Germany is cutting aid. But why is it doing so, and what does it mean? In today’s newsletter, we explore those questions, and which other European countries are also making cuts.
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Deep cuts
Germany is planning to cut nearly €1 billion from its main development funder, BMZ, and more than €1 billion from its humanitarian aid budget next year.
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It would be the second year of deep funding cuts. Germany also cut €1.7 billion from BMZ and more than €400 million from humanitarian aid this year.
The cuts to aid are part of a wider reduction in the German budget, but aid has seen steeper reductions than other departments.
There has been a perception within Germany that the country was spending more than its fair share on aid; last year, Germany was the only one of the Group of Seven advanced economies to hit the OECD target of spending 0.7% of its gross national income on official development assistance. With the right-wing Alternative for Germany, or AfD, party growing in influence, aid has been vulnerable to cuts.
One of the sharpest cuts has been to a fund for NGOs, which saw its €1.04 billion budget reduced to €645 million.
Read: Germany plans billions in cuts to development, humanitarian aid (Pro)
Germany is not alone, however. French aid cuts are also on the horizon, while the United Kingdom has continued to divert more and more spending to housing asylum-seekers.
Read: UK aid to hit 17-year low with ‘significant new cuts’ feared
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Funding activity
We publish tenders, grants, and other funding announcements on our Funding Platform. Here are some of the ones which have been viewed the most in the past 10 days.
The African Development Bank has allocated $102.8 million to foster sustainable agricultural value chains in Guinea, Senegal, and Togo.
The Asian Development Bank has approved a $320 million loan for road rehabilitation in Pakistan.
The Asian Development Bank is also seeking a consulting firm to develop e-learning courses for its environmental and social framework.
German funder BMZ, co-financed by the European Union and Swiss agency SECO, intends to award up to €50,000 to 12 organizations to promote citizen engagement in Ghana.
UNOPS has opened a grant competition to help mitigate the impact of climate change.
The World Bank Group will provide a $70 million grant to help improve access to basic services and climate-resilient infrastructure in the Central African Republic.
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Clouds on the horizon
The climate emergency continues, but funding continues to be only a fraction of what is needed. Devex identified 10 countries at high risk of climate change. We then compared the funding they are currently receiving with what is needed.
In most cases there was a vast gap between the two numbers, with funding needs in the billions while contributions were in the tens or hundreds of millions.
Read: What climate finance is flowing to the most vulnerable countries? (Pro)
Meanwhile, there appears to have been relatively little progress on agreeing who will pay what in coming years. With the 29th United Nations Climate Change Conference, or COP 29, on the horizon, country delegations met in Baku, Azerbaijan, where the conference will be held, to try and thrash out the amount that rich countries should contribute to the new collective quantified goal, the main vehicle for the next round of climate finance.
Countries have been told they must spend trillions, but there seems to be little appetite for wealthy nations to contribute much more than the current $100 billion a year.
Read: Latest global climate finance goal talks ‘still stuck’ on dollar amount
Local policy
USAID has published a long-awaited policy on locally led humanitarian assistance, which outlines how it will attempt to tackle one of its thorniest funding challenges.
For years, donors have talked about the need to have local organizations deliver more humanitarian emergency work. Despite Grand Bargain commitments to channel a quarter of all humanitarian funding to local organizations, just 1.2% of money went to those groups in 2022.
One of the policy’s key proposals involves working with local groups before disasters occur, so that when USAID needs to fund humanitarian work in a new location, it has a ready-made body of organizations it can quickly engage with.
Read: USAID launches a policy to drive locally led humanitarian response (Pro)
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Does the Summit of the Future have a future?
Next week is the high-level week of the United Nations General Assembly — one of the biggest events on the development calendar. And this year, U.N. Secretary-General António Guterres has introduced an additional major event to try to cement his legacy — the Summit of the Future.
The summit will address a whole host of contentious issues, from the U.N. Security Council to reproductive health and rights to the relationship between the rich and poor.
But the summit badly needs a bit of star power to boost its profile. Will U.S. presidential hopeful Kamala Harris provide it?
Devex Senior Global Reporter Colum Lynch got together with a group of experts to look at what we might expect.
Read: UN Future Summit could use a Kamala bump (Pro)
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About the author
David Ainsworth@daveainsworth4
David Ainsworth is business editor at Devex, where he writes about finance and funding issues for development institutions. He was previously a senior writer and editor for magazines specializing in nonprofits in the U.K. and worked as a policy and communications specialist in the nonprofit sector for a number of years. His team specializes in understanding reports and data and what it teaches us about how development functions.
