2023 global ODA spend inched up with lion’s share going to Ukraine

By Sam Ursu

2023 global ODA spend inched up with lion’s share going to Ukraine

2023 achieved an all-time record of $223.7 billion in Official Development Assistance (ODA), up from $211 billion the year before, the Organization for Economic Cooperation and Development (OECD) said in a preliminary report on ODA spent by the members of its Development Assistance Committee – DAC. This is an increase of 1.8% year-on-year in real terms. The report also revealed that $20 billion, or nearly 10% of the global total ODA, went to the war-torn Ukraine.

According to the report made public on April 11, 2024, DAC members spent a combined total of 0.37% of their Gross National Income (GNI), still far below the 0.7% benchmark, but a significant increase from 2020. Out of the 32 DAC member nations, only five countries in 2023 were able to contribute 0.7% of GNI or more in ODA: Denmark, Germany, Luxembourg, Norway, and Sweden. However, in terms of total aid provided, the five biggest contributors were the United States ($66 billion), Germany ($36.7 billion), Japan ($19.6 billion), Britain ($19.1 billion), and France ($15.4 billion).

ODA as percent of GNI

ODA, USD billions

Source: OECD

For the second year in a row, the lion’s share of global ODA spending by DAC members went to Ukraine. In 2023, Ukraine received a total of $20 billion in development assistance, of which $3.2 billion was in the form of humanitarian aid.

Other key numbers revealed by the OECD report include the fact that global humanitarian aid flows rose by 4.8% in 2023. In contrast, DAC member nations spending on hosting refugees domestically fell by 6.2% to $31 billion in 2023, largely due to the one-year statutory limit on labeling in-donor refugee hosting costs as ODA. Nonetheless, seven nations still spent between 25-34% of their entire ODA budget on hosting refugees in 2023.

“Once again, ODA has been an important, stable, and reliable source of external finance for developing countries. Donors have provided a record level of aid for the fifth year in a row,” said OECD Secretary-General Mathias Cormann in response to the report. “We must remain focused and committed to helping the most vulnerable meet their economic objectives.”

Currently, ODA from DAC nations makes up over two-thirds of external financing for the world’s poorest countries.

“With slower growth and rising debt servicing costs, developing countries are facing fiscal pressures and an increasing risk of debt distress,” said OECD Secretary-General Mathias Cormann. “Going forward, we need DAC nations to ramp up their support for the poorest and most vulnerable countries,” added OECD DAC Chair Carsten Staur.

OECD-DAC ODA spend by the numbers

The following DAC members decreased their ODA spend in 2023 compared to the year prior, almost entirely due to reduced ODA-eligible expenditures for hosting Ukrainian refugees:

  • Austria -4.1%
  • Belgium -0.5%
  • Czech Republic -34.3%
  • Estonia -51.4%
  • Finland -9.5%
  • France -11%
  • Germany -5.8%
  • Greece -16.9%
  • Italy -15.5%
  • Lithuania -1.8%
  • Poland -36.6%
  • Portugal -8.5%
  • Slovakia -9%
  • Slovenia -13.9%
  • Spain -17.4%

In addition to reduced ODA-eligible in-donor refugee hosting expenses, ODA from France and Italy also decreased in 2023 due to sharp reductions in bilateral contributions.

The DAC nations which increased their ODA spend in 2023, compared to the year prior, were:

  • Denmark +10% (to meet the 0.7% GNI benchmark)
  • Ireland +9.7% (due to a legislated increase in their ODA budget)
  • Netherlands +3.1% (increase in aid to Ukraine)
  • Sweden +2.1% (increased contribution to multilateral institutions)
  • Australia +7.6% (due to new bilateral funding for its development programme in 2023 and due to how its financial year reporting cycle is calculated)
  • Iceland +17.1% (increase in its ODA budget)
  • Japan +15.7% (increase in bilateral aid in the form of grants)
  • Korea +10.6% (increase in contributions to multilateral institutions)
  • New Zealand +41.3% (due to its three-year budget cycle)
  • Norway +30.9% (increase in aid to Ukraine)
  • Switzerland +6.9% (increase in its ODA budget)
  • United Kingdom +12.1% (for complex reasons, including the Treasury providing emergency support to offset refugee hosting costs)
  • United States +5.2% (increase in aid to Ukraine)

Non-DAC member nations that also reported to the OECD significant changes in ODA spend in 2023 were:

  • Bulgaria (-30%) due to decreased refugee hosting costs
  • Croatia (+2.2%) due to increased contributions to multilateral institutions
  • Cyprus (+25.6%) due to an increase in bilateral ODA
  • Israel (-19.2%) due to decreased refugee hosting costs
  • Latvia (+57%) due to increased refugee hosting costs
  • Liechtenstein (+23%) due to increases in both bilateral and multilateral ODA
  • Malta (+6.1%) due to increased refugee hosting costs
  • Monaco (+0.1%)
  • Qatar (-18%) due to decreased ODA spend, both bilaterally and multilateral
  • Romania (+27.1%) due to increased refugee hosting costs
  • Taiwan (+7%) due to an increase in both bilateral and multilateral ODA
  • Thailand (-0.8%) due to unspecified reasons
  • Turkey (-16.9%) due to a decrease in both bilateral and multilateral ODA
  • UAE (+26.9%) due to an increase in both bilateral and multilateral ODA

It is important to note that the DAC, in 2023, implemented a new methodology for counting private sector financial instruments as ODA in terms of grant equivalents, although some countries are still transitioning to the new methodology. The provisional total for these private sector financial instruments was $2.9 billion in 2023. A further explanation of this new reporting system can be found here.

The GDP growth rate for OECD countries was +1.7% in 2023, so the 1.8% increase in ODA spend for the year reveals that there was a slight increase in ODA contributions in comparison to GDP. However, in real terms, the ODA disbursements by DAC member nations of $222.2 billion in 2023 was a small decrease of 0.2% in real terms compared to 2022.