The biggest funding trends from latest donor data

The latest official development assistance data from the Organization for Economic Cooperation and Development provides new insights on funding trends and priorities in development, particularly from countries contributing to the Development Assistance Committee.

Covering 2015, the data released in late December is a source of important value for NGOs and the broader development sector in planning programs and resources as well as identifying areas where private sector partners will need to become a higher value resource in the future.

In our analysis of OECD’s data, Devex has delved into ODA and DAC trends to provide insights into funding changes and issues impacting development programs. We have developed a Tableau insight tool providing a 2015 DAC snapshot, time series information on DAC funding since 1995, analysis features to compare selected donor countries and donor funding profiles by year. DAC recipients can be analysed by developing countries, LDCs and total funding including contributions to multilateral organizations. Below are a few of the insights that stand out from the latest data.

Has ODA peaked?

After current price data increased sharply since 2012, 2014 was a peak year for ODA from DAC, non-DAC and multilateral donors. Total funding, including donations to developing countries and multilateral organizations, peaked at $137.4 billion from DAC countries, $43.7 billion from multilateral donors and $24.7 billion from non-DAC countries.

2015 saw donations in current prices from all three sources slide. Non-DAC donor contributions dropped a massive 29 percent followed by multilaterals (5 percent) and DAC donors (4 percent).

Of the 28 DAC countries OECD provides data for, only 10 saw their total ODA increase in 2015 with funding from countries reaching peak levels. These included Germany ($17.9 billion), Korea ($1.9 billion), Sweden ($7.1 billion) and Switzerland ($3.6 billion).

In constant prices, OECD report the 2015 figures as a 6.6 percent increase on ODA provided by DAC countries in 2014.*

Declining funding

The 2015 donor current price data trends downward, revealing record 20 year lows in funding from a number of DAC countries. Spain plunged to record lows for ODA to developing countries, Austria set a 20-year low for funding to LDCs, while Portugal plunged to new lows for funding both to LDCs and all developing countries.

Regional South of Sahara suffered the greatest drop in funding from DAC donors in 2015, according to the OECD data, falling by $691 million. Vietnam saw the next-largest decline of $610 million, followed by the West Bank and Gaza Strip (drop of $485 million), Afghanistan (drop of $439 million) and Mexico (drop of $427 million).

In total, 98 of the almost 200 recipient countries and regions OECD collects data for lost funding in 2015, impacting the ability to deliver, manage and monitor development projects within these countries.

Funding for government and civil society projects suffered the greatest decline. DAC donors reduced funding to this sector by $1 billion since 2014. This was followed by population and reproductive health programs (drop of $976 million), business programs (drop of $926 million), post-secondary education (drop of $631 million) and social infrastructure and services (drop of $540 million)

In funding to program sectors for aid funding from DAC donors, unallocated or unspecified funding saw the biggest leap, growing $6 billion between 2014 and 2015.

Meanwhile, funding specifically for developing countries from DAC members dropped by $519 million between 2014 and 2015. Non-DAC donors dropped funding by $6.5 billion to developing countries while a $2.1 billion loss was reported from multilateral organizations.

LDCs saw funding from DAC donors fall by $1.4 billion and by $855 million from multilaterals. Non-DAC funding to LDCs did provide some hope; contributions rose rapidly from $581 million in 2014 to $1.9 billion in 2015.

ODA winners

There are some winners in the data.

Ukraine topped recipient countries, receiving a funding boost of $302 million to take their total support from DAC donors to $1.1 billion in current prices. Democratic Republic of the Congo showed the next largest growth, with a DAC funding boost of $244 million, followed by the Syria ($236 million), Lebanon ($229 million) and Liberia ($228 million). Egypt additionally saw ODA funding increase by a factor of 63 from $2 million in 2014 to $126 million in 2015.

Among ODA program sectors, 2015 saw DAC donors place importance on growth in transport and storage, providing a funding boost of $871 million in current prices. This was followed by an increase of $671 million in funding for multisector programs, $561 million for water supply and sanitation, $541 million for basic health and $425 million for energy.

‘Unspecified’ funding

Funding to unspecified sectors and countries has traditionally made up a large portion of DAC donor funding, but in 2015, the “unspecified” category accounted for an even larger percentage of development funding.

With the exceptions of Poland and Portugal, unspecified developing countries or unspecified program sectors topped funding trend lists for DAC countries in 2015. (Poland instead prioritized post-secondary education programs and funding for Ukraine, while Portugal favored social infrastructure and services with Cabo Verde their highest target region.)

ONE Campaign, an advocacy organization focusing on extreme poverty and preventable disease, expressed concern that the data demonstrated much funding was not going beyond the borders of DAC countries — funding refugee support at home is a new trend identified within ODA data.

“Many countries are redirecting their aid — which is meant to fight poverty — toward covering the costs of refugees they are hosting,” Sara Harcourt, policy director of development finance at ONE, said in a statement. “It’s absolutely right that we protect people fleeing war and insecurity, but it is wrong to do this by shifting resources away from the world’s poorest people.”

The concern is that with the growing refugee crisis, 2016 data will continue to show ODA from DAC countries being directed to in-country processing, housing and even detention of refugees.

* Update, Jan. 13, 2016: This article has been updated to clarify that current price data was used in the analysis. According to constant price data, there has been an increase in ODA provided by DAC countries in 2014.

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