Brussels, 18 July 2022
The EU and its 27 Member States continued increasing their Official Development Assistance (ODA) for partner countries around the world to €70.2 billion in 2021, as confirmed by the Annual Report to the European Council on EU Development Aid Targets approved by the Council today. This represents a 4.3% increase in nominal terms and the equivalent to 0.49% of collective Gross National Income (GNI), according to preliminary figures published by the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD-DAC). The EU and its Member States, working together as Team Europe, thereby confirm their position as the world’s leading donor, providing 43% of global ODA. They are determined to meet their collective commitment to provide at least 0.7% of collective GNI as ODA by 2030. This will contribute to the successful implementation of the Global Gateway strategy.
Commissioner for International Partnerships, Jutta Urpilainen, said:
In 2021, Team Europe increased once again its development assistance at a crucial time when our partner countries not only face long-term global challenges, but also the immediate consequences of Russia’s war of aggression against Ukraine. Despite difficult circumstances, we remain committed to the Sustainable Development Goals. To achieve our objectives, we need to use our resources in a more strategic and effective way. Our Global Gateway strategy, delivered through the Team Europe approach, is the way forward to make Official Development Assistance not just a significant financing source to achieve the SDGs, but also an impactful tool to leverage private investment to achieve the necessary scale of financing for development.
Overall, 22 Member States increased their ODA in nominal terms last year compared to 2020, with the strongest nominal increases coming from Germany (+€2 064 million), Italy (+€1 360 million) and France (+€668 million), and further increases coming from Austria, Belgium, Bulgaria, Croatia, Czech Republic, Denmark, Estonia, Finland, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Poland, Portugal, Romania, Slovakia, Slovenia and Spain.
The ODA provided by EU institutions (the European Commission and the EIB) decreased by €1.1 billion (-6.3%) overall in 2021 in nominal terms to €16.1 billion, mainly due to repayments on private sector loans as well as the frontloading of payments in 2020 which ensured rapid support to partner countries in the response to the COVID-19 pandemic. 2020 has been an exceptional year with a peak in EU institutions’ ODA, and their ODA of 2021 still shows a substantial increase compared to the 2019 level.
The EU and its Member States perform significantly above the average of non-EU DAC donors in terms of their ODA as a share of GNI, standing at 0.49% compared to 0.26% by the aggregate of all non-EU DAC donors.
Background
The Team Europe ODA figures are based on preliminary information reported by all the EU Member States, except for Cyprus this time, to the OECD, pending detailed final data to be published by OECD by the end of 2022. The ODA figures are reported on a grant equivalent basis in line with OECD methodology.
EU collective ODA consists of the total ODA spending of EU Member States and the ODA of the EU institutions not attributed to individual Member States or the UK (notably own resources of the European Investment Bank and special macro-financial assistance loans on a grant equivalent basis).
In May 2015, the European Council reaffirmed its commitment to increase collective ODA to 0.7% of EU collective GNI by 2030. Since 2015, on a flow basis, ODA by the EU and its current 27 Member States has grown by 44% (€22.4 billion) in nominal terms while the ODA/GNI ratio has increased by 0.09 percentage points.
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Source – EU Commission
EU Commission Q&A: Preliminary Figures on 2021 Official Development Assistance
What do the figures show?
Preliminary OECD figures show that Official Development Assistance (ODA) provided by the European Union and its Member States has reached €70.2 billion in 2021 on a grant equivalent basis, representing 0.49% of EU Gross National Income (GNI). This is significantly above the 0.26% average of non-EU countries that are members of the Development Assistance Committee (DAC). It confirms Team Europe as the leading provider of ODA in 2021, providing 43% out of the global ODA from Team Europe and all other donor countries.
Compared to 2020 levels, EU collective ODA in 2021 has increased by €2.9 billion (4.3%) in nominal terms. ODA as a share of GNI has decreased from 0.50% to 0.49% between 2020 and 2021.
The EU is collectively committed to providing 0.7% of Gross National Income (GNI) as ODA within the timeframe of the 2030 Agenda. Four EU Member States already met or exceeded the 0.7% target of ODA as a share of GNI in 2021: Luxembourg (0.99%), Sweden (0.92%), Germany (0.74%) and Denmark (0.70%). Six Member States increased their ODA relative to their GNI by at least 0.01 percentage points: Austria, Croatia, Hungary, Italy, Slovenia and Spain. In eight Member States, ODA as a share of GNI decreased by at least 0.01 percentage points: Belgium, Denmark, France, Greece, Luxembourg, Malta, Netherlands and Sweden.
Since 2015, on a flow basis, ODA by the EU and its current 27 Member States has grown by 44% (€22.4 billion) in nominal terms, while the ODA/GNI ratio has increased by 0.09 percentage points.
Why did EU collective ODA relative to GNI decrease in 2021 compared to 2020?
There was a slight decrease of the ratio from 0.50% in 2020 to 0.49% in 2021 despite the nominal increase in the ODA volume. This was because the nominal increase in EU collective ODA (+4.3%) was not commensurate with the high nominal increase in GNI (+7.6%) due to the economic recovery from the COVID-19 pandemic.
What do the figures show regarding ODA managed by the EU institutions?
ODA from EU institutions (European Commission and EIB) decreased by €1.1 billion (-6.3%) in 2021 compared to 2020 in nominal terms, standing at €16.1 billion. European Commission-managed ODA amounted to €15.1 billion, including €1 billion of special macro-financial assistance loans on a grant equivalent basis. EIB-managed ODA stood at €1 billion.
The decrease in EU institutions’ ODA is mainly due to repayments on private sector loans as well as the frontloading of payments in 2020, which ensured rapid support to partner countries in the response to the COVID-19 pandemic. 2020 has been an exceptional year with a peak in EU institutions’ ODA, and their ODA of 2021 still shows a substantial increase compared to the 2019 level.
Which share of global ODA does the EU account for?
The EU collective accounted for 43% of global ODA in 2021. Global ODA is defined here as including the ODA provided by the EU collective and all other DAC and non-DAC donor countries. The EU and its Member States thereby consolidate their position as the world’s leading donor of development assistance.
In 2020, the EU collective also accounted for 43% of global ODA based on this definition.
In previous years, it was indicated the share of EU collective ODA out of the total ODA by the EU collective and all other DAC donors (not including other non-DAC donors) which amounted to 46% in 2020 and would still amount to 46% in 2021.
The change to 43% in the present press release does therefore not constitute a decrease, but is due to the change of method, now using a more comprehensive scope of total ODA.
How does the EU compare with the rest of the DAC donors regarding the share of GNI?
The EU and its Member States perform significantly above the average of non-EU DAC donors in terms of their ODA as a share of GNI, standing at 0.49% compared to 0.26% by the aggregate of all non-EU DAC donors.
When indicating the evolution in Member States’ individual shares of ODA out of GNI, how are increases and decreases defined?
When highlighting the Member States which increased or decreased their ODA as a share of GNI, only cases where the change amounts to at least 0.01 percentage points (based on exact rather than rounded values) are taken into account. Member States for which the change is smaller than 0.01 percentage points in either direction are considered to have kept their ODA as a share of GNI stable.
What is the EU performance regarding the ODA to Least Developed Countries target?
The EU and its Member States are committed to give collectively between 0.15% and 0.20% of the EU GNI to Least Developed Countries (LDCs) in the short term and 0.20% by 2030. In 2020, EU collective ODA to LDCs from the EU and its 27 Member States reached €16.3 billion, i.e. 0.12% of GNI, thereby not meeting the short-term target.
These figures are not directly comparable to previous years’ data due to a change in the official OECD methodology, which now additionally includes the element of regional ODA known to benefit LDCs (not measured in the past). Based on the old methodology, EU aggregate ODA to LDCs from the EU and its 27 Member States would have theoretically stood at €15.4 billion (also 0.12% of GNI) in 2020, a nominal increase in volume by 11% (€1.6 billion) from 2019. Individually, 5EU Member States met or exceeded this 0.15% threshold of ODA to LDCs/GNI in 2020: Luxembourg (0.48%), Sweden (0.35%), Denmark (0.21%), Belgium (0.16%) and Germany (0.15%).
Data for ODA to Least Developed Countries (LDCs) for 2021 is expected to be published by OECD by the end of 2022.
The EU collective ratio of ODA to LDCs out of GNI (0.12%) is still significantly above the average GNI ratio for ODA to LDCs of non-EU DAC members, which stood at 0.08% in 2020.
Methodological background for the calculation of ODA to LDCs
In the past up to 2019 data, the EU Member States’ aggregate ODA to LDCs was calculated by adding up Member States’ bilateral net ODA to LDCs and their imputed multilateral ODA to LDCs, thus avoiding double-counting with the EU institutions’ ODA to LDCs which mostly includes Member States’ imputed multilateral ODA to LDCs channelled through EU institutions.
For 2020 data, OECD-DAC introduced a new, additional element into the methodology for calculating total ODA to LDCs: regional ODA known to benefit LDCs. As EU institutions’ regional ODA known to benefit LDCs is not included in Member States’ imputed multilateral ODA to LDCs, their regional ODA known to benefit LDCs (excluding the amount that could be imputed back to the United Kingdom), amounting to €798 million, is taken into account in the EU collective ODA to LDCs of 2020.
Besides EU institutions, 2 Member States have reported regional ODA known to benefit LDCs: France (€17 million) and Germany (€82 million). The regional ODA known to benefit LDCs included in the EU collective ODA to LDCs therefore accounts for €897 million overall.
For reference, in 2019, the aggregate ODA to LDCs of the 28 Member States, and of 27 of the EU’s Member States (with the exception of the UK), stood at 0.12% of GNI (€19.0 billion) and 0.10% of GNI (€13.8 billion), respectively. For comparison, the aggregate ODA to LDCs of the 27 Member States in 2020, based on the previous methodology, would have theoretically stood at 0.12% of GNI (€15.4 billion), a nominal increase in volume by 11.3% from the EU aggregate, with the exception of the UK, in 2019.
What is the EU performance regarding ODA to Africa?
Data for ODA to Africa for 2021 is expected to be published by OECD by the end of 2022. In 2020, the 27 Member States’ aggregate ODA to Africa increased by 18% in nominal terms compared to 2019, reaching €23.4 billion. As a share of the 27 Member States’ total aggregate ODA to developing countries, 36% went to Africa in 2020.
Will ODA be enough to implement the 2030 Agenda?
A mix of financial and non-financial resources are required to implement the 2030 Agenda, especially in the wake of the COVID-19 pandemic. In line with the Addis Ababa Action Agenda, the EU supports a comprehensive and integrated approach to mobilising financing from all available sources to meet the SDGs, including by further expanding its financial toolbox.
As public funds alone will not be sufficient to support the implementation of the SDGs, the EU is committed to scale up sustainable finance, accelerating private financial flows for sustainable investments in our partner countries, leaving no one behind. In addition, the European Fund for Sustainable Development Plus (EFSD+) will make available nearly €40 billion of guarantee cover to reduce the risk of investment in partner countries and support their sustainable development. This is enhanced by closer cooperation with Team Europe partners, which should lead to more complementarity, synergies, and multiplier effects, in line with the Council Conclusions on the European Financial Architecture for Development.
What is the added value of Total Official Support for Sustainable Development (TOSSD)?
ODA figures are a key indicator of progress towards the 2030 Agenda. As an important step towards achieving more transparency on all sources of finance for sustainable development, Total Official Support for Sustainable Development (TOSSD) has been recognised by the UN Statistical Commission as a new data source that is able to reflect the complexity of the existing financing landscape in tracking support provided to the SDGs. This includes all officially supported resources for the SDGs, such as South-South cooperation, support to global public goods as well as private finance mobilised by official interventions.
Why has there been a methodological change starting from 2018 ODA figures?
The OECD-DAC decided on a new methodology to calculate the ODA value of concessional loans in 2016. It was applied for the first time in 2019 to 2018 data for official loans and loans to multilateral institutions.
The new “grant equivalent method”, reports the grant equivalent of loans calculated on the basis of the donor effort. The methodology assigns a percentage to each concessional loan on the basis of several parameters (risk of default measured ex-ante depending on the beneficiary country income group, duration of the loan, interest rate, grace period). This percentage (the so-called grant element”), is applied to the amount of the loan to calculate the “grant equivalent”, i.e. the “gift portion” of the loans, which is now recorded in OECD-DAC statistics. For now, this system only applies to loans to the sovereign sector and multilateral organisations as well as debt relief (the latter only starting from 2020 data). A grant equivalent measure for the use of private sector instruments has not yet been agreed -and the cash flow method is still used.
In the past “cash flow basis”, the actual flows of cash between a donor and a recipient country were recorded and a loan was recorded at “face value” as ODA, but subsequent repayments by countries were then subtracted as negative ODA, so that loans ultimately produced zero net ODA, except in the case of a default. With the new methodology, reflows are not counted.
The new system improves the reporting of ODA loans and allows accounting for the efforts made by donors to provide loans depending on their level of concessionality, that is, the level of benefit to the borrower compared to a loan at market rate.
Grant equivalent figures as of 2018 are however not comparable with previous years’ data calculated on a flow basis. Comparisons over time are made possible by applying the previous methodology (on a flow basis) to operations as of 2018.
How are the numbers compiled? Who are they compiled by?
The OECD Development Assistance Committee (DAC) is the ultimate authority that decides if expenditure reported to it (by Member States or other donors) qualifies as ODA.
The DAC is currently composed of 30 members: Australia, Canada, Iceland, Japan, Korea, New Zealand, Norway, Switzerland, United Kingdom and USA, 19 EU Member States and the European Union, which acts as a full member of the committee. 3 EU Member States (Estonia, Latvia and Lithuania) are non-DAC OECD members, while another 5 (Bulgaria, Croatia, Cyprus, Malta and Romania) are neither OECD nor DAC members, out of which 2 (Bulgaria and Romania) are DAC participants.
The European Commission presents individual data on all EU Member States, including on those that are not members of the DAC (except Cyprus, which did not report preliminary ODA data to OECD this time). The EU uses the same current price figures as presented by DAC in the publication of preliminary figures for 2021, (re)converted from USD to EUR using the DAC exchange rate.
There are two differences in analysing the changes in ODA volumes:
- The European Commission presents and analyses data in EUR values, while the DAC uses US Dollars. This exchange rate difference applies for both global figures and individual Member States.
- The European Commission uses values in nominal terms (current prices) for presenting changes. The DAC presents data both in constant prices and nominal terms, but calculates changes only in constant prices and exchange rates.
In addition to the ODA of the EU Member States presented by the DAC, the Commission also presents the EU collective ODA, which is calculated by taking into account all EU Member States’ ODA (including what they channel through EU institutions) and what the EU institutions disburse as ODA, without double-counting and not counting the UK’s ODA channelled through EU institutions when looking at EU27 collective ODA. The ODA provided through the European Investment Bank’s own resources is not imputed to Member States and the UK and is additional to the Member States’ ODA.
Is UK included in the ODA calculation?
Despite its withdrawal from the European Union taking effect on 1 February 2020, the United Kingdom still contributed funding in the form of ODA as an off-budget contribution in 2021. This is included in the EU institutions’ ODA. However, in order to avoid double-counting between the ODA reported as EU collective ODA and the ODA reported by the United Kingdom itself, the United Kingdom’s contribution to EU institutions is not included in what is reported as EU collective ODA.
Why is the data preliminary?
The data presented is based on information that the OECD has received from Member States. Additional information on the details of funds and programmes for 2021 is being reported to and checked by the OECD-DAC over the course of 2022. Final 2021 ODA figures with a detailed breakdown should be published by OECD by the end of 2022.
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