme poverty and is still a really important resource for the most vulnerable countries.

In 1990, approximately 35,000 children on average died every day from preventable and treatable diseases. Twenty five years later, that number has nearly been cut in half! Over that same period, nearly 1.1 billion people worldwide have been lifted out of extreme poverty. A remarkable partnership between aid donors, foundations, government leaders, civil society, and private sector innovation has been fundamental to these achievements — and we shouldn’t progress slip now. Read the 2017 DATA Report for the full story.

Join the Conversation

Comment Guidelines

Related Articles