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Foreign aid to countries including Ghana in 2017 was $146.6b – OECD

Foreign AidThe total amount of foreign aid from donors in 2017 amounted to $146.6 billion, according to preliminary official data from the Organisation for Economic Co-operation and Development (OECD). The amount it says is a small decrease of 0.6 per cent from 2016 in real terms as less money was spent on refugees inside donor countries. More funds however, had gone to countries most in need, it added.

The report also indicated that aid to Africa rose by 3 per cent to $29 billion and, within that, aid to sub-Saharan Africa was also up 3 per cent to $25 billion.

In 2016 however, Ghana received foreign aid to the tune of $2.9 billion. Figures for 2017 are not yet available, the OECD said in an email to ghanabusinessnews.com.

There are some 142 countries receiving aid including Ghana and they are classified as Least Developed Countries, Other Low Income Countries which has only two countries, the Democratic People’s Republic of Korea and Zimbabwe. The others are Lower Middle Income Countries and Territories which includes Ghana and Upper Middle Income Countries and Territories.

The report notes that when in-donor refugee costs are taken out, the net Overseas Development Assistance (ODA) was up 1.1 per cent from 2016 in real terms (i.e. correcting for inflation and currency fluctuations).

“ODA spent by donor countries on hosting refugees fell by 13.6 per cent to $14.2 billion as refugee arrivals, mainly in Europe, decreased. In-donor refugee costs were 9.7 per cent of total net ODA, down from 11 per cent in 2016,” the report added.

According to the report, bilateral (country to country) aid to least-developed countries increased by 4 per cent in real terms to $26 billion, following several years of declines.

Aid to Africa rose by 3 per cent to $29 billion and, within that, aid to sub-Saharan Africa was also up 3 per cent to $25 billion. Humanitarian aid rose by 6.1 per cent in real terms to $15.5 billion, it added.

“The dip in the headline figure left total ODA from members of the OECD’s Development Assistance Committee (DAC) equivalent to just 0.31 per cent of their combined gross national income, down from 0.32 per cent in 2016 and well below a United Nations target to keep ODA at or above 0.7 per cent of donor GNI,” it said.

Citing a 1988 DAC rule which allows donor countries to count certain refugee expenses as ODA for the first year after their arrival, the report noted that Australia, Korea and Luxembourg did not count any in-donor refugee costs as ODA in 2017 but nine countries spent over 10 per cent of their ODA on refugees – among them, Germany, Greece, Iceland and Italy used over 20 per cent of ODA for in-donor refugee costs.

Overall, total net ODA flows rose in 11 countries in 2016, with the biggest increases in France, Italy, Japan and Sweden. ODA fell in 18 countries, in many cases due to lower numbers of refugee arrivals, with the largest declines seen in Australia, Austria, Greece, Hungary, Norway, Slovenia, Spain and Switzerland, the report said, adding that of the several non-DAC members who report their aid flows to the OECD, the United Arab Emirates posted the highest ODA/GNI ratio in 2017 at 1.31 per cent and Turkey the second-highest at 0.95 per cent.

The report notes that five DAC members – Denmark, Luxembourg, Norway, Sweden and the United Kingdom – met the United Nations target in 2017 for an ODA/GNI ratio of at least 0.7 per cent. Having achieved the target in 2016, Germany slipped back in 2017 to join 24 other DAC donors under the threshold, it said.

According to the report, ODA makes up over two thirds of external finance for least-developed countries, adding that the DAC is pushing for ODA to be better used as a lever to generate private investment and domestic tax revenue in poor countries to help achieve the UN Sustainable Development Goals.

Most ODA is in the form of grants, yet the volume of loans to developing countries rose 13 per cent in 2017. For some donors concessional loans accounted for over a quarter of bilateral ODA, it said.

Commenting, the OECD Secretary-General Angel Gurría said, “It is good to see more money going where it is most needed, but it is still not enough. Too many donors are still far behind the 0.7 per cent target.”

“Supporting developing countries with ODA is the fastest route to spreading stability and inclusive growth and it will be vital for developing countries to achieve the Sustainable Development Goals. Donor countries should be using this time of economic expansion to step up their efforts, both increasing their levels of foreign aid and ensuring it goes to the poorest countries,” he added.

“I am encouraged to see a rise in ODA being spent in least-developed countries and I would like to call on DAC members to continue this effort. We should always be aiming to invest ODA for long-term purposes in countries most in need, and be cautious in using it for loans to middle-income countries,” said DAC Chair Charlotte Petri Gornitzka.

By Emmanuel K. Dogbevi

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