Spain's aid budget is rising — but has a long way to go

Much of the global development sector is heading to Sevilla, Spain, next week for the Fourth International Conference on Financing for Development, or FfD4. And while Spain is not known as a major provider of official development assistance, it has not been cutting its aid budget, setting it apart from most deep-pocketed donor countries across the Western world. Instead, over the last three years, the Spanish Agency for International Development Cooperation, or AECID, has doubled its annual budget to €708 million in grants and added nearly €400 million in annual lending capacity. “We are growing, we are bucking the trend in a way,” Antón Leis García, AECID’s director, told Devex in a phone interview. While still a relatively small donor, Spain is one of the few countries putting more money, instead of less, into development. South Korea and Italy are other notable examples. It has a big gap to fill: The financing shortfall in the bid to achieve the Sustainable Development Goals is estimated to be between $2.5 trillion and $4 trillion every year, according to a 2024 report by the United Nations. Meanwhile, overseas development assistance, or ODA, has been gutted thanks to the Trump administration’s near-total suspension of disbursement by the United States Agency for International Development, alongside a slew of aid cuts from the United Kingdom, France, Germany, Switzerland, and others. While AECID’s budget has grown, it’s also been shying away from the role of traditional donor, increasingly positioning itself as a “broker” that links countries, multilateral organizations, private investors, and civil society, rather than implementing its own projects. Half of the agency’s financing now flows through private sector channels through impact investment, García said. However, financing for development is about “much more than ODA,” according to García. While bilateral aid will remain an important source of development finance, he said, the world has changed — and the FfD4 agenda in Sevilla will reflect that, showcasing new partnerships that blur conventional global north-south donor divisions, he said. “The world when all of this aid business was invented 60 years ago was divided into two worlds — developed countries and developing countries,” García said. “But now we are seeing much more diversity and so we need to reframe and build new narratives to say, ‘this is not just about aid, it’s about partnerships; it’s not about some countries giving handouts but rather everyone tapping common challenges.’” Civil society groups have welcomed Spain’s efforts, but said there is a long way to go. The country is still far from meeting the target to spend 0.7% of gross national income on aid by 2030, which was enshrined in law in 2023. Spain is currently spending 0.24% of GNI on aid. “While AECID’s initial budget was relatively modest and there is still ample room for growth, its recent efforts demonstrate that increasing ODA and strengthening frameworks is achievable,” Rosaria Arbore, board member of the Spanish development NGO coordination platform La Coordinadora, told Devex. “Donor countries are not confined to cuts; progress is both possible and imperative. This stance gained traction ahead of FfD4 and must be firmly upheld moving forward,” Arbore added. Lee Crawfurd, senior research fellow at the Center for Global Development, agreed that Spain’s example is positive and praised the country for channeling a lot of money through multilateral organizations, “which is sensible in general and particularly sensible for a smaller donor, reducing the burden on recipients of dealing with many donors,” he wrote to Devex. However, he pointed out that not all of Spain’s aid money is going where it is most needed. “Of Spain's bilateral spending most goes on refugee costs in Spain, and on Latin America, the latter of which makes obvious sense, but does mean less goes on the lowest-income countries,” Crawfurd wrote.