OECD reveals humanitarian aid in 2018 decreased for world’s neediest countries

OECD reveals humanitarian aid in 2018 decreased for world’s neediest countries

Foreign aid from official donors in 2018 fell 2.7% from 2017, with a declining share going to the neediest countries according to preliminary data collected by the OECD. The drop is likely due to less aid being spent on accommodating refugees as arrivals slowed and stricter rules on refugee spending were put in place.

Official development assistance (ODA) from the OECD’s Development Assistance Committee (DAC) totalled US$153 billion in 2018. This figure was calculated using a new “grant-equivalent” methodology adopted for 2018 as a more accurate way to count the donor effort in development loans. However, under the old methodology which calculated the 2017 total, “cash-flow basis”, 2018 ODA equalled US$149.3 billion, down 2.7% in real terms from 2017.

Using the old methodology to compare 2018 ODA to 2017, it is revealed that bilateral ODA to the least-developed countries fell by 3% in real terms, aid to Africa fell by 4%, and humanitarian aid fell by 8%.

OECD Secretary-General, Angel Gurría, said:

“This picture of stagnating public aid is particularly worrying as it follows data showing that private development flows are also declining. Donor countries are not living up to their 2015 pledge to ramp up development finance and this bodes badly for us being able to achieve the 2030 Sustainable Development Goals.”

The figure falls short even if we use the new methodology. 2018 ODA is equivalent to 0.31% of DAC donors’ combined gross national income, well below the target ratio of 0.7%. Only five DAC members achieved the target of 0.7% - Denmark, Luxembourg, Norway, Sweden, and the United Kingdom.

The change between methodologies occurred as the DAC agreed it would provide a more realistic and transparent comparison between grants, which made up 83% of bilateral ODA in 2018, the other 17% going as loans.

Previously, the full face value of a loan was counted as ODA and repayments were progressively subtracted. The new, grant-equivalent methodology means only the grant portion – the amount given away under market rates – counts as ODA. This means that donors can only provide loans to the poorest countries on extremely generous terms – conversely, this makes it difficult to make a direct comparison between ODA from 2018 and any prior year.

DAC Chair, Susanna Moorehead, said:

“Less ODA is going to least-developed and African countries, where it is most needed. This is worrying. This new grant-equivalent methodology is a more accurate and transparent way of measuring donor effort.  It is also designed to incentivise donors to send the most concessional loans, and more grants, to the countries that need them most.”

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Photo: BRAC/Kamrul Hasan

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