What is Official Development Assistance?
Official development assistance (ODA) is financial aid provided by governments and other official organizations to developing countries, with the primary goal of promoting economic development and reducing poverty. ODA is typically provided in the form of grants or low-interest loans, and can be used for a wide range of purposes, including infrastructure development, healthcare and education initiatives, and disaster relief.
The Development Assistance Committee (DAC) is a group within the OECD that aims to promote development cooperation and reduce poverty in developing countries. One of the key ways in which the DAC supports development cooperation is through the provision of official development assistance (ODA). The DAC tracks and reports on the flows of ODA from donor countries to recipient countries, and works to ensure that ODA is used effectively and transparently to support development objectives. The DAC currently has 31 members, listed below:
Who can receive Official Development Assistance?
The DAC defines ODA and sets guidelines and standards for its provision, and also maintains a list of countries and territories that are eligible to receive ODA, known as the DAC List of ODA Recipients.
The DAC List of ODA Recipients includes countries that are considered to have a low or lower-middle income, as well as some middle-income countries that are considered to be particularly vulnerable. In general, ODA is intended to be provided to countries that are in need of financial assistance in order to achieve the United Nations’ Sustainable Development Goals (SDGs) and to reduce poverty. However, the specific criteria for determining which countries are eligible to receive ODA can vary among donor countries and organizations.
The table below shows the current list, effective for 2022 and 2023, which counts a total of 140 countries and territories. The list includes all the Least Developed Countries, as defined by the United Nations, as well as other low and middle income countries below a certain threshold of gross national income:
In addition to countries and territories, multilateral institutions such as the World Bank and United Nations agencies can also receive ODA. These institutions are typically involved in providing development assistance to recipient countries and may also receive ODA in order to support their efforts.
How much was ODA was granted in 2022?
Official development assistance (ODA) reached a total of $204 billion in 2022, according to preliminary data from the OECD. This marks an increase of 13.6% in real terms from 2021. The primary driver of this growth was a surge in spending on processing and hosting refugees within donor countries, which rose to $29.3 billion, accounting for 14.4% of ODA, compared to $12.8 billion in 2021. Excluding these “in-donor” refugee costs, 2022 ODA still experienced a 4.6% growth in real terms over 2021.
Another contributing factor to the increase in foreign aid was a substantial rise in aid to Ukraine following Russia’s invasion. In 2022, ODA to Ukraine totaled $16.1 billion, a significant increase from $918 million in 2021, which included $1.8 billion in humanitarian aid.
The chart below shows the total amount of ODA from 1990 to 2022, in constant 2020 USD prices to adjust for inflation and exchange rate fluctuations. Over time, ODA has increased significantly, and compared to 2000 ODA has increased by around USD 130 billion (160%). Since 2015 and the adoption of the Sustainable Development Goals, ODA has increased by over USD 60 billion (41% increase).
Measured in monetary terms, the United States was the largest donor of official development assistance in 2022 followed by Germany and the EU institutions.
Overall, there is an upward trend in the amount of official development assistance provided by most of the donor countries listed. Select a country from the list below to see detailed developments over time.
How much ODA was given as percentage of donor gross national income?
First adopted by the UN General Assembly in 1970, a 0.7% target for official development assistance (ODA) has been set as a global commitment made by member countries of the United Nations to provide a certain level of financial aid to developing countries. The target calls for developed countries to allocate a minimum of 0.7% of their gross national income (GNI) to ODA in order to promote economic development and reduce poverty in developing countries.
In other words, the 0.7% target is a goal for how much money developed countries should give to developing countries to help them improve their economies and reduce poverty. The 0.7% target is not a legally binding requirement, but it is widely endorsed by UN member countries and is considered to be an important benchmark for measuring progress in development assistance. The goal is to provide a minimum level of assistance that is needed to help developing countries achieve the United Nations’ Sustainable Development Goals (SDGs), which include goals such as ending extreme poverty, improving health and education, and protecting the environment.
According to data from the OECD, the total ODA provided by DAC (Development Assistance Committee) member countries as a percentage of their GNI was 0.36% in 2022. In recent years, the share has increased and is currently at its highest ever recorded level, yet still significantly below the 0.7% target.
While some DAC countries have consistently met or exceeded the 0.7% target in recent years, others have consistently fallen short. In order to meet the 0.7% target, many DAC countries would need to significantly increase their levels of ODA.
The latest data shows that only 5 countries hit the UN 0.7% aid spending target in 2022: Denmark, Germany, Luxembourg, Norway and Sweden.
To explore further the trends on ODA in percent of GNI over time, select a country from the chart below:
How much of ODA was COVID-19 related?
In 2020 and 2021, COVID-19 assistance made up a significant share of the Official Development Assistance.
In 2020 donors spent a total of USD 16.6 billion on COVID-19 related activities, increasing to 18.7 billion in 2021. In 2021, this accounted for over 10% of all ODA.
In addition, donations in the form of COVID-19 vaccines amounted to USD 6.3 billion in 2021, an amount which equates to nearly 857 million vaccine doses.