Which countries spent the most on aid in 2021?

Last week, the Organisation for Economic Co-operation and Development released preliminary data on 2021 official development assistance — highlighting what donors spent during the second year of the COVID-19 pandemic. Overall, the total aid spending by Development Assistance Committee member countries amounted to $178.9 billion. This is an increase of 4.4% in real terms compared with the previous year. However, the increase is driven by contributions to COVID-19 response. If the amount spent on vaccines is excluded, ODA in 2021 grew by only 0.6%. Here is an initial analysis with some key trends from the data: Just 5 countries make up 69% of all aid The United States remains the biggest donor among the DAC member countries, with $42.3 billion, or 0.18% of its gross national income. This accounts for 23.6% of the total ODA from DAC member countries. U.S. spending is up by $5.1 billion, or 14.4%, from the previous year based on 2020 constant prices. The increase is largely driven by an additional $4.7 billion spent on COVID-19 response. Germany remains the second-biggest bilateral source of aid, with $32.2 billion — a 5.1% increase from the previous year. Other top donors include Japan, with $17.6 billion; the United Kingdom, with $15.8 billion; and France, with $15.4 billion. Together, these five countries represent 69% of the total ODA from DAC member countries. ODA this year was heavily hit by UK cuts Overall, ODA climbed across donors. Out of the 29 DAC member countries, 23 saw an increase in their total development aid spending. Only the U.K., Greece, the Netherlands, Norway, and Sweden recorded a slash, worth a total of $5.9 billion. U.K. ODA dipped by $3.9 billion — the biggest decrease among donors. If the U.K. had increased its aid in line with the 0.7% GNI target, ODA would have been around $6 billion higher, according to analysis by U.K. experts. The aid-to-GNI ratio is rising slowly — but we’re a long way off 0.7% This year, ODA was 0.33% of donors’ combined gross national income, up from 0.32% the year before. But the United Nations’ 0.7% ODA-to-GNI ratio remains elusive, with only five countries meeting the target: • Luxembourg, with 0.99%. • Norway, with 0.93%. • Sweden, with 0.92%. • Germany, with 0.74%. • Denmark, with 0.7%. The U.S. is still giving proportionately less of its income than any of the other 10 largest donors. If the U.S. had hit the 0.7% target, ODA would have passed $300 billion. Bilateral aid is down, multilateral aid is up The bigger portion of aid — worth $120.7 billion, or 67.4% of the total ODA — was channeled bilaterally. This is down 3.3% from the previous year. The U.S. was the biggest source with 78.4% of its ODA, or $33.2 billion, going to bilateral aid in real terms. Australia ranked first in terms of percentages, with 89.1% of its ODA — or $3.1 billion — going bilaterally. Other large donors include Germany, with $23.3 billion; Japan, with $13.2 billion; the U.K., with $8.8 billion; and France, with $8.2 billion. Meanwhile, contributions to multilateral organizations amounted to $54.2 billion, or 30.3% — a 9.4% increase from the previous year. With $9.1 billion, the U.S. was also the biggest donor to multilaterals, followed by Germany with $8.5 billion and France and the U.K. with $6.1 billion each. In terms of percentage, Greece ranked first among the donors, with 97.7% of its ODA — or $258 million — spent through the multilateral system. COVID-19 accounted for more than 10% of all aid OECD estimated that DAC member countries spent $18.7 billion, or 10.5% of their combined ODA, on activities related to COVID-19 response. Of this amount, $6.3 billion — or 3.5% of the total ODA — went to vaccines, with $2.3 billion worth of excess doses from donor countries’ domestic supplies, $3.5 billion for vaccines purchased specifically as donations for low- and middle-income countries, and $500 million for other costs. Among the DAC member countries, the U.S. made the biggest contribution for vaccines, worth $4 billion — or 63.2% of DAC’s total ODA spending on vaccines. None of this came from domestic surplus doses; $3.5 billion was spent to purchase vaccines for recipient countries, while the remaining $500 million went to ancillary costs. All the other countries’ donations were excess doses, with the exception of Iceland, Ireland, New Zealand, and Poland, which together spent another $12 million for direct donations. Overall, the U.S. made the biggest contribution — worth $5.1 billion — to COVID-19-related activities, which include control, treatment, testing, and vaccines. This is over 10 times bigger than the amount it spent for COVID-19 response in 2020. Other countries that saw significant spending were Japan, with $3.8 billion; Germany, with $3 billion; and Canada, with $1.5 billion. In-donor refugee costs dropped — but expect to see the trend reverse In-donor refugee costs amounted to $9.3 billion in 2021, or 5.2% of the total ODA. Despite spending increasing by $539 million from the previous year, its percentage as a share of the total ODA decreased, from 5.4% to 5.2%. This follows the downward trend in spending for in-donor refugee costs over the past few years. However, this trend is likely to reverse. In 2016, the Syrian refugee crisis boosted DAC’s spending to $16 billion, or 11% of the total ODA, and the same can be expected this year as Ukrainian refugees flood neighboring countries amid Russia’s invasion. Among the countries, Germany spent the most in this area, with $2.7 billion, while the U.K. saw the biggest nominal increase compared with the previous year, from $805 million to $1.2 billion. On the other hand, Canada reported a decrease in spending, worth $167 million. The Netherlands also saw a significant cut, worth $152 million, followed by Greece with $79 million. Note: Year-on-year comparisons were done using 2020 constant prices. Try out Devex Pro Funding today with a free five-day trial, and explore funding opportunities from over 850 sources in addition to our analysis and news content.