11/04/2017 – Development aid reached a new peak of USD 142.6 billion in 2016, an increase of 8.9% from 2015 after adjusting for exchange rates and inflation. A rise in aid spent on refugees in donor countries boosted the total – but even stripping out refugee costs aid rose 7.1%, according to official data collected by the OECD Development Assistance Committee (DAC).
Despite this progress, the 2016 data show that bilateral (country to country) aid to the least-developed countries fell by 3.9% in real terms from 2015 and aid to Africa fell 0.5%, as some DAC members backtracked on a commitment to reverse past declines in flows to the poorest countries.
Official development assistance (ODA) from the 29 DAC member countries averaged 0.32% of gross national income (GNI), up from 0.30% in 2015, as aid volumes rose in most donor countries. Measured in real terms – correcting for inflation and currency fluctuations – ODA has doubled (up 102%) since 2000.
ODA spent on hosting refugees inside donor countries jumped by 27.5% in real terms from 2015 to reach USD 15.4 billion. That equates to 10.8% of total net ODA, up from 9.2% in 2015 and 4.8% in 2014. Many donor countries have seen unprecedented inflows of refugees in the last two years, and the DAC is working to clarify its ODA reporting rules to ensure that refugee costs do not eat into funding for development. Humanitarian aid rose by 8% in real terms in 2016 to USD 14.4 billion.
2016 saw Germany join five other countries – Denmark, Luxembourg, Norway, Sweden and the United Kingdom – in meeting a United Nations target to keep ODA at or above 0.7% of GNI. The Netherlands slipped back below 0.7% to join 22 other donors under the threshold.
ODA makes up more than two thirds of external finance for least-developed countries and the DAC is pushing for it to be better used as a lever to generate private investment and domestic tax revenues in poor countries, and in turn to help achieve the Sustainable Development Goals by 2030.
“I am pleased to see DAC donors delivering another annual increase in development aid and I hope this rising trend will continue”, said DAC Chair Charlotte Petri Gornitzka. “At the same time, much of this latest increase is in humanitarian aid and spending on refugees in donor countries. While both of these are highly important, we must ensure that we also maintain financing of long-term development programmes, especially in the least developed nations.”
Within 2016 ODA, contributions by DAC donors to multilateral organisations rose by nearly 10% in real terms. The share of multilateral aid (aid provided via multilateral bodies) to bilateral aid (aid is provided directly by one country to another) is now roughly half to half.