Official Development Assistance (ODA) is defined by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) as “government aid that promotes and specifically targets the economic development and welfare of developing countries.” ODA is the main source of financing for development assistance. Mobilizing resources for development has been a central issue since the “Financing for Development” conference of Addis Ababa in July 2015, that provided “a new global framework for financing sustainable development that aligns all financing flows and policies with economic, social and environmental priorities.”[1] Indeed, achieving the 17 Sustainable Development Goals (SDGs) by 2030 as the international community committed to, requires significant funding.

The annual investment need to achieve all 17 SDGs by 2030 is estimated at US$ 5 to 7 trillion / year, of which “US$ 3.3 trillion to 4.5 trillion per year mainly for basic infrastructure, food security, climate change mitigation and adaptation, health, and education.”[2]  The actual investment gap in developing countries, at current investment levels in all SDG-related fields, reaches US$2.5 trillion / year.

Current international investment levels are still falling short of actual commitments to reach 0.7% of GNI: the percentage of Gross National Income (GNI) spent on ODA by DAC members remained at about 0.31% in 2018. Indeed, if net ODA[3] of DAC countries has been multiplied twofold between 2000 and 2017[4], there has been a stabilisation at best, or a decline of official development assistance since 2016: excluding in-country refugees costs (in DAC countries), ODA levels have stalled in 2018 compared with 2017, standing at US$ 149.3 billion[5]. And the share of ODA directed to least developed countries (LDCs[6]), where it is most needed, has decreased by 2.7% and to African countries by 4%!

In parallel, private sector investments have also fell, leaving increasing gaps to cover growing development needs in LICs. Private financial flows mobilised in 2017[7] remain far below expectations of the Addis Ababa Action Agenda.[8] As to philanthropic money, if investments are increasing, they remain modest compared to ODA levels.

The share of ODA directed to multilateral initiatives is increasing, showing the priority given by DAC members to global issues and to preserving public good. The upcoming replenishment conference of the Global Fund to fight HIV/Aids, Tuberculosis and Malaria should confirm this trend. The organisation expects to collect at least US$ 14 billion for the period 2020 to 2022 on this occasion.

ODA trends for:

[1] Third International Conference Financing for Development – 3 – 15 July 2015, Addis Ababa, Ethiopia – https://www.un.org/esa/ffd/ffd3/conference.html
[2] UNCTAD World Investment Report 2014
[3] Official development assistance (ODA) is defined as government aid designed to promote the economic development and welfare of developing countries. Loans and credits for military purposes are excluded. Aid may be provided bilaterally, from donor to recipient, or channelled through a multilateral development agency such as the United Nations or the World Bank. Aid includes grants, “soft” loans (where the grant element is at least 25% of the total) and the provision of technical assistance.
[4] From US$ 72.9 billion to 147.1 billion – Source: OECD (2019), Net ODA (indicator). Doi: 10.1787/33346549-en
[5] OECD statistics, in billion US$, 2017 constant prices, using the cash-flow methodology.
[6] Least developed countries (LDCs) are low-income countries confronting severe structural impediments to sustainable development. They are highly vulnerable to economic and environmental shocks and have low levels of human assets. There are currently 47 countries on the list of LDCs.
[7] US$ 33.9 billion, i.e. less than 25% of official ODA flows.
[8] https://www.un.org/esa/ffd/wp-content/uploads/2015/08/AAAA_Outcome.pdf