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New data from the OECD Development Assistance Committee show that development aid reached a new peak of US$142.6 billion in 2016, an increase of 8.9% from 2015.

However, bilateral aid to the LDCs fell by 3.9% in real terms from 2015 and aid to Africa fell 0.5%, as some DAC members backtracked on a commitment to reverse past declines in flows to the poorest countries.

11 April 2017: The latest official data released by the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) show that development aid reached a new peak of US$142.6 billion in 2016, an increase of 8.9% from 2015 after adjusting for exchange rates and inflation. Although increased aid for refugees in donor countries boosted the total, the Organization notes, when stripping out refugee costs aid still rose by 7.1%, having doubled in real terms (up 102%) since 2000.

Despite this progress, the 2016 data show that bilateral aid to the least developed countries (LDCs) fell by 3.9% in real terms from 2015, and aid to Africa fell 0.5%, as some DAC members backtracked on a commitment to reverse past declines in flows to the poorest countries, the report notes. Humanitarian aid rose by 8% in real terms in 2016, to US$14.4 billion.

Overall, total net ODA rose in 22 donor countries in 2016, with the biggest increases in the Czech Republic, Germany, Italy, Poland, Slovak Republic, Slovenia and Spain. ODA fell in seven countries, with the largest declines seen from Australia, Finland, the Netherlands and Sweden. The Netherlands decline brought its ODA level below the UN target of 0.7% of GNI, while Denmark, Germany, Luxembourg, Norway, Sweden and the UK met the target. Of the several non-DAC members who report their aid flows to the OECD body, the United Arab Emirates posted the highest ODA/GNI ratio in 2016 at 1.12%. OECD says contributions by DAC donors to multilateral organizations rose by nearly 10% in real terms, which makes the share of multilateral aid to bilateral aid approximately 50%-50%.

Upon the release of the data, DAC Chair Charlotte Petri Gornitzka expressed hope the rising trend will continue, but said much of the latest increase is in humanitarian aid and spending on refugees in donor countries. While these are highly important, she said, “we must ensure that we also maintain financing of long-term development programmes, especially in the least developed nations.”

ODA spending to host refugees inside donor countries jumped by 27.5% in real terms from 2015, which equates to 10.8% of total net ODA, up from 9.2% in 2015 and 4.8% in 2014. Australia, Japan, Korea and Luxembourg did not count any refugee costs as ODA in 2016, but 11 countries spent over 10% of their ODA on refugees. Among them, Austria, Germany, Greece and Italy used over 20% of ODA for refugee costs.

A 1988 DAC rule allows donor countries to count certain refugee expenses as ODA for the first year after their arrival. Noting that many donor countries “have seen unprecedented inflows of refugees” in the last two years, the OECD announced that the DAC is currently working to clarify its ODA reporting rules to ensure that refugee costs “do not eat into funding for development.”

OECD Secretary-General Angel Gurría said ODA makes up more than two thirds of external finance for LDCs, and the DAC is pushing for it to be better used as a lever to generate private investment and domestic tax revenues in poor countries, in order to help achieve the Sustainable Development Goals (SDGs) by 2030. He noted “cause for concern” about recent signals from some donor countries on future aid levels, but observed that “major donor nations have committed to refocus their efforts on the LDCs,” and invited countries to turn these commitments into action. [OECD Press Release] [Detailed text on 2016 ODA data] [Complete data tables] [In-donor refugee costs in ODA reporting] [SDG Knowledge Hub Story on 2017 OECD Global Forum on Development]

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