THE 2017 DATA REPORT FINANCING FOR THE AFRICAN CENTURY

THE 2017 DATA REPORT FINANCING FOR THE AFRICAN CENTURY

CONTENTS

4 Acknowledgements

6 50 EXECUTIVE SUMMARY CHAPTER 4 COUNTRY PROFILES 52 Australia 16 54 Canada CHAPTER 1 56 EU Member States and Institutions OFFICIAL DEVELOPMENT 60 France ASSISTANCE 62 Germany 64 Italy 28 66 Japan CHAPTER 2 68 The Netherlands DOMESTIC RESOURCE 70 Sweden MOBILISATION AND ALLOCATION 72 The United Kingdom 74 The United States 38 CHAPTER 3 76 Methodology PRIVATE INVESTMENT FOR 84 Annex DEVELOPMENT IMPACT 90 Endnotes

3 ACKNOWLEDGEMENTS

The ONE Campaign would like to thank its board members The following ONE staff and consultants contributed significantly and trusted advisors: Bono, Joshua Bolten, Susan A. Buffett, to the production of this report: Valentina Barbagallo, Meagan Joe Cerrell, Aliko Dangote, John Doerr, Jamie Drummond, Tom Bond, Rinze Broekema, Spencer Crawford, Kate Critchley, Nerida Freston, Helene D. Gayle, Morton H. Halperin, Mo Ibrahim, Ronald Dalton, Morten Emil Hansen, Galen Englund, Stephan Exo- O. Perelman, Sheryl Sandberg, Kevin Sheekey, Bobby Shriver, Kreischer, Nick Goetschalckx, Emily Huie, Ruba Ishak, Ruth Gayle Smith, Michele L. Sullivan, Lawrence Summers, and Mark Jackson, Mae Kurkjian, Serah Makka, Margo Matias Valencia, Suzman, as well as the members of ONE’s Africa Policy Advisory Megan O’Donnell, Franziska Perlick, Jacqueline Quinones, Board: Melvin Ayogu, Amadou Mahtar Ba, Owen Barder, David Ghazal Rahmanpanah, Amanda Robbins, Fiona Robertson, Barnard, Erik Charas, Romy Chevallier, Jacqueline Chimhanzi, Friederike Röder, Tahrat Shahid, Molly Shriver, Gabriele Simeone, Chose Choeu, Paul Collier, Mike Dada, Nic Dawes, Zohra Dawood, Kat Sladden, Kate Vang, and Emily Wigens. Aidan Eyakuze, Eleni Z. Gabre-Madhin, Neville Gabriel, John Githongo, Chikwe Ihekweazu, Angélique Kidjo, Warren Krafchik, The statisticians at the OECD Development Cooperation Mpule Kwelagobe, Acha Leke, Xiaoyun Li, Bunmi Makinwa, Susan Directorate provided the data which made this report possible. Mashibe, Richard Mkandawire, Rugemarila Mutahaba, Jackie We are fortunate to have received comments and feedback on Mutambara, Archbishop Njongonkulu Ndungane, Irene Odida, drafts of the profiles from governments; any errors are our own. Catherine Chichi Okoye, Oluseun Onigbinde, Arunma Oteh, Mandla Thanks go to our copy-editor David Wilson. The report’s design Sibeko, John Ulanga, Russell Wildeman, and Yakubu Lai Yahaya. and art direction were guided by Nicolette Cornelius and Kendall The report’s direction, data analysis, writing and editing were Kiernan of Orange Element. led by Kerezhi Sebany, under the guidance of Sara Harcourt and David McNair. Yesl Kang and Isabelle de Lichtervelde were contributing writers and analysts. Margaret Grace managed the report’s production.

4 To the millions of people who work and campaign tirelessly for the end of extreme poverty,

Your perseverance and commitment are truly inspiring.

ERRORS AND OMISSIONS

This report went to print on August 28, 2017. The information it contains was, to the best of our knowledge, current up until this date. We acknowledge that events that occurred after this point may mean that some of the information in this report is out of date.

5 6 EXECUTIVE SUMMARY

In 1990, approximately 35,000 children on average died every day from preventable and treatable diseases. Twenty-five years later, that number has been nearly cut in half and over 18,600 fewer children die each day from these causes.1 Over this same period, nearly 1.1 billion people worldwide have been lifted out of extreme poverty.2 A remarkable partnership between aid donors, foundations, government leaders, civil society, and private sector innovation has been fundamental to these achievements.

In light of this, record aid levels in 2016 should be a welcome sign, particularly when many donor countries are facing growing calls to prioritise domestic agendas. But as with most trends, global progress masks deep inequalities amongst the beneficiaries of resources and the quality of financing. A number of the very poorest countries are struggling to realise the same global progress. These countries never met most of the Millennium Development Goals (MDGs), whose deadline for delivery was 2015, and are starting off on the back foot to achieve the Sustainable Development Goals (SDGs) by 2030. Some countries have slid backwards after new shocks, such as the commodities price crash or repeated droughts induced by extreme climate, have damaged their progress. The least developed countries (LDCs) and fragile states, the majority of which are in Africa, deserve particular attention as they have some

7 of the highest poverty levels and the fewest This is a pivotal time to reverse these negative progress on global aid and aid to the poorest resources to meet basic needs. LDCs and fragile trends. With its population set to double countries, and tracks the continued erosion countries are also both the origins and the by 2050, Africa has an increasingly narrow of ODA through in-donor refugee costs. hosts of the majority of the world’s displaced window of opportunity to harness a potential Chapter two analyses trends in domestic people, and they have the fewest resources to ‘demographic dividend.’ We need a step revenue mobilisation and expenditures tackle this instability. There are huge income change in investments of aid, private flows against commitments in health, agriculture and gender inequalities in the most vulnerable and domestic resources in the education, and education. Finally, chapter three focuses countries. Poverty is sexist, and this is both employment and empowerment of Africa’s on international private finance to Africa—its unjust and inefficient; investing in girls and youth. ONE has called for a doubling of all current levels, opportunities for increasing it, women gets the best returns in terms of poverty forms of development finance by 2020 for the and the role that ODA can play. The second eradication, peace and prosperity. continent’s doubling population.4 Important half of the report features profiles of 10 donor initiatives are beginning to take shape. The countries plus the European Union, with It is shocking, then, that this year’s DATA new G20 Partnership with Africa—particularly analysis of individual aid levels. Report reveals that these countries, and above the Compact with Africa initiative, which all the world’s poorest citizens, are receiving a is focused on increasing private sector declining share of global financial resources. investment—and the African Union’s roadmap KEY FINDINGS ‘The 2017 DATA Report: Financing for the African for harnessing the demographic dividend Century’ analyses aid, domestic resources and have a vital role to play. In an encouraging A. THE QUALITY OF ODA private finance flows to Africa, particularly to sign, the World Bank Group has committed the many countries that are deemed fragile $57 billion ($45 billion from its concessional IS UNDER THREAT or least developed, and finds that resources window) to the region over the next three Superficially, global ODA reached an all- flowing to the continent do not reflect global years, providing the foundation for a doubling time high of $140.1 billion in 2016 (at current trends. While official development assistance of overall development finance. But long term prices)—a 7.4% increase from 2015 in (ODA) is growing globally, LDCs and Africa are commitments must be made by leaders, real terms. Despite this increase, OECD receiving a declining portion. Germany and alongside quick implementation, to ensure Development Assistance Committee (DAC) Italy, for example, spend more aid money on in- progress. Redoubling investments in girls and countries are still lagging far behind on their country refugee costs at home than they do in women, particularly in the poorest countries, global commitments, with ODA representing aid to Africa. Foreign direct investment (FDI) to is also essential for fighting the poverty that only 0.31% of their collective gross national Africa remains the lowest to any region in the is concentrated in these countries. Achieving income (GNI)—far below the UN target of world by far and has fallen in recent years as a sustainable quality of life, where citizens 0.7% and only a 0.01 percentage point proportion of global flows. Domestic revenues and communities can stay reliably above increase from 2015. Only six countries met in African countries are also declining. Most of and away from extreme poverty, is the goal if the 0.7% target in 2016. At the same time, aid the people in the region, which is home to over we want to make extreme poverty history. is not being allocated to the countries where it 50% of the world’s extreme poor,3 are in danger is needed most. The share of aid to the poorest of being left behind. In the first chapter of this report, ONE looks countries has continued to decline, from 32% at the latest ODA figures, compares donor

8 EXECUTIVE SUMMARY

FIGURE 1: FINANCIAL RESOURCES IN AFRICA ARE DECLINING

45 47 46 77 42 74 48 43 66 73 71 43 61 42 61 35

61 65 32 44

333 378 496 383 469 520 568 548 495 434 USD BILLIONS, CURRENT PRICES USD BILLIONS,

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

DOMESTIC REVENUES FDI ODA

of all aid going to LDCs in 2013 to 28% in 2016, Africa; in Norway and Switzerland, increases away from fighting poverty and saving lives in and the share of aid to Africa declined from in in-donor refugee costs hid decreases in developing countries. 33% in 2015 to 32% in 2016. actual aid flowing to developing countries. Four DAC donors—Greece, Italy, Austria and One promising feature of 2016 was the DAC donors spent $15.4 billion on supporting Hungary—allocated more than 50% of their record $75 billion commitment for the refugees and asylum seekers in their own bilateral assistance in 2016 to in-donor refugee 18th replenishment of the International countries in 2016, an increase of 27% from the costs. Although countries must rightly support Development Association (IDA), the World previous year. Nearly half of DAC donors spent refugees seeking shelter and safety, this money Bank’s fund for the poorest countries. more than a fifth of their bilateral ODA at home should not count as ODA. These costs inflate With Africa set to receive up to $45 billion— on these ‘in-donor refugee costs.’ Countries reported levels of development assistance although not all of it will be ODA—of this such as Germany and Italy spent more on in and in some cases divert precious resources total over the next three years, IDA18 could country costs than they actually gave in aid to be transformational for African citizens.

Figure 1 Sources: African Economic Outlook 2017; OECD DAC Table 2a; UNCTAD World Investment Report 2017. Note: All data in current prices.5 9 FIGURE 2: TOTAL ODA HAS INCREASED, BUT REMAINS FAR FROM THE 0.7% TARGET RECOMMENDATIONS . ON ODA

1. Donors must recommit to ODA targets and work towards spending 0.7% of their national income on development aid overseas. . 2. Donors need to reverse the trend of a declining share of ODA to LDCs and Africa, and prioritise the poorest and most vulnerable countries. Donors must do more to identify, 0.31% 0.30% 0.30% 0.30% reach and empower the poorest 0.29% . people, especially girls and women, 0.29% 0.28% 0.27% in these countries. 0.27% 3. In-donor refugee costs should 0.24%

% OF GNI be completely phased out of ODA and must be additional to aid. USD BILLIONS, 2015 PRICES 2015 USD BILLIONS, . 4. The quality of ODA should be protected in current OECD DAC discussions on aid modernisation and not lead to inflated aid levels. 5. IDA must match its increased resources with increased attention . to improving data and feedback mechanisms and by focusing on

92.05 104.62 112.76 117.19 115.99 112.65 118.74 123.31 131.06 140.78 the most marginalised, especially girls and women.

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 .

TOTAL ODA EXC. IN-DONOR REFUGEE COSTS IN-DONOR REFUGEE COSTS # TOTAL ODA TOTAL ODA/GNI

Figure 2: Global ODA from DAC Countries, as Volume and % of GNI, 2007-2016. Sources: OECD DAC Table 1 and Preliminary Release (April 2017). Notes: Data in 2015 prices. Net ODA excludes bilateral debt relief, and includes both bilateral 10 and multilateral flows. EXECUTIVE SUMMARY

B. THERE IS A CRISIS IN DOMESTIC RESOURCE MOBILISATION IN AFRICA

Domestic resource mobilisation (DRM) is decline of about 44% in resource revenues7— countries are making a comeback, with essential for the delivery of public services. In resulted in a devastating 23.6% decrease (in external borrowing nearly doubling in the 2015, African countries raised over 10 times current prices) in total domestic revenues in last decade. more in domestic resources than the total aid Africa between 2012 and 2015.8 Additionally, they received from DAC countries.6 Not only a combination of large informal sectors, It is important to bear in mind that even where are domestic resources the largest source of complex tax codes, weak administrative domestic revenues far exceed aid, not all of finance in African countries, they are critical to capacity, corruption (for instance, in the those domestic resources are going to social cementing the social contract between states extractives sector) and illicit financial flows services or to poverty-fighting sectors. Most and their citizens. However, the fall in commodity is hindering revenue mobilisation. At the African countries are also falling short on their prices after 2013—which contributed to a same time, worrying debt levels in African commitments to invest their own resources

11 FIGURE 3: AFRICAN COUNTRIES ARE FACING A WORRYING TREND OF DECLINING REVENUES

25% 23%

21% 20% 20% 19%

16% 15% % OF GDP USD BILLIONS, CURRENT PRICES USD BILLIONS, 567.88 548.43 494.53 434.11 313.92 304.52 259.05 232.76 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

AFRICA TOTAL REVENUES AFRICA REVENUE-TO-GDP RATIO AFRICAN LDCs+FRAGILE STATES REVENUES AFRICAN LDCs+FRAGILE STATES REVENUE-TO-GDP RATIO

in key areas such as health, education and levels in order to meet previous commitments. money is being spent and what results are agriculture, which are critical when a large achieved. However, the data provided by African proportion of the population is living in extreme Increasing spending is not enough, however, if governments are usually limited, inconsistent poverty. The median African fragile state or that spending fails to reach those most in need or not publicly available. This makes it difficult LDC has to increase its spending on education and does not improve development outcomes. to track whether public spending is reaching by roughly 20%, on health by nearly 50%, and Reliable, timely and disaggregated budget those it is intended for. on agriculture by more than 100% from current data in open formats are vital to monitor how

Figure 3 Source: African Economic Outlook, AEO Fiscal Data. Notes: Data in current prices. Somalia and South Sudan are excluded due to a lack of data. Revenue totals are comprised of direct taxes on income and profits, 12 domestic indirect tax revenues, trade taxes, other taxes, non-tax revenues and resource rents. They do not include grants. EXECUTIVE SUMMARY

RECOMMENDATIONS ON DOMESTIC RESOURCE MOBILISATION AND ALLOCATION

1. African countries must increase domestic resources by diversifying and broadening revenue sources away from extractives and telecoms, simplifying tax codes and boosting revenue collection capacity. 2. Donors must deliver on their commitments to support revenue mobilisation efforts through capacity building and better transparency standards— including public disclosure of beneficial ownership information of trusts and companies, public country-by-country reporting and open budgets and contracting—in order to fight corruption and curb illicit flows. 3. African governments need to enhance their statistical capacity to improve the quality of data. 4. African governments must commit to financial transparency, fulfil domestic expenditure commitments on agriculture, education and health, and ensure that spending is effective in achieving development objectives. 5. African governments and development partners must responsibly manage financing options to avoid a debt crisis.

13 C. PRIVATE INVESTMENT IS CRITICAL FIGURE 4: FDI TO AFRICA IS CONCENTRATED IN JUST A FEW COUNTRIES TO ACHIEVE THE SDGs BUT IT IS NOT A PANACEA

Private finance, both domestic and international, will play a key role in supporting a sustainable long-term economic base for taxation, jobs, and inclusive growth. There is a great diversity of private actors, from micro, small and medium-sized enterprises (MSMEs) to large multinationals, and they all have a role to play in the fight for sustainable development. Local businesses will be instrumental in creating decent jobs for Africa’s burgeoning population and fostering inclusive growth. This report focuses on the foreign direct investment (FDI) that is crucial to building a capital base in developing countries, but also to supporting technology transfer and know-how, and fostering international trade.

For every dollar of global FDI in 2016, just three cents went to Africa. Inflows to the continent have been volatile and unevenly distributed. Except for a few mostly resource-rich countries, such as Angola, the vast majority of LDCs and fragile states struggle to attract investment. Just six countries—of which five are resource-rich—accounted for 75% of FDI inflows into all 42 African LDCs and/or fragile KEY > 9 states in 2016. Attracting FDI, particularly to the poorest LESS THAN $100 MILLION and most vulnerable countries, will require policy reforms $100–$499 MILLION from African governments as well as international support. $500–$999 MILLION There are welcome initiatives in this direction—including $1,000–$4,999 MILLION IDA’s new Private Sector Window, the G20 Compact with $5,000–$9,999 MILLION Africa initiative, and the European External Investment Plan— $10,000+ MILLION

but these require better coordination, scaling up and RESOURCE RICH implementation. Measures and safeguards will also be necessary to ensure public funds are used exclusively for projects that wouldn’t otherwise be viable for the private sector (i.e. are ‘additional’) as well as truly benefit local actors and foster inclusive growth, including in LDCs and fragile states.

14 Figure 4: FDI Average Inflows, 2014-2016. Source: UNCTAD, World Investment Report 2017. Note: Data in current USD millions. EXECUTIVE SUMMARY

RECOMMENDATIONS ON PRIVATE INVESTMENT

1. African countries need to improve the investment climate and strengthen their policy and regulatory frameworks to ensure that private investments are aligned with the Sustainable Development Goals. 2. Donors must ensure that private finance complements rather than replaces vital public investments and other concessional financing. Precious aid resources should be protected and increased. 3. Donors and partner countries must agree on a common definition, guidelines and assessment frameworks for the development impact of blended finance to provide evidence of poverty reduction and prevention of environmental and social damage, and they must assess debt risk. ODA can play a role in stimulating private 4. Blended finance should meet development effectiveness principles, including country investments through ‘blended’ finance—the ownership and should be aligned with national priorities. use of concessional public financing to catalyse private investments by sharing risks and/or 5. Countries must implement the UN Ruggie principles and the OECD Guidelines for costs of investing in less stable countries—and responsible business conduct by the end of 2017 and must ensure that companies other private sector instruments. Total private investing abroad comply also with the Business Principles for Countering Bribery finance mobilised by official development developed by Transparency International. finance interventions grew by around 20% 6. Alongside incentives to improve the quantity and quality of FDI, partners must do more annually in 2012–14.10 But blending must be to strengthen the domestic private sector in African countries. used carefully and sparingly in order to protect 7. The DAC must protect the core aim of ODA to eradicate extreme poverty and must and preserve precious concessional resources ensure that reforms do not blur the line between development goals and commercial for poverty reduction. The assumption that motivations. There must be reforms on tied aid in order to prevent any weakening of private finance can take the place of public the development focus of ODA. investment is incorrect. DRM is essential for public service delivery and ODA remains vital as a concessional resource for the most vulnerable countries, which struggle to raise sufficient domestic resources. In some cases, such as infrastructure, private finance can play an instrumental role in filling funding gaps, which would free up scarce public resources for other human development objectives.11

15 16 CHAPTER 1 OFFICIAL DEVELOPMENT ASSISTANCE

17 AID MATTERS, ESPECIALLY FOR CITIZENS IN THE POOREST AND MOST FRAGILE COUNTRIES, BUT IT IS UNDER THREAT

Aid plays a unique role in the fight against poverty: it is the main official external flow explicitly aimed at promoting economic development and improving welfare. It has played an essential role in cutting extreme poverty by more than half in the past 20 years, combating preventable deaths, improving access to education and healthcare and empowering girls and women. Many developed countries reaffirmed their commitments to invest 0.7% of gross national income (GNI) in aid and to direct 0.15–0.20% of GNI to least developed countries (LDCs) at the Third International Conference on Financing for Development in Addis Ababa in July 2015.12 Some donors have gone further and have committed to allocate at least half of their ODA to LDCs.13 However, aid is under threat.

Pressures to cut spending are causing leading donor countries to make trade-offs between providing development assistance and addressing other priorities. In the United States, the Trump administration has proposed devastating cuts to the country’s international affairs budget, even if—thankfully—the US Congress has rejected these cuts so far, while some far-right political parties in Europe want to eliminate aid. Donor countries are dealing with pressures, in part, by diverting aid to be used for purposes other than originally intended, such as supporting refugees at home. Others are using development assistance for foreign or economic policy objectives rather than for fighting poverty—i.e. aid is becoming a tool for advancing national interests. ODA is increasingly being used to catalyse private sector investment, leveraging greater capital and bringing private investment to developing regions, though the impact and costs of blended finance need to be better understood (see chapter 3).

18 CHAPTER 1 OFFICIAL DEVELOPMENT ASSISTANCE

PROTECTING THE DEFINITION OF ODA

The OECD Development Assistance Committee (DAC) sets the international standard that countries must meet in order to report financing as ODA, and aims to ensure that it is spent on things that contribute to poverty eradication and sustainable development in developing countries. In recent years, the DAC has undertaken several work streams to modernise aid rules—such as changing the calculations of loan concessionality in order to tighten up on which loans count as aid, and broadening the definition of aid to allow a wider set of peace and security activities to count as ODA. Two work streams are still ongoing within the DAC ODA modernisation process: clarification of the reporting rules for in-donor refugee costs and the inclusion of a wide range of private sector instruments (PSIs) as ODA, such as loans and guarantees given to private companies in developing countries.

ONE and other like-minded organisations believe that in-donor refugee costs should be phased out of ODA completely and that financing for donors’ domestic refugee costs must be additional to aid. During this modernisation process, the rules should remain strict and as transparent as possible, and any costs beyond the first 12 months, as well as integration costs and administrative costs, should be excluded from ODA as soon as possible. For PSIs, there need to be clear guidelines and accountability in order to avoid blurring the lines between aid and commercially motivated spending, and also to ensure development impact and to capture the true budgetary effects of these instruments.

Development assistance is, and will continue to be, crucial to providing life-saving services in many of the poorest countries. As such, any changes in the definition of aid can potentially have serious implications and therefore need to be carefully considered and discussed, with input from civil society and partner countries, especially from the South.

WHY FOCUS ON LDCs AND FRAGILE populations still live on less than $1.90 a day— 2015–2035) in the working age population is STATES IN AFRICA? 35% of people in fragile states, 40% in LDCs and 77% in fragile countries versus 60% in non- 39% in Africa as a whole.15 Countries in these fragile ones.18 People living in LDCs not only have the groupings also account for a large proportion lowest national incomes per capita, but are of the world’s poor, 39% of whom live in LDCs, also vulnerable to economic and environmental 50% in fragile states and 51% in Africa.16 It is shocks and face structural barriers to estimated that the number of extremely poor development. Fragile states have a heightened people living in fragile states will increase from exposure to risk and low capacity to absorb 480 million in 2015 to 542 million by 2035, even shocks.14 The majority of these countries are though poverty is falling globally.17 These are in Africa. They have some of the worst levels also the countries where Africa’s population of poverty and a large percentage of their will grow the most. The average growth (from

19 FIGURE 1: THERE IS SIGNIFICANT OVERLAP BETWEEN LDCs AND FRAGILE STATES IN AFRICA Angola Algeria Burkina Faso Morocco Burundi Tunisia Central African Republic Botswana Chad Cabo Verde Comoros Gabon AFRICAN Democratic Republic of the Congo Ghana COUNTRIES Benin Eritrea Cameroon Mauritius (54) Djibouti Ethiopia Congo Namibia Equatorial Guinea Gambia Côte d’lvoire Seychelles São Tomé and Principe Guinea Egypt South Africa Senegal Guinea-Bissau Kenya Togo Lesotho Libya Democratic Republic of Korea Liberia Nigeria Guatemala Madagascar Swaziland Honduras Malawi Zimbabwe Iraq Mali Pakistan Mauritania Papua New Guinea FRAGILE LDCs Mozambique Afghanistan Niger Bangladesh Syrian Arab Republic STATES (48) Tajikistan Bhutan Rwanda Cambodia (56) Sierra Leone Haiti Venezuela Kiribati West Bank and Gaza Strip Nepal Somalia Lao PDR South Sudan Myanmar Tuvalu Vanuatu Sudan Solomon Islands Tanzania Timor-Leste Uganda Yemen Zambia

DOUBLING OFFICIAL DEVELOPMENT FINANCE TO AFRICA

To capitalise on Africa’s demographic dividend, ONE has called on the G20 to double official development finance (ODF) to Africa by 2020, from approximately $60 billion in 2015 to $120 billion. ODF is comprised of bilateral ODA, the full capital of concessional loans that qualify as ODA, grants and concessional resources from multilateral institutions, and non-concessional development funding from bilateral and multilateral sources. ODF is thus a broader category that can be used to measure the real resources going to recipient countries, while ODA is used to measure donors’ budgetary efforts. ODF also captures non-concessional resources that are made available for development purposes but do not qualify as ODA.

This is particularly relevant in the example of the World Bank Group’s commitment of $57 billion to Africa over the next three years.19 The lion’s share of this amount—$45 billion—will come from the International Development Association (IDA), the World Bank’s fund for the poorest countries. This funding will focus on building resilience to crises; tackling conflict, fragility and violence; reducing gender inequality; promoting governance and institution building; and creating jobs and economic transformation.

Figure 1 Sources: OECD (2016) ‘States of Fragility 2016: Understanding Violence’, African Union member list and UN list of LDCs. Notes: Even though Equatorial Guinea graduated from the LDC category in June 2017, ONE has retained it in 20 its analyses throughout the report. The OECD grouping of fragile states changes from year to year. In order to analyse resources over time to this grouping, however, ONE has followed the OECD’s convention of using the most recent list of countries from the 2016 OECD fragility framework and retroactively applying that list to all previous years in its analysis. CHAPTER 1 OFFICIAL DEVELOPMENT ASSISTANCE

FIGURE 2: TOTAL ODA HAS INCREASED BUT IT REMAINS FAR FROM THE 0.7% TARGET

.

.

0.31% 0.30% 0.30% 0.30% 0.29% . AID LEVELS ARE UP, BUT MOST 0.29% 0.28% 0.27% DONORS ARE FALLING SHORT ON 0.27%

THEIR COMMITMENTS 0.24% % OF GNI Global ODA reached an all-time high of $140.1

billion in 2016 (at current prices)—a 7.4% PRICES 2015 USD BILLIONS, increase from 2015 in real terms. Of the 23 . DAC donors that increased their total aid in 2016, six did so by more than 25%. However, many DAC countries are lagging behind on their commitments. ODA represented just 0.31% of the collective GNI of DAC countries in 2016—far below the UN target of 0.7% and only . a 0.01 percentage point increase from 2015. Only six countries met the 0.7% target: Norway, 92.05 104.62 112.76 117.19 115.99 112.65 118.74 123.31 131.06 140.78 Luxembourg, Sweden, Denmark, Germany and the United Kingdom. Even though Sweden fulfiled the 0.7% commitment, it significantly cut its aid in 2016, along with six other countries: 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 . Finland, the Netherlands, Australia, Denmark, Canada and New Zealand. TOTAL ODA EXC. IN-DONOR REFUGEE COSTS IN-DONOR REFUGEE COSTS # TOTAL ODA TOTAL ODA/GNI

Figure 2: Global ODA from DAC Countries, as Volume and % of GNI, 2007-2016. Sources: OECD DAC Table 1 and Preliminary Release (April 2017). Notes: Data in 2015 prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows. 21 TABLE 1: IN 2016, ONLY SIX DONORS MET THE 0.7% TARGET

Global ODA ODA to LDCs ODA to Africa Global ODA change LIBERIA’S RECOVERY AFTER EBOLA20 (USD millions) (USD millions) (USD millions) ODA/GNI from 2015 to 2016 NORWAY 4,334.36 1,040.16 1,060.31 1.11% The outbreak of the Ebola virus in 2014–15 led to LUXEMBOURG 383.72 152.45 159.32 1.00% a catastrophic loss of human life and exposed the SWEDEN 4,870.43 1,360.46 1,450.89 0.94% weaknesses in Liberia’s healthcare delivery services. DENMARK 2,369.69 623.55 774.75 0.75% Inadequately qualified health practitioners and ill- GERMANY 24,626.99 No Data 5,401.44 0.70% equipped medical facilities, along with a lack of infection

UNITED KINGDOM 18,010.08 5,613.42 6,702.93 0.70% control measures, highlighted the dire state of this

NETHERLANDS 4,933.78 1,157.58 1,452.09 0.65% fragile state’s health system. However, the response

SWITZERLAND 3,562.90 831.29 890.20 0.54% led by Liberia’s Ministry of Health—with support from

BELGIUM 2,301.31 797. 2 2 915.51 0.49% the World Bank, the United States and the United

FINLAND 1,056.87 300.70 334.99 0.44% Nations—helped eliminate cases of Ebola, and the path to recovery is continuing. International assistance has been AUSTRIA 1,575.11 233.42 304.90 0.41% instrumental in rebuilding a more decentralised health FRANCE 9,410.97 2,339.42 4,156.26 0.38% system, training health workers in infection prevention and IRELAND 802.22 335.46 375.24 0.33% control procedures and providing more medical supplies. CANADA 3,961.87 1,384.09 1,607.43 0.26% Furthermore, this support has helped to vaccinate nearly ITALY 4,710.98 889.88 1,203.38 0.25% 600,000 infants and has provided medication for children NEW ZEALAND 438.09 118.09 43.27 0.25% under five and for pregnant women. AUSTRALIA 3,017.27 860.35 431.19 0.25%

ICELAND 50.18 20.16 20.02 0.25%

JAPAN 10,352.59 4,062.18 3,126.87 0.20%

SLOVENIA 79.65 13.56 19.81 0.18% UNITED STATES 33,579.20 11,774.95 12,497.37 0.18% AID TO THE POOREST COUNTRIES IS DOWN, EVEN PORTUGAL 339.61 100.21 153.94 0.17% THOUGH THEY FACE THE GREATEST NEEDS SPAIN 1,934.25 486.51 715.09 0.16%

CZECH REPUBLIC 261.14 56.32 75.12 0.14% Bilateral aid to LDCs (excluding debt relief) fell by $1 billion in 2016—a 4.1% decline in real terms from 2015, and a worrying KOREA 1,964.96 755.13 605.44 0.14% sign of a declining focus on these countries. Twenty-two of the GREECE 264.00 45.24 71.62 0.14% 29 DAC donor countries cut their bilateral assistance (excluding POLAND 602.34 185.18 250.75 0.13% debt relief) to LDCs, six by more than one fifth: Spain, the Slovak HUNGARY 155.40 46.43 56.03 0.13% Republic, Italy, Finland, New Zealand, and Australia. Twenty two SLOVAK REPUBLIC 107.02 21.94 33.75 0.12% donor countries fell short on their commitment to allocate 0.15% TOTAL DAC COUNTRIES 140,056.98 38,908.40 44,889.89 0.31% or more of their GNI to LDCs. These shortfalls are concerning, MEMO: EU INSTITUTIONS 15,736.58 4,226.68 6,287.35 N/A as LDCs require assistance to provide the most basic services

22 Table 1 Sources: OECD DAC Table 1, Table 2a, and Preliminary Release (April 2017). Note: All figures are net flows, excluding debt relief, and in current prices. CHAPTER 1 OFFICIAL DEVELOPMENT ASSISTANCE

FIGURE 3: THE SHARE OF AID TO LDCs IS DECLINING BED NETS AND MEDICINE REDUCE MALARIA CASES IN RURAL GUINEA21

30% Malaria is a leading cause of 28% 28% hospitalisation and of deaths in Guinea, which is both an LDC and a fragile state. People in rural towns such as Garambé are hardest hit, and they expect to

% OF ODA suffer from the disease in the rainy season. The only anti-malarial medicine

USD BILLIONS, 2015 PRICES 2015 USD BILLIONS, available at the nearest health centre to 36.83 3 7.1 7 39.06 Garambé used to be chloroquine, which is less effective than artemisinin-based combination therapy.

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 USAID’s StopPalu project has helped to drive down malaria rates. With ODA TO LDCs % OF ODA funding from the U.S. President’s Malaria Initiative (PMI), in 2016 StopPalu provided nearly a million households to their citizens; and donors have previously Finland, New Zealand, Canada, Switzerland, across the country with over 3.3 million committed to reversing these trends. Sweden, Australia, Ireland and Japan. insecticide-treated bed nets. Enhanced and proper usage of bed nets, coupled Even more concerning, the share of aid The DAC’s preliminary release of 2016 ODA data with better access to more effective allocated to the poorest countries has does not include a breakdown of aid to fragile anti-malarial medicine, has led to a continued to decline, from 32% in 2013 to 28% states. The most recent publicly available data significant drop in the number of malaria in 2016. If all DAC donors had allocated half of show that ODA from DAC countries provided cases—from 50 cases per month to their ODA to LDCs in 2016, an additional $35 $30.8 billion to African fragile states in 2015. fewer than 10. billion would have been made available to the The proportion of aid going to African fragile world’s poorest countries. Sadly, no country states continued to decline in 2015, with only achieved 50%. Only three countries (Ireland, 23.5% of ODA going to these countries. Thirteen Iceland and Luxembourg) targeted more than DAC donors, including the EU Institutions, 40% of their ODA towards LDCs. Meanwhile reduced their contributions to African fragile eight countries cut their overall aid to LDCs: states between 2014 and 2015.

Figure 3: Proportion and Volume of Global ODA to LDCs, 2007-2016. Sources: OECD DAC Table 1 and Preliminary Release (April 2017). Notes: All figures are net flows, bilateral and imputed multilateral, excluding debt relief in constant prices.22 2016 imputed multilateral aid is estimated by ONE and may not reflect actual multilateral flows to LDCs. 23 COUNTRIES ARE SPENDING FIGURE 4: IN-DONOR REFUGEE COSTS HAVE MASSIVELY INCREASED IN THE PAST THREE YEARS MORE AID AT HOME ON SUPPORTING REFUGEES

In 2016, nearly half of DAC donors spent more than a fifth of their bilateral ODA at home, supporting refugees and asylum seekers in their own countries—more than double the figure in 2014. Donors can report the costs of assisting refugees within their own borders for the first 11.0% year they are in the country. Donor spending on these in-donor refugee costs, as they are called, has more than doubled in three years, from less 9.2% than 4% prior to 2013 to 11% in 2016. DAC donors

spent $15.4 billion (current prices) on in-donor refugee costs in 2016, an increase of 27% from the previous year. Although countries must ODA TOTAL % OF rightly support refugees seeking shelter and PRICES 2015 USD BILLIONS,

safety, ONE believes that this money should 4.7% not count as aid. These costs inflate reported levels of development assistance and in some cases divert precious resources away from fighting poverty and saving lives in developing

countries. For instance, Germany and Italy 5.83 12.11 15.44 spent more on in-donor refugee costs than they actually gave in aid to all of Africa.

When in-donor refugee costs are excluded, 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 only three countries—Norway, Luxembourg, and Sweden—met the 0.7% ODA/GNI target IN-DONOR REFUGEE COSTS IN-DONOR REFUGEE COSTS/TOTAL ODA in 2016. Even then, in the cases of Norway and Switzerland, in-donor refugee costs are excluded, developing countries received must keep their promises to both tackle actually masked decreases in real ODA. $53.7 million less than they did in 2015. In poverty and assist refugees, without making For example, Norway increased its total ODA Switzerland’s case, developing countries a dangerous trade-off between these two by 7.8%; however, when in-donor refugee costs received $66.8 million less. Donor countries priorities.

24 Figure 4: In-Donor Refugee Costs Counted as ODA, as Volume and % of Total ODA, 2007-2016. Sources: OECD DAC Table 1 and Preliminary Release (April 2017). Notes: Data in 2015 constant prices. Net flows, excluding debt relief. CHAPTER 1 OFFICIAL DEVELOPMENT ASSISTANCE

FIGURE 5: EVEN THE MOST GENEROUS DONORS ARE SPENDING LARGE AMOUNTS OF AID AT HOME

.

.

.

.

.

.

.

. % OF GNI < KEY . 2016 ODA EXCLUDING . IN-DONOR REFUGEE COSTS/GNI . 2016 IN-DONOR REFUGEE COSTS/GNI . 2015 ODA EXCLUDING . IN-DONOR REFUGEE COSTS/GNI

. 2015 IN-DONOR REFUGEE COSTS/GNI . ITALY SPAIN JAPAN KOREA GREECE FRANCE POLAND CANADA SWEDEN AUSTRIA NORWAY IRELAND FINLAND ICELAND BELGIUM HUNGARY GERMANY DENMARK SLOVENIA PORTUGAL AUSTRALIA LUXEMBOURG SWITZERLAND NEW ZEALAND NETHERLANDS UNITED STATES UNITED KINGDOM CZECH REPUBLIC CZECH SLOVAK REPUBLIC SLOVAK

Figure 5: DAC Countries’ ODA as a % of GNI, Including and Excluding In-Donor Refugee Costs, 2015 & 2016. Source: OECD DAC Preliminary Release (April 2017). Note: Net ODA excludes bilateral debt relief and includes both bilateral and multilateral flows. 25 #GIRLSCOUNT: ONE’S CAMPAIGN TO FINANCE EDUCATION AND GET GIRLS BACK TO SCHOOL

Education is one of the most powerful weapons in the fight against extreme poverty. Yet 130 million girls across the world are out of school.23 ONE’s #GirlsCount campaign draws attention to this crisis in order to mobilise resources and support key education policy reforms to get these girls back to school and learning. The Education Commission, which focuses on strategic education financing approaches and building political support for global education, estimates that there is a global education funding gap of $1.2 trillion per year currently, rising to $3 trillion by 2030, to ensure that all children and young people are in school and learning.24 In order to close this gap, bilateral aid to education must be increased and multilateral organisations such as GPE and ECW must be fully funded.25

The Global Partnership for Education (GPE)26 (established in 2002) helps to build stronger education systems in the 89 low- and lower-middle-income countries that are furthest away from reaching SDG4—to ensure inclusive and quality education for all and to promote lifelong learning. Working with governments and other partners to implement strong national education sector plans, GPE’s support has resulted in 64 million more children being in primary school over the past decade, and an increase of around 10% in the number of children completing primary and lower secondary school. GPE is seeking $3.1 billion from donors for its 2018–20 replenishment to improve quality and access to education for around 870 million children and youth worldwide.

Education Cannot Wait (ECW)27 (established in 2016) provides support and funding to prioritise education at the onset of a humanitarian crisis by joining up the efforts of government, humanitarian and development actors to deliver education. ECW helps countries get back on track to implementing longer-term planning and finance. In 2017, it is funding quality education for an estimated 2 million vulnerable children in Syria, Yemen, Chad and Ethiopia28 and is seeking $383 million to reach around 3.4 million children and young people globally.

International Financing Facility for Education (IFFEd)29 aims to fill the at least US$10 billion education financing gap that would remain even after GPE and ECW are fully funded. The new facility, which was proposed by the UN Secretary General, must be additional to and in alignment with existing efforts and, with them, focus on innovation and constantly improving the effectiveness of all money spent on education. In July 2017, the G20 took note of the proposal, and the importance of establishing it while taking in to account other initiatives such as GPE and ECW, and said that they would examine it further under Argentina’s G20 Presidency.

26 CHAPTER 1 OFFICIAL DEVELOPMENT ASSISTANCE

CONCLUSION

While global ODA reached an all-time high in 2016, many donors are not prioritising aid as a tool for fighting poverty. Aid quality is diminished when large portions of ODA never leave donor countries. For the poorest countries, the quantity and quality of aid are not commensurate with the historic opportunity—or the jeopardy—they are facing. To end extreme poverty, the worrying trend of declining support to the poorest countries must be reversed. At the same time, donors need to protect and defend ODA and ensure that it remains focused on poverty eradication and sustainable development.

RECOMMENDATIONS ON ODA

1. Donors must recommit to ODA targets and work towards spending 0.7% of their national income on development aid overseas. 2. Donors need to reverse the trend of a declining share of ODA to LDCs and Africa, and prioritise the poorest and most vulnerable countries. Donors must do more to identify, reach and empower the poorest people, especially girls and women, in these countries. 3. In-donor refugee costs should be completely phased out of ODA and must be additional to aid. 4. The quality of ODA should be protected in current OECD DAC discussions on aid modernisation and not lead to inflated aid levels. 5. IDA must match its increased resources with increased attention to improving data and feedback mechanisms and by focusing on the most marginalised, especially girls and women.

27 28 CHAPTER 2 DOMESTIC RESOURCE MOBILISATION AND ALLOCATION

29 DOMESTIC REVENUES DROP AS COMMODITY PRICES PLUMMET

The total volume of domestic revenues in Africa rebounded from the financial crisis of 2007–08 and peaked at $568 billion in 2012. However, much of these gains were based on revenues from natural resources. The fall in commodity prices after 2013—which contributed to a decline of about 44% in resource revenues— resulted in a devastating 23.6% decrease (in current prices) in total domestic revenue in Africa between 2012 and 2015.35 African countries have also experienced a drop in revenue-to-GDP ratios over the past decade, notably after the 2008 financial crisis and the 2013 crash in commodity prices.

BETTER POLICY CAN BOOST Domestic resource mobilisation (DRM) is other sources of finance, they are critical to DOMESTIC REVENUES essential for the delivery of public services by cementing the social contract between states governments. The Addis Ababa Action Agenda and their citizens. Governments that depend Most African countries struggle to increase underscored the importance of boosting on their citizens for revenue tend to be more revenue. A combination of informality, DRM by strengthening revenue collection. responsive to the needs of those citizens. complexity and weak capacity makes it easy To this end, countries are encouraged to for individuals and companies to evade tax. set nationally defined targets and timelines Even though African countries have made Low per capita incomes and large informal for increasing domestic revenues. Donors notable progress on revenue mobilisation, sectors limit both individual and business tax have also committed to support developing many continue to be constrained by a limited contributions. Complex tax codes are a barrier countries that need assistance in achieving tax base and a lack of private investment. The to businesses formalising themselves and becoming taxable, while a wide range of tax these targets.30 tax-to-GDP ratio in African countries (19%) lags far behind the OECD average of 34.3%.32 At the exemptions means that many individuals and In 2015, African countries mobilised over 10 same time, it is estimated that Africa lost $89 business segments are not subject to taxation. times more in domestic resources than the total billion in illicit financial flows in 2013,33 which Weak administrative capacity and inadequate aid they received from DAC donor countries.31 is more than the $45 billion34 in ODA that the personal identification and business Not only are domestic resources larger than continent received from DAC countries in 2016. registration systems prevent governments

30 CHAPTER 2 DOMESTIC RESOURCE MOBILISATION AND ALLOCATION

FIGURE 1: AFRICAN COUNTRIES ARE FACING A WORRYING TREND OF DECLINING REVENUES

25% 23%

21% 20% 20% 19%

16% 15% % OF GDP USD BILLIONS, CURRENT PRICES USD BILLIONS, 567.88 548.43 494.53 434.11 313.92 304.52 259.05 232.76 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

AFRICA TOTAL REVENUES AFRICA REVENUE-TO-GDP RATIO AFRICAN LDCs+FRAGILE STATES REVENUES AFRICAN LDCs+FRAGILE STATES REVENUE-TO-GDP RATIO from comprehensively identifying sources of disproportionately affect the poor.38 extractive industries to maximise the benefits taxation and widening their tax bases.36 As of natural resource wealth, improving personal Africa’s urban population is predicted to more Estimates suggest that illicit financial flows identification systems and abolishing harmful than double between 2000 and 2030,37 the resulted in losses for Africa of $817 billion tax incentives, while attracting the informal collection of urban property taxes presents between 2004 and 2013—money that could sector into the formal sector (including another (so far largely unexploited) opportunity have been taxed and invested in public transparent, simplified procedures for the 39 to increase domestic resource mobilisation— services. Governments must fight tax evasion registration of companies). and in a way that is progressive and will not and avoidance, in particular by monitoring

Figure 1 Source: African Economic Outlook, AEO Fiscal Data. Notes: Data in current prices. Somalia and South Sudan are excluded due to a lack of data. Revenue totals are comprised of direct taxes on income and profits, domestic indirect tax revenues, trade taxes, other taxes, non-tax revenues and resource rents. They do not include grants. 31 RWANDA: REFORM AND GOVERNMENT HEALTH SPENDING40

Rwanda—an LDC and a fragile state— has recorded notable progress in DRM due to reforms in policy and tax administration. Following the establishment of the Rwanda Revenue Authority (RRA) in 1997, the government has widened the tax base, improved taxpayer education, enhanced compliance enforcement, introduced electronic billing machines (EBMs) for VAT-registered taxpayers, improved audits and enacted laws to penalise tax evasion. From 2000 to 2014, total domestic revenue as a share of GDP rose by about half.41 This rise has played an important part in increasing domestic resource mobilisation for development purposes, especially for health. Government spending on health AFRICAN COUNTRIES ARE FALLING SHORT ON THEIR DOMESTIC increased from 4.2% of GDP in 2000 EXPENDITURE COMMITMENTS to 7.5% in 2014.42 Although external financing continues to play a valuable African governments have made clear commitments to invest in three key social sectors—health, role, it accounts for a smaller proportion agriculture and education. African Union (AU) member states met in Abuja in 2001 and pledged to of health spending. In 2009, external allocate at least 15% of their national budgets to health. Two years later, African leaders gathered resources for health peaked at 67% of in Maputo and agreed to devote 10% of their national budgets to agriculture; this commitment all health spending in Rwanda, but this was reaffirmed in Malabo in 2014. African countries have also signed up to Education for All—now 43 declined to 46% in 2014. known as the Global Partnership for Education (GPE)—and have committed to allocate 20% of their budgets to education.

32 CHAPTER 2 DOMESTIC RESOURCE MOBILISATION AND ALLOCATION

FIGURE 2: MOST AFRICAN COUNTRIES ARE NOT MEETING THEIR SPENDING PLEDGES #MAKENAIJASTRONGER: DELIVERING ON THE PROMISE

OF A HEALTHY NIGERIA

As the most populous country in Africa and one of its largest economies,

Nigeria is poised to emerge as a leader both on the continent and in the GPE Commitment world. But without urgent action, the poor health of its citizens will prevent (Education, 20%) it from realising this potential. Nigeria ranks in the bottom third of sub- 19.1% Saharan African countries on health expenditure as a proportion of general 16.8% 44 16.5% government expenditure. As part of the #MakeNaijaStronger campaign, Abuja Commitment ONE and its partners have called on the Government of Nigeria to honour (Health, 15%) its commitments on health spending.

Research suggests that increased government spending on health, Maputo/Malabo Commitment when coupled with good policies and good governance, can increase (Agriculture, 10%) 9.7% life expectancy, reduce infant, child and maternal mortality and yield 9.3% 9.6% % OF NATIONAL BUDGET % OF NATIONAL significant economic returns. Estimates from 47 African countries < KEY (including Nigeria) show that a 10% increase in total health expenditure per capita could reduce under-five and infant mortality rates by a fifth.45 AFRICA, LDC AND/OR Improving life expectancy by just one year with these investments could 4.0% 4.0% FRAGILE STATE 46 increase a country’s GDP by 4% over time. In Nigeria’s case, this would AFRICA, translate into approximately $19.2 billion for 2015.47 If the country boosted 2.0% NON-LDC OR FRAGILE STATE its investment in health to increase life expectancy by just one year, 48 AFRICA it would yield a 279% return to the economy. Education Health Agriculture

However, waste and corruption in the health sector—particularly in the procurement phase—diverts already limited resources and prevents Unfortunately the majority of African countries are far from the delivery of lifesaving programmes to those most in need. Grassroots meeting these spending pledges. The median African fragile movements such as Connected Development’s (CODE) ‘Follow the Money’ state or LDC has to increase its spending on education by use smartphone technology to track and monitor the disbursement of roughly 20%, on health by nearly 50% and on agriculture by government and aid funding. Since its launch, ‘Follow the Money’ has more than 100% from current levels in order to meet these traced millions of dollars of aid that had been illicitly diverted from health commitments. In 2014, only four African countries50—all and education programmes.49 These efforts must be complemented by fragile states—fulfiled their Abuja pledges on health spending. investments in the Nigerian Bureau of Statistics to improve its capacity to Eleven African countries51 met the 20% threshold for education collect and transparently share data. spending, of which nine are fragile states, LDCs or both. Only three African countries52—all fragile states—met the Maputo/

Figure 2: Median Education, Health and Agriculture Spending as a % of National Budgets (Most Recent Data). Sources: ReSAKSS for agriculture spending; UNESCO Institute of Statistics for education spending; and WHO Global Health Expenditure Database for health spending. Notes: Most recent data year differs by country and by source. Some countries have been excluded due to a lack of data between 2010 and the present.53 33 Malabo commitment on agriculture, and nearly health and education and spent nearly double MORE SPENDING DOES NOT ALWAYS two-thirds of African countries did not spend its commitment on agriculture.54 Ethiopia, LEAD TO BETTER RESULTS even half of the 10% target. also a fragile state and an LDC, has met its commitment on health in the last five years for Increasing spending, however, is not enough if Being a fragile state or an LDC does not which data are available (2010–14) and has spent that spending fails to reach those most in need necessarily predetermine lower social over 27% on average on education over the last and does not improve development outcomes. sector spending. Malawi, for instance—both five years with data (2009–13).55 These countries For instance, oil-rich Equatorial Guinea boasts a fragile state and an LDC—surpassed its show that progress is possible with political will. one of the highest per capita expenditures in commitments for government spending on Africa at roughly $4,500,56 but the number of primary school-age children not receiving FIGURE 3: EXTERNAL DEBT STOCKS IN AFRICA ARE RISING an education in that country has more than doubled in the past 15 years.57 This underscores that the quality—i.e. the efficiency and accountability—of spending is just as important as increasing expenditure volumes. Poor 25% 25% 25% 25% and inconsistent budget data and data lags continue to be major barriers in tracking country 22% 22% 22% progress and holding governments accountable. 20% Better transparency and disaggregation of 21% 21% budget and expenditure data, particularly by sex, are essential to address gender inequality and track spending from inputs to impact.

% OF GNI DEBT IS BACK

External borrowing by countries in Africa nearly USD BILLIONS, CURRENT PRICES USD BILLIONS, doubled between 2006 and 2015. Aggregate figures conceal the varying pace of debt build-up in a number of African countries, 268.23 303.08 304.50 342.17 370.85 400.56 450.29 490.41 512.77 528.58 including LDCs. For instance, external debt in Ethiopia and Liberia increased by 62% and 58% respectively between the end of 2013 and end of 2015, compared with an increase 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 of around 8% for the continent as a whole over the same period.58 More stable and developed AFRICA EXTERNAL DEBT STOCKS TOTAL AFRICA EXTERNAL DEBT STOCK (% OF GNI)

34 Figure 3 Source: World Bank International Debt Statistics (last updated 21 December 2016). Notes: Data are in current prices. Djibouti, Equatorial Guinea, Libya, Madagascar, Namibia and Seychelles are excluded due to missing data. CHAPTER 2 DOMESTIC RESOURCE MOBILISATION AND ALLOCATION

countries are not immune: for example, Ghana DONORS CAN HELP THROUGH and efficiency. ATI development partners have has entered an IMF programme after it saw CAPACITY BUILDING AND also pledged to collectively double technical its debt-to-GNI ratio jump by 35 percentage TRANSPARENCY STANDARDS cooperation in the area of DRM by 2020. To points, from 21% in 2007—the debut year of fulfil this commitment, they must collectively 59 its sovereign bond issue—to 56% in 2015. Development partners have an important role increase their gross disbursements to $447.52 to play by curbing corruption, stemming illicit million by 2020, from the $223.76 million they In addition to budget deficits linked to reduced 63 financial flows and providing financial and provided in 2015 (the baseline year). export revenues and slower economic growth technical support, as African tax administrations in some African countries, the rapid rise in Capacity building alone is not enough, however. seek to increase their capacity. Furthermore, debt has been attributed to increased access Every year, an estimated $1 trillion is siphoned development partners must ensure that their to international financial markets and an out of developing countries via a web of shady, trade and investment policies are aligned with environment of low interest rates. These secret and corrupt activities that include their development policies, and they must avoid conditions have spurred several African tax evasion and the use of anonymous shell lobbying for loopholes that deprive African countries to make bond issues to fund companies. If this money was recovered and governments of taxable revenue.61 infrastructure or to reschedule public debt.60 taxed, it could be invested in new hospitals, This swift growth in debt burdens is raising Efforts such as the Addis Tax Initiative schools and teachers. Addressing this issues of debt sustainability for African (ATI) and Tax Inspectors Without Borders challenge is not just in the interests of African countries that are simultaneously grappling with (TIWB) are already contributing to progress countries but in the interests of donor countries immense development needs. Although debt in these areas. Over 45 countries and as well, given that corruption fuels inequality may be an important source of development regional and international organisations and instability, exacerbates humanitarian crises finance for some countries, investing these have signed up to the ATI,62 committing to and undermines efforts to end extreme poverty. funds effectively in development projects and enhance DRM by strengthening tax systems prudent fiscal management are essential to through transparency, fairness, effectiveness prevent future crises.

REVELATIONS FROM THE PANAMA PAPERS

The Panama Papers, leaked in 2015, exposed the extent of the money held in the City of London that can be linked to former and current Nigerian government officials who have been implicated in corruption. For instance, Folorunsho Coker, a former head of the number plate production authority of the state of Lagos and currently the Director-General of the Nigerian Tourism Development Corporation, owns a £1.65 million townhouse in the exclusive London area of Kensington and Chelsea. The Panama Papers revealed that the house belongs to a British Virgin Islands company, whose sole shareholder is Coker. Coker’s lawyer claimed that his client had multiple sources of income and had declared his interest in the company, Satori Holdings, to the Nigerian authorities.64 For the price of this luxury townhouse, 250,000 insecticide-treated bed nets could be bought to protect against malaria in Nigeria.65

35 A succession of major leaks of financial global community to take concrete actions available would enable journalists, civil society records and emails from financial centres that better enable the speedy investigation and and law enforcement agencies to follow the has exposed the scale of complex secrecy return of stolen assets to developing countries, money and root out corruption, while also networks involving the use of anonymous to support development agendas. having a deterrent effect. Progress has been entities to dodge tax and hide illicit gains. made globally: the UK launched the world’s first The Panama Papers and other leaks have also Donor governments need to make concrete public beneficial ownership register in April revealed how corrupt money ends up in high- commitments and implement measures to 2016, and other countries have committed to do end property, expensive cars and businesses improve corporate transparency by requiring so as well, including France, the Netherlands, in places such as London, New York, Dubai and companies and trusts to publicly disclose their Nigeria and Ukraine. The European Union is Paris. The Global Forum on Asset Recovery beneficial owners and publish country-by- under pressure to make it a requirement to is due to take place in late 2017 in the US, in country reports containing the financial details publicly disclose information on beneficial partnership with the UK, Nigeria, Tunisia, Sri necessary to identify and curb profit shifting ownership of trusts and companies as it Lanka and the Stolen Asset Recovery Initiative and tax avoidance, in every country in which revises its Anti-Money Laundering Directive, (StAR).66 The forum is an opportunity for the they do business. Making this information which is ongoing.

36 CHAPTER 2 DOMESTIC RESOURCE MOBILISATION AND ALLOCATION

CONCLUSION

Domestic revenues are the most sustainable source of financing to help African countries achieve development goals. These resources must be well spent in order to attain desired outcomes. Improved domestic tax policies and support for tax authorities must be combined with steps in all countries to fight corruption and illegal tax evasion through greater transparency.

RECOMMENDATIONS ON DOMESTIC RESOURCE MOBILISATION AND ALLOCATION

1. African countries must increase domestic resources by diversifying and broadening revenue sources away from extractives and telecoms, simplifying tax codes and boosting revenue collection capacity. 2. Donors must deliver on their commitments to support revenue mobilisation efforts through capacity building and better transparency standards—including public disclosure of beneficial ownership information of trusts and companies, public country-by-country reporting and open budgets and contracting—in order to fight corruption and curb illicit flows. 3. African governments need to enhance their statistical capacity to improve the quality of data. 4. African governments must commit to financial transparency, fulfil domestic expenditure commitments on agriculture, education and health, and ensure that spending is effective in achieving development objectives. 5. African governments and development partners must responsibly manage financing options to avoid a debt crisis.

37 38 CHAPTER 3 PRIVATE INVESTMENT FOR DEVELOPMENT IMPACT

39 Africa’s population is forecast to double to investment, and more specifically foreign new G20 Partnership with Africa—particularly about 2.5 billion by 2050.67 Decent jobs that direct investment (FDI), along with the use the Compact with Africa (CwA) initiative, provide dignity and income for the continent’s of ODA to leverage private investment (known which is focused on increasing private sector growing young population are essential to as ‘blending’). FDI is crucial to attract capital investment—can play a vital role. The success harness the demographic dividend. Increased in developing countries, as well as technology of such initiatives hinges on a solid foundation domestic and international investment—public transfer and know-how. FDI can be an engine with strong safeguards, coordination and and private—is necessary for job creation. for inclusive economic growth by increasing follow-up mechanisms, especially for Africa’s However, the most vulnerable countries productive capacity in Africa and fostering more fragile states. struggle to raise sufficient domestic resources international trade. to meet the most basic development needs, while ODA for LDCs declined to just $39.1 However, in most developing countries PRIVATE FINANCE IS CRUCIAL billion. The infrastructure financing gap in foreign private investments are often limited FOR SUSTAINABLE DEVELOPMENT, sub-Saharan Africa, for example, totals more to a small number of sectors, and they often BUT AFRICA RECEIVES ONLY bypass countries most in need. Furthermore, than $50 billion annually. It is estimated that THREE CENTS FOR EVERY FDI the poor quality of the region’s infrastructure not all private sector activities contribute to reduces economic growth by two percentage development or benefit the poor. As a result, DOLLAR GLOBALLY points annually and cuts productivity by 40%.68 governments must strengthen policy and Following a surge between 2000 and 2007, Private finance will play a key role in filling this regulatory frameworks to ensure that private FDI inflows to Africa have been volatile over financing gap, particularly in infrastructure investments are aligned with development the past decade. After weathering a downturn and energy, and in supporting a sustainable goals and complement rather than replace brought about by the 2007–08 global financial long-term economic base for taxation, jobs important public sector investments and crisis, FDI to Africa peaked at $77 billion in and development. other concessional financing. ODA can play an important role in stimulating private 2012 (representing 5% of global FDI inflows). There is a great diversity of private actors, investment, but it must be used carefully However, the slump in commodity prices has from micro, small and medium-sized and sparingly to protect and preserve precious resulted in a steady decline in FDI inflows enterprises (MSMEs) to large multinationals. concessional resources for poverty reduction to the continent, which fell to $59 billion Local private actors play a key role in and to stimulate the right kinds of investment. in 2016—just 3% of total FDI inflows globally.69 creating decent jobs for Africa’s burgeoning Concessional public funds should be used This trend is most pronounced in countries population and fostering inclusive economic to subsidise private investments only for that are rich in natural resources. Even though growth. Stimulating private sector growth in projects that would not otherwise be viable 73% of FDI to Africa in 2014–16 went to 10 Africa through creating a business friendly for the private sector and that have a proven environment and supporting domestic private development impact. mostly resource-rich countries, inflows are actors, especially MSMEs that are drivers for below previous levels.70 Investor interest has job creation, will be instrumental to achieve ONE has called for a doubling of all forms of cooled as these countries are facing economic sustainable development. However, in this development finance, including FDI, by 2020 headwinds and subdued growth outlooks. report ONE focuses on international private for the continent’s doubling population. The On the other hand, countries with diversified

40 CHAPTER 3 PRIVATE INVESTMENT FOR DEVELOPMENT IMPACT

FIGURE 1: FDI INFLOWS HAVE BEEN VOLATILE SINCE THE GLOBAL FINANCIAL CRISIS

.

.

3.33% .

3.09%

2.86% . 2.69% 2.70% .

. % OF GDP

USD BILLIONS, CURRENT PRICES USD BILLIONS, . 7 7. 39 74.29 70.97 61.19 59.03 .

.

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 .

AFRICA FDI INFLOWS TOTAL AFRICA FDI TO GDP RATIO

economies are increasingly attracting foreign Most LDCs and fragile states in Africa struggle resource-rich and are oil and gas producers; investment and are projected to account for a to attract FDI. FDI flows into African LDCs and Nigeria and Angola are the first and second larger share of FDI into Africa.71 For example, fragile states grew by 50% between 2006 and largest oil producers in Africa.75 The remaining FDI inflows to Ethiopia rose by 46% in 2016, 2015 but retreated by 5% in 2016, a five-year African LDCs and fragile states accounted for largely due to investments in infrastructure low as FDI to resource-rich countries continued just 0.7% of global FDI inflows and 1.8% of FDI and manufacturing.72 FDI inflows to Africa are to decline.74 Just six countries accounted for inflows to developing countries in 2016. projected to rise in 2017, to about $65 billion, 75% of FDI inflows into all 42 African LDCs as oil prices start to pick up and economic and/or fragile states: Angola, Egypt, Nigeria, diversification and improved prospects Ethiopia, Mozambique and Congo. With the increase the interest of investors.73 exception of Ethiopia, all of these nations are

Figure 1 Source: UNCTAD, ‘World Investment Report 2017’, Annex Table 1. Notes: Data in current prices. Somalia is excluded due to missing data. 41 FIGURE 2: FDI TO AFRICA IS CONCENTRATED IN A FEW RESOURCE- AFRICAN COUNTRIES NEED TO IMPLEMENT RICH COUNTRIES REFORMS TO ATTRACT AND MANAGE PRIVATE INVESTMENT

By 2050, the youth population of Africa is expected to be 10 times the size of the European Union’s youth population.76 This demographic trend places the continent on the brink of a ‘demographic dividend’. But Africa will only be able to seize this huge demographic potential if the right steps are taken now to ensure that the 22.5 million new workers that will enter the economy every year between now and 2035 have access to quality employment.77 The right set of policy reforms is essential to attract responsible private investment that will create decent jobs. Such reforms must improve the investment climate for foreign investors and bolster local entrepreneurs by increasing access to productive inputs, cross-border transport infrastructure and business skills to scale up their activities. Reforms not only help attract investment but are also crucial for regulating investment and ensuring the best outcomes for the country concerned.78

However, even with the right policies in place, many African countries, particularly LDCs and fragile states, still face structural KEY > barriers to foreign investment, such as the small size of most African economies and financial systems blocking access to LESS THAN $100 MILLION international financial markets. International public support plays $100–$499 MILLION a key role in addressing these structural problems, including by $500–$999 MILLION $1,000–$4,999 MILLION accelerating the structural transformation of African economies. $5,000–$9,999 MILLION $10,000+ MILLION BETTER GOVERNANCE RESOURCE RICH Corruption is a tax on growth79 and is particularly damaging to intra-regional trade, infrastructure procurement and domestic resource mobilisation. Rigged procedures and cronyism in public procurement deter foreign investors from tendering

42 Figure 2: FDI Average Inflows, 2014–2016. Source: UNCTAD, ‘World Investment Report 2017’, Annex Table 1. Note: Data in current USD millions. CHAPTER 3 PRIVATE INVESTMENT FOR DEVELOPMENT IMPACT

ETHIOPIA

Although it is a landlocked LDC, Ethiopia was the sixth largest recipient of FDI in Africa in 2016. The country attracted $3.2 billion in FDI in 2016, up 46% from 2015 and more than 22 times higher than in 2010, propelled by investments in infrastructure and manufacturing.80

Ethiopia has attracted foreign investors because of its political stability, strong economic growth and gradually diversifying economy.81 Other attractions include the development of large industrial parks, a large and cheap labour force, low power prices and improved infrastructure, and significant competitive incentive packages (including tax holidays and exemptions from custom duty).82 The government has been actively investing in energy and road transport infrastructure to improve the environment for business, and business regulations have been simplified.83 However, more reforms are needed to further improve the country’s business environment, including simplifying procedures to start a business, obtain construction permits, protect minority investors and obtain credit. In order to strengthen its competitiveness, Ethiopia will need to improve its performance in areas such as access to finance, foreign currency regulation, tax rates, efficiency in government bureaucracy, and infrastructure supply and services.84

for large infrastructure projects.85 Proven Digitising customs procedures has also been obligations have more developed credit solutions include the implementation of effective in tackling corruption at borders; markets, vibrant small and medium-sized Integrity Pacts86—signed agreements between automation is even recognised as a powerful enterprise (SME) networks and higher levels procuring authorities, civil society and bidding anti-corruption tool by the World Customs of development.91 African governments should companies, all of whom commit to abide Organization (WCO)’s Arusha Declaration strengthen their judiciary systems, enabling by strong integrity standards embedded on Customs Integrity.90 Robust investment courts to enforce contractual obligations in the contract, plus adoption of the Open promotion policies should contain a zero effectively, and introduce a Systemic Investor Contracting Data Standard and social tolerance clause against corruption and should Response Mechanism92—a public feedback auditing.87 For example, ‘ProZorro’, an electronic be preceded by a clear cost-benefit analysis mechanism that allows foreign investors procurement platform set up by pro bono comparing losses in revenues foregone due to resolve complaints as early as possible anti-corruption activists in 2015, helped to rebates being granted to investors against in a transparent and efficient way, before reform Ukraine’s ineffective and corrupt public gains in terms of job creation, knowledge and taking any legal action. Political stability is procurement system.88 One year later, the technological transfers. also crucial to attract long-term investors. public procurement market had grown in terms Finally, a strong financial system is also vital of volume and of numbers of purchases and for investors. African governments should participants, while the average expected cost JUDICIAL, POLITICAL boost the capacity and independence of per lot had decreased by 68% and the number AND FINANCIAL STABILITY national supervisory authorities, improve risk of contracts signed with only one bidder fell by Countries with an efficient judiciary where management oversight and enhance contract 89 93 more than half. courts can effectively enforce contractual enforcement mechanisms.

43 HUMAN CAPITAL Accessing skilled and capable workers remains a major challenge. If Africa’s new generation is not equipped with the right set of skills to successfully find employment, then the continent will miss a great opportunity. African leaders should commit to a plan that makes education work for every girl by breaking down every barrier to girls learning, investing in every teacher, monitoring every learning outcome and connecting every classroom. African governments should also align employability interventions with a market-based approach. Vocational training, for example, should be linked to concrete opportunities that have been identified in the labour market. Ideally, market assessments should be youth-led so that young people can gain first-hand perspectives on the local economy, build relationships with potential employers and strengthen their job search skills.97

AID CAN PLAY A KEY ROLE IN INDUSTRIAL POLICIES help investors integrate new production plants BOOSTING PRIVATE INVESTMENT, Investors need information about countries’ into regional chains and access a wider pool of 95 BUT IT HAS TO BE USED IN THE market opportunities and their comparative mobile human capital. Upgraded transport advantages—including skilled labour, arable infrastructure, along with technology and RIGHT CIRCUMSTANCES AND land, a growing middle class, good market energy infrastructure, must be part of regional WITH STRONG SAFEGUARDS access to the wider region and reliable economic development corridors, along with International financial institutions (IFIs) and infrastructure. African governments can play a digitised customs procedures and one-stop 96 donors can play a key role in attracting private facilitating role by investing in data collection, border posts. Governments in neighbouring investment to developing countries. First, processing and dissemination and by making countries must coordinate their industrial policies to truly stimulate economic activity. international public finance (including aid) it available to companies.94 Cross-border can work towards improving the investment transport infrastructure should be prioritised to climate and tackling structural weaknesses

44 CHAPTER 3 PRIVATE INVESTMENT FOR DEVELOPMENT IMPACT

credits,98 trade and supply chain finance and which aims to leverage €3.35 billion of ODA more. These are critical to alleviate private to stimulate private investment and mobilise investors’ concerns over possible losses. up to €44 billion—and possibly double that if Member States agree to contribute.102 One particular tool has become increasingly popular—blended finance, on which this Other recent initiatives have aimed to scale up section focuses. There is no single widely global private finance through public support. accepted definition of blending, but it can The G20, under Germany’s leadership, has be broadly defined as a mix of concessional launched the Compact with Africa initiative to public funds, typically ODA grants (or loans, intensify sustainable private investment in a guarantees, equity, etc.), with investments number of countries on the continent. These from public and private financiers to leverage African countries will partner with the G20, additional finance to invest in development. the World Bank, the International Monetary Fund and the African Development Bank to Under pressure to meet SDG financing implement a package of reforms to reduce needs, donors are increasingly seeing the risk and attract investors.103 Although this private sector as the best way to fill financing is a welcome step, it is essential that these gaps. A 2015 study found that private compacts extend to more fragile states and sector engagement had become a priority include specific proposals and commitments in the development strategies of 19 out of from the private sector, as well as setting 99 in such economies through investing in the 23 donors. Although it still represented a objectives and milestones to increase capacity of local businesses, strengthening very small share of total flows to developing investment and create jobs by 2020. institutions and public financial management, countries, total private finance mobilised by and investing in human capital and skills official development finance interventions As part of the 18th replenishment of the training. Donors can also provide technical grew by around 20% annually over the period International Development Association cooperation on trade, business environments, 2012–14, with more than 70% benefiting middle (IDA18), the World Bank Group has created investment and productive capacity, such as income countries (MICs).100 It is estimated that a $2.5 billion Private Sector Window (PSW) advice on structuring investment contracts. between 2007 and 2015 some €2 billion of EU to stimulate private sector investment in IDA ODA grants were blended with private flows recipient countries, with a focus on fragile and In addition, a large variety of financial tools are in 240 projects, generating around €20 billion conflict-affected states.104 It will be deployed available to donors and development finance of loans from European financial institutions through four facilities: (1) a Local Currency institutions (DFIs) to tackle impediments to and regional development banks to help Financing Facility; (2) a Risk Mitigation Facility foreign investment in Africa. These include unlock investments worth around €43 billion to provide project-based guarantees without risk mitigation instruments such as currency in developing countries.101 The EU is expanding sovereign backing; (3) a MIGA Guarantee exchange rates, interest rates, commodity the use of blended finance in Africa through Facility to expand coverage of the World price risk management products, export the European External Investment Plan (EEIP), Bank’s Multilateral Investment Guarantee

45 In line with the growing importance and attention given to ODA as a ‘catalyser’ of private investment, the OECD DAC has been working to modernise its ODA reporting rules to allow ODA to be channelled through a wide range of private sector instruments (PSIs). This process is expected to be finalised by the end of 2018. During these discussions, countries need to make sure that the new accounting rules fairly reflect donor efforts and that the right safeguards are in place in order to maintain the credibility of ODA. If badly designed, these new rules could allow transactions on near market terms to count as ODA. DAC members must ensure that there is no inflation of aid and that transparency and accountability are underlying elements of the new DAC methodology. In parallel, the DAC has been working on a new broader measure, Total Agency (MIGA) guarantees;105 and (4) a Blended and provide lending on very competitive Official Support for Sustainable Development Finance Facility. terms. Their hybrid nature, between public aid (TOSSD). No decision has been made yet, but and private investment, gives DFIs a unique TOSSD could include the total amount provided Blending operations are often done through DFIs. role to play in blending facilities, by bridging by donors in PSIs (not just the grant element or A DFI is a publicly owned financial institution— the divides in language, motive and modus ‘donor effort’) as well as the mobilised private owned by a single government (bilateral) or operandi between public and private sector sector funds. multiple governments (multilateral)—that actors.107 Most donors have shifted more ODA provides credit via loans, equity and more, to their private investment arms. In January In addition to attracting more foreign capital, on commercial or concessional terms, to of this year, for example, the UK Parliament blending can stimulate job creation, knowledge public or private borrowers in developing passed a bill allowing the Department for transfer, and institutional development all countries.106 DFIs differ from governmental International Development (DFID) to raise the while aiming for development impact. However, development agencies in that they adhere to ceiling on aid funds spent through the CDC, many challenges also exist in the practical market rules and seek to be financially viable. the UK's DFI, to £6 billion, potentially doubling application of blended finance, including a DFIs get their capital from development funds the size of CDC's portfolio. The bill also propensity towards MICs, potential negative or benefit from public guarantees, ensuring allows DFID to increase the cap again to £12 social and environmental impacts (such as their creditworthiness. This allows them to billion at a later date, subject to human rights abuses and environmental raise money on international capital markets parliamentary approval .108 damage caused by large infrastructure

46 CHAPTER 3 PRIVATE INVESTMENT FOR DEVELOPMENT IMPACT

47 being subject to commercial privacy. This projects between 2007 and 2014). lack of data hampers meaningful scrutiny to help understand the opportunities and risks 3. PROVEN ADDITIONALITY involved in blending and to make informed Additionality can refer to three concepts— policy decisions and track progress. financial additionality (public finance only subsidises projects that would not 2. EVIDENCE OF IMPACT ON POVERTY otherwise be viable for the private sector); AND DEVELOPMENT developmental additionality (the public It is difficult to make a direct link between contribution helps increase development blended finance and poverty reduction.111 impacts); and value additionality (the While this can be partly explained by the public contribution offers non-financial fact that investments have indirect benefits development value, e.g. environmental that appear only over time, it is also likely standards). Additionality is an essential due to investments being made in the wrong requirement in blending facilities, as it areas and not making an impact on poverty. ensures that scarce ODA resources are projects) and limited evidence showing the A growing body of literature, including from not unnecessarily subsidising the private civil society organisations,112 the European opportunities and risks.109 Thus, there is an sector, but it has been a difficult outcome Court of Auditors113 and the European important need to balance a scaling up of to measure and demonstrate, partly Commission,114 raises important concerns support for these instruments with protection because there is no standard approach to with regard to blended finance. The G77— 118 of scarce aid resources, and to evaluate their measurement. Donors also tend to focus the largest negotiating bloc of developing development and social impact. on financial additionality at the expense of countries in the UN—has expressed developmental additionality, and there is a The main challenges and risks in blending, and concerns about the lack of evidence for the low bar in requirements for self-assessments recommendations to mitigate them, include development impact of blended finance.115 by donors.119 the following. The most recent EU evaluation116 provides an overall positive assessment of the impacts 4. DEVELOPMENT FOCUS 1. MORE AND BETTER DATA of EU blended finance but also highlights AND CREDIBILITY OF ODA There are very few data available on how important shortcomings. Most significantly, Increasing the use of blending without much ODA is being used to leverage private the study found that, until the end of 2013, significantly scaling up ODA could mean finance globally. According to a 2015 DAC EU blending projects did not properly target that less ODA is available for other uses, survey, ODA helped to mobilise $36.4 billion the poor.117 The study also reveals that, including grants to meet basic needs in the from the private sector in 2012–14. However, although projects in low-income countries most vulnerable countries. The share of ODA there are no data on how much ODA was used have shown that blending has a potential to provided through blending needs to be closely to stimulate these private investments.110 This fight poverty and to address the challenges monitored in order to minimise the diversion is due to the lack of a common definition and in these countries, EU blended finance has of aid from other investments. Inappropriate monitoring mechanism, as well as projects overwhelmingly focused on MICs (72% of all accounting of PSIs could risk inflating ODA

48 CHAPTER 3 PRIVATE INVESTMENT FOR DEVELOPMENT IMPACT

by reporting as aid non-concessional flows or non-flows (e.g. guarantees that have not been used). This could create RECOMMENDATIONS ON PRIVATE INVESTMENT a perverse incentive to favour PSIs over other forms of aid. 1. African countries need to improve the investment climate and 5. COUNTRY OWNERSHIP strengthen their policy and regulatory frameworks to ensure that private Blended facilities often do not align with country ownership investments are aligned with the Sustainable Development Goals. 120 and national policies. Donors may also choose to channel 2. Donors must ensure that private finance complements rather than aid through blended finance as it better serves their own replaces vital public investments and other concessional financing. national interests by supporting domestic companies, leading Precious aid resources should be protected and increased. to tied aid.121 One study found that the aid policies of nine out of 23 donors explicitly mentioned supporting the donor country 3. Donors and partner countries must agree on a common definition, or its own businesses abroad.122 guidelines and assessment frameworks for the development impact of blended finance to provide evidence of poverty reduction and 6. DEBT SUSTAINABILITY prevention of environmental and social damage and must assess Increases in the level of public lending could also lead to debt risks. increases in developing countries’ debt accumulation, 4. Blended finance should meet development effectiveness principles, at potentially unsustainable levels, which restrains their including country ownership, and aligning with national priorities. domestic fiscal space as well as their ability to attract other sources of finance. In the case of private blending, there is a 5. Countries must implement the UN Ruggie principles and the risk that private liabilities will become public liabilities if the OECD Guidelines for responsible business conduct by the end of projects fail.123 2017 and must ensure that companies investing abroad comply also with the Business Principles for Countering Bribery developed by Transparency International. CONCLUSION 6. Alongside incentives to improve the quantity and quality of FDI, partners must do more to strengthen the domestic private Private investment is essential to achieve the SDGs, and must be sector in African countries. better directed to African countries, in particular LDCs and fragile states. ODA can play a role in stimulating private investments in 7. The DAC must protect the core aim of ODA to eradicate extreme developing countries, but it must be used carefully and sparingly poverty and must ensure that reforms do not blur the line between so as to protect and preserve precious concessional resources development goals and commercial motivations. There must for use in poverty reduction. be reforms on tied aid in order to prevent any weakening of the development focus of ODA. However, private finance cannot fill all the financing gaps. Domestic resource mobilisation is essential for the delivery of public services and ODA remains vital, in particular for the most vulnerable countries that struggle to raise sufficient domestic resources.

49 50 CHAPTER 4 COUNTRY PROFILES

52 Australia 64 Italy 54 Canada 66 Japan 56 EU Member States 68 The Netherlands and Institutions 70 Sweden 60 France 72 The United Kingdom 62 Germany 74 The United States

51 TABLE 1: AUSTRALIA’S ODA: GLOBAL, LDC, AFRICA, SSA, AFRICAN FRAGILE STATES AUSTRALIA AND IN-DONOR REFUGEE COSTS

2015–16 2016 ODA, NET OF DEBT RELIEF Australia’s development assistance declined for the fourth consecutive year, CHANGE

with total aid falling to $3 billion in 2016. Aid as a proportion of gross national $3.02 billion Global 12.73% income (GNI) continues to decrease, dropping to just 0.25% in 2016. While (AUD 4.06 billion)

$860.35 million official development assistance (ODA) to least developed countries (LDCs) ODA to LDCs 6.83% (AUD 1.16 billion) declined in monetary value, it actually increased as a percentage of total $431.19 million ODA, to 28.5%. Although the Australian government continues to focus its ODA to Africa (AUD 580.10 20.17% million) development assistance on the Indo-Pacific region, ODA to Africa actually $413.17 million ODA to sub-Saharan (AUD 555.85 24.11% increased by 20% in 2016, reaching $431.19 million. Africa million)

0.04 percentage Total ODA/GNI 0.25% Australia’s aid sector is adjusting to major effectiveness of the aid programme, rather point funding cuts. Australia’s development than committing to specific funding levels.125 assistance budget is set to hit an historic low ODA to LDCs as 1.80 percentage In sub-Saharan Africa, Australia focuses on 28.51% of 0.22% of GNI in 2016–17, and given further % of total ODA points funding cuts introduced in the 2017–18 budget, leadership and human capacity development, agricultural productivity, humanitarian is predicted to keep dropping to 0.20% of GNI 0.01 percentage ODA/GNI to LDCs 0.07% by 2021.124 assistance and women’s empowerment and point gender equality.126 In 2016, Australia continued In the lead-up the 2016 federal election, to focus on empowering women and girls. More In-donor refugee neither of the two major parties acknowledged than 80% of investments, regardless of their costs as % 0.00% NO CHANGE of total ODA Australia’s international commitment to reach objectives, are intended to effectively address 0.7% of ODA/GNI. The opposition Australian gender issues in their implementation. For the In-donor refugee costs as % 0.00% NO CHANGE Labor Party promised to reverse some of the second year in a row, however, Australia failed of bilateral ODA cuts of previous years, but did not commit to to reach this target, falling just short with 2014–15 2015 ODA, NET OF DEBT RELIEF fully restoring the aid budget to pre-2013 levels. 78% of aid investments rated as satisfactorily CHANGE The Liberal-National Coalition government, addressing gender equality.127 $294.90 million which returned to office with a slim (and much ODA to African (AUD 392.48 8.89% fragile states reduced) majority, focused on improving the million)

52 Table 1 Sources: OECD DAC Table 1, Table 2a and Preliminary Release (April 2017). Note: Figures are in current prices and percentage changes in real terms. COUNTRY PROFILES AUSTRALIA

SUPPORT FOR FIGURE 1: AUSTRALIA’S GLOBAL, AFRICA AND LDC ODA: VOLUME AND % OF GNI, 2007–16 PRIVATE INVESTMENT

Private sector development is one of the . 3,946

two pillars of Australia’s aid programme 3,755 3,629 3,636

(alongside human development). In late 3,486

2015, the government released a ministerial 3,284 . 3,042 statement and strategy on its aid investment 2,941 in private sector development, which includes 2,725 2,520 the priorities of building better business and 0.36% .

0.33% % OF GNI < KEY investment environments and maximising the 0.34% 0.29% 0.29% 0.31% 128 0.32% 0.29% development impact of individual businesses. 0.29% 0.25% GLOBAL Under its aid strategy performance targets, PRICES 2015 USD MILLIONS, Australia requires all of its new aid investments . AFRICA 0.11% 0.09% 0.09% 0.09% 0.09% LDCs to explore ways to promote private sector 0.08% 0.08% 0.08% 0.08% 0.07% engagement or engage the private sector. This ODA/GNI 129 LDC ODA/GNI target was met in 2015–16. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 . Australia supports a mix of bilateral and global initiatives targeted at increasing private sector development. This includes a Business the enabling environment to attract private done, as demonstrated by Australia’s ranking Partnerships Platform that enables businesses investment infrastructure.132 The Fund seeks on the Aid Transparency Index (rated ‘fair’ and and their partners to approach the Australian to help low and middle-income countries ranked 25 out of 46 countries).135 government with proposals that meet the to develop the policies, laws, regulations, country’s aid objectives. The first round institutions, and capacity to encourage private attracted AUD 8.4 million in private investment130 investment through grants and technical RECOMMENDATIONS (matched by AUD 3.3 million of government assistance.133 funds) for partnerships in seven countries in • Australia must reverse the continuing decline areas such as agribusiness, financial services of its development assistance budget, and women’s economic empowerment.131 TRANSPARENCY which has hit historically low levels, and set itself back on a path towards meeting its Australia also supports the World Bank-led Australia improved the transparency of its aid international aid commitments. Public Private Infrastructure Facility (PPIAF), programme by publishing a detailed summary providing AUD 2 million in 2015–16 to support of the aid budget in 2016 (for the 2016–17 • Australia needs to take further steps the Bank’s efforts to help governments of financial year), now known as the ‘Orange to improve the transparency of its aid low and middle-income countries to create Book’.134 However, there is still much work to be programme.

Figure 1 Sources: OECD DAC Tables 1 and 2a and Preliminary Release (April 2017). Notes: ODA in 2015 constant prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows (Africa and LDC imputed multilateral flows in 2016 are estimated by ONE). 53 TABLE 1: CANADA’S ODA: GLOBAL, LDC, AFRICA, SSA, AFRICAN FRAGILE STATES CANADA AND IN-DONOR REFUGEE COSTS

2015–16 2016 ODA, NET OF DEBT RELIEF In 2016, Canada was the 10th largest DAC donor, providing nearly $4 billion CHANGE in ODA. In addition to a significant ODA decline in 2016, its 2017 budget had $3.96 billion Global (CAD 5.25 4.41% no new increases to the International Assistance Envelope136 —the principal billion) $1.38 billion source of programmable aid. Canada’s largest share of ODA still goes to ODA to LDCs (CAD 1.83 8.51% Africa, demonstrating its continued commitment to the region. Following billion) $1.61 billion her appointment as Minister of International Development, Marie-Claude ODA to Africa (CAD 2.13 5.46% billion) Bibeau has redirected and increased Canada’s efforts in fragile contexts to $1.53 billion ODA to sub-Saharan 137 (CAD 2.03 0.94% deliver on the commitments made by the Prime Minister, Justin Trudeau. Africa billion) Notably, an increased intake of Syrian refugees has led to rising in-donor 0.02 percentage Total ODA/GNI 0.26% refugee costs. point

ODA to LDCs as 1.56 percentage 34.94% Despite Prime Minister Trudeau’s pledge on By 2021–22, Global Affairs Canada aims to % of total ODA points ‘restoring and renewing’ Canada’s international ensure that at least “95% of bilateral assistance assistance, no significant increases in ODA initiatives target or integrate gender equality 0.01 percentage ODA/GNI to LDCs 0.09% have materialised. In June 2017, Canada and the empowerment of women and girls”.139 point announced its new Feminist International The new policy also recognises that half of In-donor refugee 4.88 percentage Assistance Policy, outlining six priority action the world’s poorest people live in sub-Saharan costs as % 9.85% points UP areas: gender equality and the empowerment Africa, and targets at least 50% of bilateral of total ODA of all women and girls; human dignity, aid to the region.140 Although the new policy In-donor refugee 7.22 percentage which mainly concerns health and nutrition, is a step in the right direction, there is great costs as % 14.39% points UP education and humanitarian action; economic concern about the trajectory of Canada’s ODA, of bilateral ODA

growth that works for everyone; environment as this ambitious policy requires additional 2014–15 2015 ODA, NET OF DEBT RELIEF and climate action; inclusive governance, funds for implementation. Two days before the CHANGE democracy, human rights and the rule of law; announcement of the feminist development ODA to African $1.26 billion 138 31.54% and peace and security. policy, the government announced a 70% fragile states (CAD 1.61 billion)

54 Table 1 Sources: OECD DAC Table 1, Table 2a and Preliminary Release (April 2017). Note: Figures are in current prices and percentage changes in real terms. COUNTRY PROFILES CANADA

increase in defence expenditure, while FIGURE 1: CANADA’S GLOBAL, AFRICA AND LDC ODA: VOLUME AND % OF GNI, 2007–16 development received no new funding.141 . SUPPORT FOR PRIVATE INVESTMENT 4,463 4,390 4,380 4,277 In March 2017, the Trudeau government 4,224 . 4,089 4,035

announced the operationalisation of its 3,897 development finance institution (DFI), with 3,835 3,644 142 0.33% a CAD 300 million commitment. The DFI 0.32% 0.32% is newly established, so the details of its key 0.30% 0.30% . principles, governance and strategy are still in 0.29% 0.27% 0.28% the works. It is housed within Canada’s export 0.26% promotion authority, Export Development 0.24% Canada (EDC); however, experts have argued % OF GNI that there are a few downsides to that,143 the

USD MILLIONS, 2015 PRICES 2015 USD MILLIONS, . main one being that EDC has limited experience 0.15% of tackling integrated development challenges, 0.13% 144 including the fight to end extreme poverty. 0.11% 0.10% 0.10% < KEY 0.11% 0.11% 0.11% 0.09% . GLOBAL TRANSPARENCY 0.08% AFRICA Canada is ranked 12th in the Aid Transparency LDCs Index, and has a good record on transparency ODA/GNI and efficiency, especially on development 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 . LDC ODA/GNI assistance.145 It places a very low administrative burden on its country recipients, which allows indicators available to the International Aid make a significant impact for women and aid to be more efficient in country. Canada also Transparency Initiative (IATI). girls through its new policies. sets a good example in terms of information sharing with other donors. However, there • Canada should ensure that funds channelled is room for improvement. Canada should RECOMMENDATIONS through its new DFI clearly promote economic develop internal systems at Global Affairs that • Canada must set out a plan to get back on development and poverty reduction, and would allow Canada to share more up-to-date track with increases to its aid budget by should be targeted to the poorest countries data, including budgets, as well as making all 2020, in order to contribute to the SDGs and and fragile states.

Figure 1 Sources: OECD DAC Tables 1 and 2a and Preliminary Release (April 2017). Notes: ODA in 2015 constant prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows (Africa and LDC imputed multilateral flows in 2016 are estimated by ONE). 55 TABLE 1: EU MEMBER STATES’ ODA: GLOBAL, LDC, AFRICA, SSA, AFRICAN FRAGILE STATES EU MEMBER STATES AND IN-DONOR REFUGEE COSTS

2015–16 2016 ODA, NET OF DEBT RELIEF AND INSTITUTIONS CHANGE $79.18 billion Global 10.27% The EU as a whole reached a new high in 2016 by providing $81.36 billion (€71.61 billion) 146 (€73.55 billion) in ODA, retaining its status as the world’s largest donor. $18.06 billion ODA to LDCs150 7.35% Throughout the year, both EU Institutions and Member States were under (€16.33 billion)

$24.61 billion constant pressure to respond adequately to the unprecedented number ODA to Africa151 7.68% (€22.25 billion) of asylum seekers arriving in European countries. As a consequence, ODA to sub-Saharan $20.62 billion 8.37% increases in ODA have been mainly directed towards tackling these Africa152 (€18.64 billion) additional needs, focusing on migration control instead of poverty 0.03 percentage Total ODA/GNI 0.49% eradication. The European Consensus on Development reiterates point that poverty eradication must remain the primary objective of the EU’s ODA to LDCs as 0.89 percentage 22.92% development policy,147 which is why the EU must ensure that aid delivers for % of total ODA153 point

the poorest people, especially in the poorest and most fragile countries. In-donor refugee 1.68 percentage costs as % 14.99% points UP of total ODA154

time, while ODA to LDCs increased by 7.35% In-donor refugee EU MEMBER STATES 2.47 percentage costs as % 22.98% in 2016, it accounts for less than a quarter of points UP of bilateral ODA155 By investing 0.49% of their collective GNI in the Member States’ collective aid—a declining ODA, EU Member States are making progress 2014–15 proportion since 2015—and fragile states 2015 ODA, NET OF DEBT RELIEF CHANGE towards their commitment to reach 0.7% ODA/ in Africa saw their share decrease between 149 GNI within the timeframe of the post-2015 2014 and 2015. Member States must ODA to African $15.95 billion 3.29% agenda.148 However, 15% of their total aid in urgently reverse this trend and scale up fragile states (€14.38 billion) 2016 was used to cover in-donor refugee costs investments targeted towards LDCs and and never left their own borders. At the same African fragile states.

56 Table 1 Sources: OECD DAC Table 1, Table 2a and Preliminary Release (April 2017).Note: Figures are in current prices and percentage changes in real terms. COUNTRY PROFILES EU MEMBER STATES AND INSTITUTIONS

EU INSTITUTIONS FIGURE 1: EU INSTITUTIONS’ GLOBAL, AFRICA AND LDC ODA VOLUME, 2007–16

The EU Institutions also increased ODA spending in 2016 to address challenges related to migration. As a result of these challenges, the EU has continued to shift its approach to development by pursuing new strategies and instruments to manage migratory flows, leverage private sector investment and boost security capacity in partner countries.156 Yet only investments in the long-term development 15,625 of the poorest countries are investments in 15,566 global stability. This is why the EU Institutions must shift their focus back to addressing the 14,491 13,907 root causes of extreme poverty and instability 13,670 13,598 and must secure a strong development budget that brings the EU closer to achieving its objective of ending extreme poverty by 2030.157 11,372 As the EU rethinks how its future Multiannual 11,259 10,797 Financial Framework (MFF)158 can better match 10,323 its policy priorities, and with Brexit creating additional uncertainty around the involvement of the UK, it will be crucial to ensure that efforts PRICES 2015 USD MILLIONS, aimed at security, defence and migration do not come at the expense of life-saving development programmes.

SUPPORT FOR PRIVATE INVESTMENT

< KEY In the past year, the EU has renewed its efforts to strengthen and improve its engagement GLOBAL with the private sector in developing countries, AFRICA most notably with the launch of the European LDCs External Investment Plan (EEIP), which will 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Figure 1 Sources: OECD DAC Tables 1 and 2a and Preliminary Release (April 2017). Notes: ODA in 2015 constant prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows (Africa and LDC imputed multilateral flows in 2015 are estimated by ONE). 57 TABLE 2: EU INSTITUTIONS’ ODA: GLOBAL, seek to leverage €3.35 billion of EU ODA to the data they need to follow the money and LDC, AFRICA, SSA, AFRICAN FRAGILE STATES stimulate private investment in Africa and the root out corruption.162 This is the kind of AND IN-DONOR REFUGEE COSTS Neighbourhood.160 The success of the plan transformative win-win legislation that could will depend on clear investment windows with release unprecedented domestic resources 2015–16 2016 ODA, NET OF DEBT RELIEF CHANGE substantial allocations to fragile states and a for development and ultimately reduce the foundation on analysis of market failure, needs dependence of developing countries on aid. $15.74 billion Global 14.31% and bottlenecks. (€14.23 billion) RECOMMENDATIONS $4.23 billion TRANSPARENCY ODA to LDCs 21.17% (€3.82 billion) • The EU must ensure that every new The European Commission is an original commitment to deal with short-term crises

$6.29 billion signatory to IATI. Three of the EC’s departments is additional to planned ODA, so that EU aid ODA to Africa 18.76% (€5.69 billion) publish data to IATI and they have all been can continue to focus on long-term poverty ranked as ‘good’ in the Aid Transparency Index eradication, particularly for life-saving 161 ODA to sub-Saharan $4.94 billion since 2015. health, nutrition and education programmes. 23.74% Africa (€4.47 billion) With the budgets of both the EU and Member • The EU must scale up aid invested in long-

ODA to LDCs as 1.52 percentage States under pressure, Europe desperately term development, especially in the poorest 26.86% % of total ODA points needs innovative approaches to finance the and most fragile African countries. fight against extreme poverty. By making In-donor refugee public information on who really owns • The EU must ensure that ODA used to costs as % N/A N/A leverage private investment supports only of total ODA159 companies and trusts in the revision of the Anti-Money Laundering Directive (AMLD), projects that would not otherwise have 2014–15 2015 ODA, NET OF DEBT RELIEF received financial investment, benefits local CHANGE the EU could give citizens and journalists, including in developing countries, access to actors and stimulates sustainable growth ODA to African $3.26 billion in the most fragile and poorest regions. 10.39% fragile states (€2.94 billion)

EU Member States There are 28 Member States of the EU; 20 are members of the OECD Development Assistance Committee (DAC). The eight EU Member States which are not members of the DAC report some aid data, but in less detail than full DAC members.

EU refers to EU Institutions and Member States. In tracking ODA, this refers to ODA provided by the Member States and the EU Institutions (i.e. via loans extended by the European Investment Bank, which are not imputed to Member States).

58 Table 2 Sources: OECD DAC Table 1, Table 2a and Preliminary Release (April 2017). Note: Figures are in current prices and percentage changes in real terms. COUNTRY PROFILES EU MEMBER STATES AND INSTITUTIONS

59 TABLE 1: FRANCE’S ODA: GLOBAL, LDC, AFRICA, SSA, AFRICAN FRAGILE STATES FRANCE AND IN-DONOR REFUGEE COSTS

2015–16 2016 ODA, NET OF DEBT RELIEF For the second consecutive year, France increased its total ODA slightly CHANGE

(by 5.25%) to reach $9.4 billion. However, ODA represented only 0.38% of $9.41 billion Global 5.25% GNI, far below the 0.7% target. The new political leadership that emerged (€8.51 billion)

$2.34 billion after the 2017 elections needs to step up current efforts on ODA. President ODA to LDCs 3.53% (€2.12 billion) Emmanuel Macron’s commitment to reach a figure of 0.55% ODA/GNI

163 $4.16 billion before the end of his term is welcomed, but it is insufficient. France ODA to Africa 6.47% (€3.76 billion) should aim to reach the 0.7% target by the end of the presidential term ODA to sub-Saharan $3.16 billion 0.79% in 2022. Africa (€2.86 billion)

0.01 percentage Total ODA/GNI 0.38% Despite a steady rise since 2010, France’s ODA at the Agence Française de Développement point remains well below aid levels recorded at the (AFD—the French development agency) for beginning of the mandate of former President those countries.164This focus on African fragile ODA to LDCs as 0.41 percentage 24.86% François Hollande, i.e. 0.42% of ODA/GNI states is a welcome trend that should be % of total ODA point ($9.67 billion in 2011, at 2015 constant prices, pursued, together with increased attention a difference of $297 million). In addition to to LDCs. President Macron has repeatedly mapping out a clear trajectory towards the emphasised his determination to boost the ODA/GNI to LDCs 0.09% NO CHANGE 0.7% target, France should also sharpen amount of French ODA allocated to Africa, In-donor refugee its focus on LDCs, as the share of its ODA especially to LDCs and fragile states. The 0.46 percentage costs as % 4.55% point UP allocated to these countries decreased French government needs to deliver on this of total ODA between 2015 and 2016 and is now below 25%. promise and should double the share of ODA In-donor refugee President Macron’s commitment to allocate allocated to LDCs and fragile states in the 0.74 percentage costs as % 7.9 8 % point UP 0.15% of GNI to LDCs (compared with 0.09% in region in the next five years, from 29% to 58% of bilateral ODA 2016) is not ambitious enough. by 2022. 2014–15 2015 ODA, NET OF DEBT RELIEF CHANGE France increased its ODA to fragile states in Africa by 9.41% between 2014 and 2015, to reach ODA to African $2.30 billion 9.41% $2.3 billion and has set up a specific facility fragile states (€2.07 billion)

60 Table 1 Sources: OECD DAC Table 1, Table 2a and Preliminary Release (April 2017). Note: Figures are in current prices and percentage changes in real terms. COUNTRY PROFILES FRANCE

SUPPORT FOR FIGURE 1: FRANCE’S GLOBAL, AFRICA AND LDC ODA: VOLUME AND % OF GNI, 2007–16 PRIVATE INVESTMENT . Strengthening its cooperation with private 9,973 0.44% 9,665 0.42% 9,385 9,286 sector actors is part of AFD’s strategy for 2012– 0.42% 0.40% 9,368 8,996 8,910 0.38% 165 0.38% 8,900 16, mostly through its subsidiary Proparco, 0.37% . its private sector financing arm, which was 8,047 0.35% 0.36% 7,328 founded nearly 40 years ago.166 In 2016, private 0.32% . sector funding was identified by AFD as one < KEY

of its areas of action, and this represented % OF GNI 167 14% of its activity. In the same year, loans . GLOBAL 0.12% 0.13% allocated to the private sector increased by PRICES 2015 USD MILLIONS, 0.11% AFRICA 0.10% 0.09% 0.09% 0.09% 0.09% 0.09% 8%. Moreover, Proparco allows AFD to facilitate LDCs 0.09% . access to funding for 54,000 small and ODA/GNI 168 medium-sized enterprises (SMEs) each year. LDC ODA/GNI Its budget has been stable over the past few 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 . years at €1.1 billion, and in 2015 it accounted for 13% of AFD’s activities.169 It focuses on Africa TRANSPARENCY RECOMMENDATIONS (62% of its budget in 2015 was allocated to the continent) and fragile states (one-third of France’s development agency joined the • From its 2018 budget onwards, France 170 the 2015 budget). In 2015, Proparco reported IATI initiative in December 2016, which was needs to set a path to reach the 0.7% ODA/ 171 the following impacts from its investments: welcome, as the country is still lagging behind GNI target by 2022. This trajectory should be 874,000 jobs created or safeguarded; 47% of in terms of aid transparency. Its Foreign translated into law and ODA should increase the employees of the banks and companies Affairs and Finance Ministries were graded, significantly from 2018 onwards.176 financed are women; and two million people respectively, as ‘poor’ and ‘very poor’ in the 2016 gained access to micro-credit. Aid Transparency Index.173 The recent • France should double the share of its ODA launch of an AFD online data platform174 allocated to fragile states and LDCs in Africa AFD can also engage in non-sovereign lending. is notable, although two other data by 2022, to reach a proportion of 58% of ODA In 2016, non-sovereign lending, including portals already exist175 and it therefore targeted towards the continent’s poorest to local/sub-national authorities, totalled creates additional complexity for citizens, and most fragile countries. €3.9 billion, which represented 42% of AFD’s CSOs and parliamentarians to ‘follow the activities.172 Amongst its tools, AFD can also • France should improve its aid transparency money’. use guarantees and equity. by making sure that relevant data from all French agencies and ministries are made available in open data format and on a single, centralised online platform.

Figure 1 Sources: OECD DAC Tables 1 and 2a and Preliminary Release (April 2017). Notes: ODA in 2015 constant prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows (Africa and LDC imputed multilateral flows in 2016 are estimated by ONE). 61 TABLE 1: GERMANY’S ODA: GLOBAL, AFRICA, SSA, AFRICAN FRAGILE STATES AND IN- GERMANY DONOR REFUGEE COSTS

2015–16 2016 ODA, NET OF DEBT RELIEF German ODA hit a record high in 2016 and, for the first time, the country CHANGE

reached its target of spending 0.7% of GNI on ODA. However, while there $24.63 billion Global 36.15% was a considerable boost to the budget for development cooperation,177 (€22.27 billion)

most of the overall increase was due to a spike in in-donor refugee ODA to LDCs No Data No Data costs, which accounted for 25% of all German ODA in 2016. All parties

$5.40 billion in Parliament are in favour of maintaining the 0.7% spending rate even ODA to Africa 19.31% (€4.88 billion) when in-donor refugee costs decline. The coming years will tell if the next ODA to sub-Saharan $3.95 billion 28.09% German government has the political will to uphold this target and invest Africa (€3.57 billion) additional funds where they are needed most. 0.17 percentage Total ODA/GNI 0.70% point Tackling the root causes of forced migration steadily declining, reaching a historic low through aid is high on Germany’s political in 2015. The final DAC figures published in ODA to LDCs as No Data No Data agenda. As such, development assistance December 2017 will reveal how much LDCs % of total ODA last year exceeded the planned increases have benefited from the overall increase in

announced in 2015. Germany’s G20 presidency German aid. A recent government report ODA/GNI to LDCs No Data No Data emphasised—through the Partnership with on development cooperation reveals that Africa initiative—the importance of harnessing the share of German ODA flowing through In-donor refugee 8.38 percentage the continent’s demographic dividend and multilateral channels also fell to a historic costs as % 25.25% points UP empowering youth. Rural development and low in 2015.179 of total ODA food security have also emerged as strategic In-donor refugee 10.38 priorities for German development cooperation costs as % 31.83% percentage with the continent.178 SUPPORT FOR of bilateral ODA points UP 2014–15 PRIVATE INVESTMENT 2015 ODA, NET OF DEBT RELIEF Despite its repeated commitment to spend CHANGE 0.20% of GNI on aid to LDCs, Germany has DEG (Deutsche Investitions- und ODA to African $2.16 billion 11.99% failed to fulfil this pledge. The share of overall Entwicklungsgesellschaft), Germany’s DFI, fragile states (€1.95 billion) ODA going to these countries has been facilitates sustainable business initiatives

62 Table 1 Sources: OECD DAC Table 1, Table 2a and Preliminary Release (April 2017). Note: Figures are in current prices and percentage changes in real terms. COUNTRY PROFILES GERMANY

in developing and emerging economies to FIGURE 1: GERMANY’S GLOBAL, AFRICA AND LDC ODA: VOLUME AND % OF GNI, 2007–16 enhance growth and local living conditions.180 In 2016, DEG had a portfolio worth €8.6 . billion, of which €2.3 billion was invested in

28 African countries in a range of sectors, 24,366 including finance, tourism, manufacturing, infrastructure, agribusiness and energy.181 DEG . finances banks and funds, and offers loans as well as various arrangements of equity capital 0.70% 182 and mezzanine finance. 1 7,897

Between 2014 and 2016, DEG committed €4.2 . billion for private sector investment, which in 0.52% turn unlocked total investments of €21.5 billion 13,726 % OF GNI

183 12,229 11,849

in emerging and developing economies. 11,696 0.41%

0.38% 11,325 0.38% . 10,460 In 2016, companies co-financed by DEG PRICES 2015 USD MILLIONS, 0.38% 9,781 0.35% 0.36% contributed tax payments of approximately

8,613 0.31% < KEY €280 million and created 414,000 jobs 0.28% in beneficiary countries.184 In 2016, DEG GLOBAL . investments received on average a grade B AFRICA 0.10% 0.11% 0.10% for their effectiveness, based on good and 0.09% 0.09% 0.09% 0.09% 0.09% 0.08% LDCs fair employment, local income, development ODA/GNI of markets and sectors, environmental LDC ODA/GNI stewardship and benefits for local 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 . communities.185

DEG plans to increase its activities in countries TRANSPARENCY RECOMMENDATIONS eligible for World Bank IDA funding and to Germany’s aid transparency has improved, • Germany should uphold the target of conflict-affected countries to 40% by 2021, up as GIZ, its implementing agency for technical spending 0.7% ODA/GNI, even as in-donor from 35% in 2016.186 In addition, it is currently assistance, has increased the frequency of refugee costs decline over the coming years. setting up a co-financing facility with a 50% its reporting, scoring ‘good’ on the 2016 Aid contribution from BMZ, the Federal Ministry Transparency Index.188 As a next step, the • To maximise the effects of development for Economic Cooperation and Development, Federal Foreign Office should start reporting cooperation in reducing poverty, Germany which will direct investments to fragile states its ODA-eligible funds according to the should focus funds on LDCs and fragile and to countries hosting large numbers of states and should strengthen multilateral 187 IATI standard. refugees. funding mechanisms.

Figure 1 Sources: OECD DAC Tables 1 and 2a and Preliminary Release (April 2017). Notes: ODA in 2015 constant prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows (Africa imputed multilateral flows in 2016 are estimated by ONE). Germany did not report bilateral ODA to LDCs in the 2016 preliminary DAC figures. 63 TABLE 1: ITALY’S ODA: GLOBAL, LDC, SSA, AFRICAN FRAGILE STATES AND IN-DONOR ITALY REFUGEE COSTS

2015≠16 2016 ODA, NET OF DEBT RELIEF Italy’s aid spending has continued its upward trend for the fourth year in a CHANGE

row, with investments increasing by $2.24 billion over this period. However, $4.71 billion Global 19.03% in-donor refugee costs account for a worrying proportion of its overall (€4.26 billion) $889.88 million aid budget. In 2016 such costs amounted to $1.66 billion (76% of bilateral ODA to LDCs (€804.70 1.34% ODA), which was more than Italy invested in Africa. These in-donor million)

$1.20 billion costs could explain the decline in the proportion of Italian aid going to ODA to Africa 11.35% (€1.09 billion) LDCs. $978.71 million ODA to sub-Saharan (€885.03 12.49% Italy seemed to be on track to meet its with a rapid scale-up of investments, with a Africa million) commitment to become the fourth largest G7 view to investing 0.5% ODA/GNI by the end of donor in terms of GNI by the time it hosted G7 the next Parliament, and with at least half of 0.04 percentage Total ODA/GNI 0.25% leaders in May 2017, as promised by former this allocated to LDCs and fragile states. point Prime Minister Matteo Renzi in 2015. The preliminary data show that Italy and Canada Italy sought to put Africa at the centre of its G7 ODA to LDCs as 3.30 percentage 18.89% are tying as the fourth largest G7 donors, when agenda in 2017, hosting leaders at a meeting % of total ODA points including debt relief. in Taormina, Sicily, which was physically closer to the continent than they have ever ODA/GNI to LDCs 0.05% NO CHANGE However, while Foreign Minister Angelino met before. If Italy is to be a good partner, it Alfano has called development assistance must step up to ensure that international “a major strategic investment and a pillar of anti-corruption legislation is strengthened. In-donor refugee 10.29 costs as % 35.35% percentage 189 our foreign policy”, and despite showing Italy must therefore back EU rules to make of total ODA points UP ambition and making increases in the short access to beneficial ownership information term, Italy’s long-term aid commitments have In-donor refugee 19.85 of companies and trusts public, as part of costs as % 76.07% percentage remained flat. The government has committed the revision of the EU Anti-Money Laundering of bilateral ODA points UP again this year to reach 0.3% ODA/GNI by Directive (AMLD); these structures are often 2014–15 190 2015 ODA, NET OF DEBT RELIEF 2020, and 0.7% ODA/GNI by 2030. With the vehicles used by the corrupt to siphon CHANGE elections due to take place by mid-2018, funds out of developing countries. ODA to African $731.20 million political parties should commit to adopting a 4.60% fragile states (€659.14 million) long-term approach to development, coupled

64 Table 1 Sources: OECD DAC Table 1, Table 2a and Preliminary Release (April 2017). Note: Figures are in current prices and percentage changes in real terms. COUNTRY PROFILES ITALY

SUPPORT FOR FIGURE 1: ITALY’S GLOBAL, AFRICA AND LDC ODA: VOLUME AND % OF GNI, 2007–16 PRIVATE INVESTMENT

Boosting the role of the private sector is a key . objective for Italian development cooperation, with a particular focus on infrastructure, water, 4,669 sustainable energy and rural electrification.191 The 2014 reform of Italy’s law on development . cooperation mandates a long-established 3,923 investment bank, Cassa Depositi e Prestiti (CDP),

to use innovative financial tools to leverage both 3,372 3,302 public finance and its own resources in order . 3,057 3,053 to further Italy’s development objectives. This 2,907 0.25%

includes using its own resources to leverage 2,638 % OF GNI 2,450 private sector investment in development and 2,425 0.22% 192 to contribute to EU blending operations. 0.19% . USD MILLIONS, 2015 PRICES 2015 USD MILLIONS, 0.18% 0.17% 0.17% CDP is authorised to intervene in all countries 0.16% 0.15% 0.14% 0.14% < KEY on the OECD DAC recipients list; however, it will prioritise interventions in Italy’s priority GLOBAL 0.07% . countries, as outlined in its three-year strategic 0.06% AFRICA 0.05% 0.05% 0.05% 0.05% 0.05% plan.193 The North Africa, Middle East, Sahel 0.04% 0.04% 0.04% LDCs and Horn of Africa regions currently receive ODA/GNI special attention. Investment decisions will also LDC ODA/GNI 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 . consider Italy’s historical relationship with the partner country and an assessment of their political, commercial and cultural ties.194 CDP the next government must prioritise timely • Italy must improve the quality of its aid received its mandate to operate with its private publication of comprehensive, forward-looking by ensuring that it focuses on poverty funds at the end of 2016, and the first initiatives information on aid in an open data format. eradication, particularly in LDCs and fragile are due to be launched in the second half of 2017. states, and that it takes ambitious steps to improve transparency. RECOMMENDATIONS TRANSPARENCY • Italy should support public registers for • Ahead of the 2018 elections, political parties EU companies and trusts as part of the Italy’s aid transparency is currently rated as ‘very should commit to investing 0.5% ODA/GNI revision of the EU’s Anti-Money Laundering poor’ by the Aid Transparency Index.195 Therefore, by the end of the next Parliament. Directive.

Figure 1 Sources: OECD DAC Tables 1 and 2a and Preliminary Release (April 2017). Notes: ODA in 2015 constant prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows (Africa and LDC imputed multilateral flows in 2016 are estimated by ONE). 65 TABLE 1: JAPAN’S ODA: GLOBAL, LDC, SSA, AFRICAN FRAGILE STATES AND IN-DONOR JAPAN REFUGEE COSTS

2015–16 2016 ODA, NET OF DEBT RELIEF Japan is the largest DAC Asian donor, with a net ODA of $10.4 billion in CHANGE

2016. Japan is expected to increase its aid in 2017 after it committed to $10.35 billion Global 1.04% expand its foreign affairs budget during the 2016 G7 Summit.196 However, (¥1.13 trillion)

$4.06 billion an increasing focus on directing investments towards emerging countries ODA to LDCs 0.57% (¥441.98 billion) with special vulnerabilities to help them avoid the ‘middle income trap’ has

197 $3.13 billion played a role in the decline in support to LDCs. ODA to Africa 7.1 3% (¥340.21 billion)

ODA to sub-Saharan $2.72 billion Japan allocates the largest share of its bilateral promoting human security, improving the 7. 69 % Africa (¥295.82 billion) ODA to infrastructure projects and to countries investment climate, and promoting natural in Asia.198 Other sectors of bilateral spending resource and energy development.201 It also include water and sanitation, humanitarian aid, continued to demonstrate leadership in global Total ODA/GNI 0.20% NO CHANGE agriculture, education, and health and nutrition. health, pledging $1.1 billion to international While ODA contributions to sub-Saharan Africa health organisations in May 2016 within the ODA to LDCs as 0.64 percentage 202 39.24% and to Africa overall appear to show a decline framework of its G7 presidency. Japan also % of total ODA point from last year, ONE anticipates that levels will allocates a portion of its ODA to gender equality increase again, given Japan’s commitment to initiatives by working to improve education a three-year, $30 billion assistance package for women worldwide, encouraging female ODA/GNI to LDCs 0.08% NO CHANGE at the Sixth Tokyo International Conference on entrepreneurship and addressing issues of African Development (TICAD VI) in 2016.199 human trafficking and gender-based violence.203 In-donor refugee 0.00008 costs as % 0.002% percentage The 2016 Priority Policy for International of total ODA point DOWN Cooperation focused on achieving stability in the SUPPORT FOR In-donor refugee 0.0002 Middle East, expanding quality infrastructure, PRIVATE INVESTMENT costs as % 0.003% percentage of bilateral ODA point DOWN the SDGs (primarily the improvement of 2014–15 global health), women’s empowerment and Japan supports the principle of a transition 2015 ODA, NET OF DEBT RELIEF CHANGE addressing climate change.200 In Africa, Japan’s away from countries relying on ODA towards priorities include rebuilding health systems enhancing private sector participation to foster ODA to African $2.31 billion 20.09% (particularly in the Ebola affected countries), economic development in Africa. In August fragile states (¥278.98 billion)

Table 1 Sources: OECD DAC Tables 1 and 2a and Preliminary Release (April 2017). Notes: ODA in 2015 constant prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows (Africa and LDC imputed 66 multilateral flows in 2016 are estimated by ONE). COUNTRY PROFILES JAPAN

2016 it co-hosted TICAD VI, where it announced FIGURE 1: JAPAN’S GLOBAL, AFRICA AND LDC ODA: VOLUME AND % OF GNI, 2007–16 a three-year, $30 billion assistance package financed by both the public and private . sectors.204 This funding is directed toward three key priority areas of partnership: promoting 9,273 structural economic transformation through 9,177 economic diversification and industrialisation, boosting resilient health systems and ensuring 8,464 . 7,9 07 7,81 5 social stability for shared prosperity. 7,76 4 7,391 Furthermore, the Japanese government has 7,210 partnered with the African Development 6,588 Bank Group on the Enhanced Private Sector .

Assistance for Africa (EPSA) initiative to 5,738 support private sector development.205 Together EPSA1 (2007–11) and EPSA2 (2012–16) % OF GNI 0.20% 0.20% provided almost $3 billion for nearly 100 private 0.19% 0.20% 0.20%

USD MILLIONS, 2015 PRICES 2015 USD MILLIONS, 0.18% . sector projects, mainly in the transportation 0.17% 0.18% and energy sectors. At TICAD VI, EPSA3 was 0.16% launched, pledging $3 billion over three years 0.14% < KEY (2017–19). The EPSA initiative has provided 0.09% Africa with a net economic benefit of roughly 0.08% 0.08% 0.08% 0.08% 0.08% . GLOBAL 0.07% 0.06% AFRICA $4.7 billion, has created 60,000 new jobs and 0.05% has generated more than $500 million in tax 0.04% LDCs revenues.206 ODA/GNI LDC ODA/GNI 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 . TRANSPARENCY

Japan has not yet met its Busan commitment RECOMMENDATIONS policies, including public company ownership on aid transparency, with the Ministry of Foreign and country-by-country reporting. • Japan should prioritise its aid towards the Affairs (MOFA) scoring ‘very poor’ and the Japan poorest countries, particularly in Africa. • The Ministry of Foreign Affairs and JICA International Cooperation Agency (JICA) scoring must work to meet the Busan commitment ‘fair’ on the Aid Transparency Index.207 • Japan should improve its performance on on aid transparency. facilitating financial transparency, focusing specifically on improvements on a range of

Figure 1 Sources: OECD DAC Tables 1 and 2a and Preliminary Release (April 2017). Notes: ODA in 2015 constant prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows (Africa and LDC imputed multilateral flows in 2016 are estimated by ONE). 67 TABLE 1: THE NETHERLANDS’ ODA: GLOBAL, LDC, SSA, AFRICAN FRAGILE STATES AND THE NETHERLANDS IN-DONOR REFUGEE COSTS

2015–16 2016 ODA, NET OF DEBT RELIEF The Netherlands, once seen as an aid champion, has moved further and CHANGE

further away from this position over the past few years. While high levels $4.93 billion Global 13.35% of in-donor refugee costs allowed the Netherlands to reach the 0.7% (€4.46 billion)

$1.16 billion ODA/GNI target in 2015, it has once again fallen below that level. The new ODA to LDCs 11.41% (€1.05 billion) government will be the key to determining whether the country can once

ODA to sub-Saharan $1.35 billion again regain its leadership, or whether it will fall further behind in the 5.55% Africa (€1.22 billion) collective effort to achieve the SDGs. 0.1 percentage Total ODA/GNI 0.65% point Dutch aid has been declining for years and is formed, as politicians attempted to build approaching an all-time low as a percentage of a workable coalition. A new government will ODA to LDCs as 5.22 percentage 23.46% its GNI. Budget cuts by governments since 2010 provide a huge opportunity for improvement. % of total ODA points have had a severe negative impact on Dutch It can live up to the Netherlands’ promise to 0.01 percentage aid capacity in LDCs and in sub-Saharan Africa spend 0.7% of its national income on aid, it ODA/GNI to LDCs 0.15% over the past decade, even if this past year has can make in-donor refugee costs additional point seen some increases. If the budget cuts and to the ODA budget, and it can aim to direct at In-donor refugee 13.99 the use of future ODA to cover current in-donor least 50% of its ODA to LDCs. The search for costs as % 9.35% percentage refugee costs are not reversed and repaired, new partner countries is a great opportunity of total ODA points DOWN the Netherlands’ contribution to international to help with the latter ambition.208 There is In-donor refugee 17.43 development will shrink even further in the next also an opportunity for a structural increase costs as % 14.77% percentage few years. Without any budgetary changes, it in the humanitarian aid budget, building on of bilateral ODA points DOWN will become hard for the country to do its part the positive practices of the past few years of 2014–15 2015 ODA, NET OF DEBT RELIEF to reach the SDGs by 2030. the Dutch Relief Fund.209 A new government CHANGE should also explore new priorities, including ODA to African $903.52 million The Dutch people elected a new parliament 11.05% adding education to its aid agenda, to fragile states (€814.5 million) in March 2017, but by the time this report was complement its current focus on employment written no new government had yet been and empowerment.

68 Table 1 Sources: OECD DAC Table 1, Table 2a and Preliminary Release (April 2017). Note: Figures are in current prices and percentage changes in real terms. COUNTRY PROFILES THE NETHERLANDS

SUPPORT FOR FIGURE 1: THE NETHERLANDS’ GLOBAL, AFRICA AND LDC ODA: VOLUME AND % OF GNI, 2007-16 PRIVATE INVESTMENT

In the past five years the aid and trade portfolios . have been combined under the responsibility 5,680 of a single minister. In 2012, Lilliane Ploumen, 5,520 5,291 5,114 5,062 Minister for Foreign Trade and Development 5,060 4,922 4,736

Cooperation, laid out her plans in a document 4,611 0.81% entitled ‘A World to Gain: A New Agenda for Aid, 4,500 0.79% 0.75% 0.74% . 210 0.76% 0.74% Trade and Investment’. More than ever, she 0.69% 0.66% 0.65% said, Dutch aid would be used to support private 0.63% investments. One flagship policy in this area was the Dutch Good Growth Fund (DGGF), but % OF GNI this has proven challenging to implement.211 < KEY USD MILLIONS, 2015 PRICES 2015 USD MILLIONS, . GLOBAL Some observers have been critical about this 0.23% 0.23% 0.21% AFRICA paradigm shift to a joint approach to aid and 0.18% 0.17% 0.17% 0.15% 0.14% 0.15% trade.212 They have queried whether the Dutch 0.13% LDCs private sector really supports the ending of ODA/GNI extreme poverty in developing countries and, LDC ODA/GNI 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 . whether it is better placed to do this than more traditional approaches to development. The Netherlands’ Court of Audit has called A new government has an opportunity to RECOMMENDATIONS for a systematic overview of results achieved improve the measurement of results and to and lessons learned, supplemented with implement best practices. • The new Dutch government should representative impact assessments.213 In the restore the development budget to the same report the Court advised the minister internationally agreed goal of 0.7% to create more focus in the financing facility TRANSPARENCY ODA/GNI, aiming to spend 50% on LDCs for businesses, to make sure costs are not and fragile states, and it should make in- The 2016 Aid Transparency Index now rates excessively high. donor refugee costs additional to ODA. the Netherlands as ‘good’.214 The development The private sector can play a crucial role ministry seeks to ensure that Dutch aid • The next Minister for Foreign Trade and 215 in fighting poverty, and when government achieves concrete results. The Netherlands Development Cooperation should add funds are used to support the private was one of the first donors to use IATI and it education to the development agenda sector, there needs to be strong evidence has announced its intention to continue doing to complement the current focus on 216 of development impact and additionality. so in the future. employment and empowerment.

Figure 1 Sources: OECD DAC Tables 1 and 2a and Preliminary Release (April 2017). Notes: ODA in 2015 constant prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows (Africa and LDC imputed multilateral flows in 2015 are estimated by ONE). 69 TABLE 1: SWEDEN’S ODA: GLOBAL, LDC, AFRICA, SSA, AFRICAN FRAGILE STATES SWEDEN AND IN-DONOR REFUGEE COSTS

2015–16 2016 ODA, NET OF DEBT RELIEF Sweden’s official aid declined by 31% last year compared with 2015, due CHANGE

to substantially lower in-donor refugee costs. The country fell short on $4.87 billion Global 31.11% its commitment to provide 1% of GNI in aid in 2016. However, the Swedish (SEK 41.67 billion)

$1.36 billion government is expected to increase aid levels to 0.99% of GNI in 2017 ODA to LDCs 7.39% (SEK 11.64 billion) (SEK 46.1 billion).217 Anticipated higher economic growth this year could

$1.45 billion potentially increase aid volumes. ODA to Africa 12.31% (SEK 12.41 billion)

ODA to sub-Saharan $1.36 billion In December 2016, the Swedish government at SEK 6.8 billion. A sum of SEK 1.3 billion has 10.63% Africa (SEK 11.61 billion) adopted a new Aid Policy Framework outlining been reallocated to the aid budget as a result eight focus areas: 1) human rights, democracy of the lower estimated number of asylum 0.47 percentage and the rule of law; 2) gender equality; 3) the seekers, down from 51,200 to 34,700. However, Total ODA/GNI 0.94% point environment and climate change, and the critics argue that more money still needs to be sustainable use of natural resources; 4) peace reallocated after data showed that only around ODA to LDCs as 7.15 percentage 27.93% and security; 5) inclusive economic development; 11,400 refugees had applied for asylum in the % of total ODA points 6) migration and development; 7) health first six months of 2017.219 Consequently, the equity; and 8) education and research. Conflict government is expected to amend the 2017 0.03 percentage 220 ODA/GNI to LDCs 0.26% prevention is a new issue area for Sweden and budget again in September. point is also a key priority for its current membership of the UN Security Council. Swedish aid funding Sweden’s next general election is due to be In-donor refugee 16.94 is consequently expected to shift towards held no later than September 2018, with recent costs as % 16.87% percentage of total ODA points DOWN conflict-affected areas, gender equality and polls predicting major losses for the incumbent the environment and climate change.218 government. In the current outlook, it will be In-donor refugee 25.93 unlikely for either the centre-left or the centre- costs as % 23.72% percentage of bilateral ODA points DOWN Sweden’s aid budget has been hit hard by the right to form a majority government without the 2014–15 refugee crisis in Europe, creating uncertainty support of the Sweden Democrats, a far-right 2015 ODA, NET OF DEBT RELIEF CHANGE around its ODA levels. In April 2017, the and anti-immigration party. A new government government amended the financial budget for coalition is thus expected to substantially alter ODA to African $1.36 billion 11.71% this year and estimated in-donor refugee costs the country’s current development policies. fragile states (SEK 11.44 billion)

70 Table 1 Sources: OECD DAC Table 1, Table 2a and Preliminary Release (April 2017). Note: Figures are in current prices and percentage changes in real terms. COUNTRY PROFILES SWEDEN

SUPPORT FOR FIGURE 1: SWEDEN’S GLOBAL, AFRICA AND LDC ODA: VOLUME AND % OF GNI, 2007–16 PRIVATE INVESTMENT . Swedish aid is used to catalyse additional flows and to mobilise know-how and expertise from 1.40% the private sector. The government has a cross- 7,0 89 cutting approach to supporting private finance. Projects are implemented in a wide range of 1.12% . areas, including the environment, agriculture, 1.09% market development, and democracy, human 1.01% 0.98% 0.97% 0.98% 0.97% rights and gender. In mid-2015, private 0.92% 5,177 0.94%

sector engagements totalled SEK 6.48 billion 4,884 4,675 4,441 4,418 (approximately $760 million), accounting 4,415 4,159

4,152 .

for roughly 8% of the Swedish International % OF GNI 3,920 Development Cooperation Agency (Sida)’s 221 overall portfolio of commitments. PRICES 2015 USD MILLIONS, < KEY Swedfund, the national development finance 0.34% 0.32% 0.32% 0.31% . institution, has a stated goal to eliminate 0.30% 0.30% 0.29% 0.29% 0.29% GLOBAL 0.26% poverty by fostering sustainable business AFRICA in challenging and promising markets. The LDCs creation of decent jobs in the poorest countries ODA/GNI is at the centre of Swedfund’s mission. Its four LDC ODA/GNI strategic objectives encompass community 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 . development, sustainability, financial viability and fighting corruption. The government has proposed capital injections of SEK 400 million TRANSPARENCY RECOMMENDATIONS annually for 2017–18 to meet these goals. Swedfund has increasingly turned its attention Sweden is among the top performers on • The Swedish government should immediately to Africa, with the continent accounting for transparency efforts and implementing the amend its 2017 financial budget and 60% of the institution’s investments.222 Busan commitments, including promoting reallocate money back into the aid budget as transparency and placing low administrative a result of the lower number of asylum seekers. burdens on recipient countries. Sweden’s aid transparency is currently rated as ‘very good’ • The Swedish government should honour by the Aid Transparency Index.223 its commitment to provide 1% of GNI in aid in 2017.

Figure 1 Sources: OECD DAC Tables 1 and 2a and Preliminary Release (April 2017). Notes: ODA in 2015 constant prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows (Africa and LDC imputed multilateral flows in 2016 are estimated by ONE). 71 TABLE 1: THE UK’S ODA: GLOBAL, LDC, AFRICA, SSA, AFRICAN FRAGILE STATES THE UNITED KINGDOM AND IN-DONOR REFUGEE COSTS

2015–16 2016 ODA, NET OF DEBT RELIEF In 2016, the UK met its commitment to spend 0.7% of GNI on ODA, as CHANGE

enshrined in UK law. An updated GNI methodology, combined with $18.01 billion Global 8.34% economic growth, led to a 10% increase on its 0.7% expenditure in 2015, (GBP 13.34 billion) 224 $5.61 billion amounting to an additional £1.2 billion in ODA. The Department for ODA to LDCs 2.37% (GBP 4.16 billion) International Development (DFID) is due to report against the target to

$6.70 billion allocate 50% of ODA to fragile states and regions in its 2016–17 Annual ODA to Africa 2.21% (GBP 4.97 billion) Report and Accounts.225 ODA to sub-Saharan $6.18 billion 5.94% Africa (GBP 4.58 billion) On 29 March 2017, the UK triggered Article 0.7% target and it should be commended 50 and began the two-year countdown to for doing so, in spite of pressure—especially Total ODA/GNI 0.70% NO CHANGE its departure from the European Union. The from the media—to reallocate aid budgets to Brexit negotiations will be a major focus of domestic issues. However, there is also a stated ODA to LDCs as 1.82 percentage UK international relations over the coming intention to reform international aid rules. While 31.17% years as the country seeks to re-establish its there is always scope for improvement in how % of total ODA points position on the global stage and agree new aid is spent, it must maintain its focus on 0.01 percentage independent trading agreements. poverty reduction and the alleviation of ODA/GNI to LDCs 0.22% point suffering. To lose this focus would be likely The outcome of the recent general election, to reduce its impact, both in terms of In-donor refugee 0.97 resulting in a minority government, has development and of the UK’s global influence costs as % 3.05% percentage created an unstable political environment and as an international development leader. of total ODA point UP a weakened negotiating position on Brexit. In-donor refugee 1.48 Nevertheless, as the UK seeks to leave the costs as % 4.77% percentage EU, there is a renewed focus on the role that SUPPORT FOR of bilateral ODA points UP

the country plays in the world, and how this is PRIVATE INVESTMENT 2014–15 2015 ODA, NET OF DEBT RELIEF maximised through military, diplomatic and CHANGE development engagement. The UK aid budget is DFID has a stated focus on economic ODA to African $5.73 billion development and recently published its 3.52% seen as a real asset in this regard. The current fragile states (GBP 3.75 billion) government has committed to retaining the economic development strategy.226 The strategy

72 Table 1 Sources: OECD DAC Table 1, Table 2a and Preliminary Release (April 2017). Note: Figures are in current prices and percentage changes in real terms. COUNTRY PROFILES THE UNITED KINGDOM

has 11 ambitions, including using trade as a FIGURE 1: THE UK’S GLOBAL, AFRICA AND LDC ODA: VOLUME AND % OF GNI, 2007–16 poverty reduction tool, supporting sectors that unlock growth, enabling British companies to trade with developing countries and reaching the poorest and most marginalised people.227 This strategy underscores the need for blended . 20,092 finance. 0.70% 0.70% 0.70% 0.70% 18,545 17,986 Additionally, the funding cap of the CDC 1 7,761

Group, the UK’s DFI, was recently 0.57% 0.56% 0.56% . increased from £1.5 billion to £6 billion, 0.51% 13,819 with potential for a further increase to 13,741 13,738 £12 billion at a later stage.228 CDC has stepped up investments in more difficult 0.41% 12,028 % OF GNI environments, with a round 40% of . 0.35% 10,271 its investments in fragile and USD MILLIONS, 2015 PRICES 2015 USD MILLIONS, complex states,229 the most of any major 8,526 < KEY 0.24% 0.24% 0.23% 0.22% DFI. Since 2012, CDC has only been 0.20% 0.20% 0.19% involved in Africa and South Asia and has 0.18% GLOBAL 0.15% 0.16% . moved away from a purely ‘fund of AFRICA funds’ approach towards more direct LDCs investments. Priority sectors include ODA/GNI manufacturing, agribusiness, LDC ODA/GNI 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 infrastructure, financial institutions, . construction, health and education.230 TRANSPARENCY forth most transparent development agency DFID remains largely responsible for the UK’s aid in the AID Transparency in 2016.232 With a of suffering as the primary purposes of aid. budget. However, aid money is increasingly being focus on transparency and efficiency of the • Before further ODA is spent by other spent by the Foreign and Commonwealth Office UK aid spend, funding spent outside of DFID departments and in cross-departmental (FCO), the Department for Business, Energy and should strive to demonstrate similar high funds, there is a need to ensure that all Industrial Strategy (BEIS), the Department for standards. departments and funds spending ODA Environment, Food and Rural Affairs (Defra), the RECOMMENDATIONS reach the same levels of transparency and Ministry of Defence (MoD) and the contentious accountability as DFID, to ensure that UK aid Conflict, Stability and Security Fund (CSSF) • As DFID looks to modernise ODA, and to use continues to demonstrate effectiveness and and Prosperity Fund.231 DFID was ranked as aid as a soft power tool, an emphasis should efficiency. ‘very good’ and the be kept on poverty reduction and alleviation

Figure 1 Sources: OECD DAC Tables 1 and 2a and Preliminary Release (April 2017). Notes: ODA in 2015 constant prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows (Africa and LDC imputed multilateral flows in 2016 are estimated by ONE). 73 TABLE 1: THE US’ ODA: GLOBAL, LDC, AFRICA, SSA, AFRICAN FRAGILE STATES AND IN- THE UNITED STATES DONOR REFUGEE COSTS

2015–16 2016 ODA, NET OF DEBT RELIEF The United States remains the top provider of aid to developing countries. In CHANGE 2016, its contribution showed positive trends across the board, with global Global $33.58 billion 7. 0 3% aid increasing by 7%. However, the Trump administration’s proposals are

threatening these gains. Attempts to cut development assistance and the ODA to LDCs $11.78 billion 8.27% budget for the US Agency for International Development (USAID) are very

concerning and could have a negative impact on overall ODA numbers in ODA to Africa $12.50 billion 8.07% the coming years. ODA to sub-Saharan $12.51 billion 9.22% Africa The Trump administration is reviewing all famine response.234 ONE is working with allies on government structures, and its first budget Capitol Hill to ensure that current funding levels 0.01 percentage Total ODA/GNI 0.18% proposal suggests that it may seek to diminish are, at a minimum, maintained over the coming point the capabilities and independence of USAID. budget cycle, and that Congress provides ODA to LDCs as 0.40 percentage The President’s budget request to Congress strong oversight of efforts to restructure USAID. 35.07% for FY2018 proposed a sharp cut of one-third to % of total ODA point funding for USAID and the State Department, with development assistance targeted in SUPPORT FOR ODA/GNI to LDCs 0.06% NO CHANGE particular.233 If adopted, these cuts would PRIVATE INVESTMENT

adversely affect the poorest countries. In-donor refugee 1.14 The US government has a number of entities costs as % 5.02% percentage Congress, however, has pushed back against that leverage private sector investment abroad, of total ODA points UP the cuts and against proposals for restructuring including the Overseas Private Investment In-donor refugee 1.53 USAID. In an encouraging sign, Congress has Corporation (OPIC), the Export-Import Bank costs as % 6.04% percentage actually increased US spending on foreign (EXIM), MCC and the Department of Commerce. of bilateral ODA points UP assistance for the remainder of FY2017, with 2014–15 2015 ODA, NET OF DEBT RELIEF Gavi, the Millennium Challenge Corporation OPIC, its primary development finance CHANGE (MCC) and the African Development Fund institution, helps American businesses invest ODA to African $8.94 billion 2.90% all receiving a boost. This spending bill also in emerging markets by providing political fragile states included significant funding ($1.24 billion) for risk insurance, project and investment funds,

74 Table 1 Sources: OECD DAC Table 1, Table 2a and Preliminary Release (April 2017). Note: Figures are in current prices and percentage changes in real terms. COUNTRY PROFILES THE UNITED STATES

financing and other services.235 It is also the FIGURE 1: THE US’ GLOBAL, AFRICA AND LDC ODA: VOLUME AND % OF GNI, 2007–16 backbone of the Power Africa initiative, which aims to provide first-time access to electricity . for millions of people on the continent.236 To

date, Power Africa has leveraged more than 33,151 33,404 32,205 31,985 31,869 32,003 31,520

$54 billion in commitments from the public 30,974 237 and private sectors and has helped 80 29,059 projects generating a total 7,262 MW of power . 238 to reach financial close. As part of this work, 24,504 0.20% 0.20% 0.20% in 2016 alone OPIC supported 13 projects that 0.19% 0.19% 0.18% 0.18% 0.18% are projected to generate 919 MW of power.239 0.17% 0.16% % OF GNI . < KEY OPIC estimated that in 2016 its investments were set to support more than 10,000 local PRICES 2015 USD MILLIONS, GLOBAL 0.07% 0.07% 0.07% 0.07% jobs and generate $117.5 million in revenue 0.06% 0.06% 0.06% 0.06% 0.06% AFRICA 240 for developing countries. However, with 0.04% LDCs . its FY2018 budget proposal the Trump ODA/GNI administration has signalled its intent to LDC ODA/GNI close OPIC. It requested only $60.8 million to 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 . “manage the agency’s remaining $22 billion portfolio and initiate orderly wind-down TRANSPARENCY RECOMMENDATIONS activities”.241 US spending on foreign assistance has a • The US Congress must reject President MCC has also played a significant role in mixed record in terms of effectiveness and Trump’s proposed budget cuts to lifesaving attracting private investment to developing transparency. MCC is routinely rated as being assistance and maintain funding to these countries. Since it was established in 2004, among the most transparent development programmes at a time when the world is the body has received $10 billion in grants, agencies in the world and was ranked second facing unprecedented needs. with which it has leveraged nearly $5 billion in globally in the 2016 Aid Transparency Index.243 private sector investment and more than $450 USAID has made good strides towards • The United States should work to improve million in partner country contributions.242 improving its reporting and transparency—it has the transparency of its aid, by increasing increased the amount of information it publishes, what it publishes in regards to aid budgets and its score has improved by 18 percentage and results. points. However, it still does not publish key • The United States must prioritise its aid information such as performance data or to the world’s most vulnerable people. budgetary information for its development activities, thus ranking in the ‘fair’ category. 244

Figure 1 Sources: OECD DAC Tables 1 and 2a and Preliminary Release (April 2017). Notes: ODA in 2015 constant prices. Net ODA excludes bilateral debt relief, and includes both bilateral and multilateral flows (Africa and LDC imputed multilateral flows in 2016 are estimated by ONE). 75 76 METHODOLOGY

HOW DOES ONE MEASURE DEVELOPMENT ASSISTANCE?

In the annual DATA Report, ONE tracks official development assistance (ODA) flows from OECD Development Assistance Committee (DAC) donors to all developing countries, to Africa, sub-Saharan African, least developed countries (LDCs) and African fragile states. This tracking is based on preliminary data released by the OECD DAC in April each year, pertaining to the previous calendar year. The OECD DAC preliminary data for 2016 are available at http://www.oecd.org/dac/financing-sustainable-development/development-finance-data/. These preliminary data provide only a basic breakdown (for instance, by region but not by country, sector or ODA type) and are subject to revision in the final figures, which are released in December each year and include a detailed breakdown. Furthermore, regionally allocated bilateral flows do not necessarily include all types of development assistance for all DAC members and thus, for these providers, ODA volumes to Africa, sub-Saharan Africa and LDCs are likely to be higher in the final figures. There are no data on Germany’s bilateral ODA to LDCs in the preliminary data for 2016. The preliminary release also does not provide data on ODA to fragile states; therefore, this report uses the 2015 data for ODA going to fragile states.

The preliminary data for 2015 were revised for some countries in the final December 2016 release. These revised 2015 figures have been used for the purpose of this report. The data used in this report represent (unless otherwise stated) net flows and are taken from the OECD DAC’s online databases, which can be accessed at http://stats.oecd.org/. ONE analyses flows in US dollars, as reported by the DAC, and converts to other currencies only for current prices using the OECD’s annualised exchange rates; thus flows in these currencies should be taken as close estimations rather than exact figures. ONE includes historical data for all current DAC members, even though they were not all members of the DAC at the time (including Hungary, which became the 30th member of the DAC in 2016), in order to maintain a consistent comparison for aggregate amounts.

77 EUROPEAN UNION AID may result from in-donor costs, or some of BILATERAL AND which is more difficult to explain and may have MULTILATERAL FLOWS For its examination of the EU Member States in to do with poor reporting and/or limitations of this report, ONE uses data on the 28 Member the DAC’s coding system (e.g. for multi-country The DAC categorises ODA outflows as either States or, if not available, the 20 Member projects). Some DAC members prefer to report bilateral or multilateral. Bilateral ODA is States who are DAC members as a proxy. In their LDC share as a proportion of country- disbursed directly from donor country to the report, ‘EU’ refers to EU Institutions and specified aid, which would yield larger shares recipient country. This bilateral category also Member States. The EU profile reports data on than by using ONE’s method. In historical includes ‘earmarked’ multilateral flows— both ODA from the EU Member States and the analysis, ONE uses the DAC database’s list of contributions made by DAC providers to ‘EU Institutions’, which include both the portion LDCs (for the current year); this matches the specific recipients, but via multilateral of ODA imputed to Member States and the approach taken by the DAC in its own analysis, agencies. Multilateral ODA comprises DAC non-imputed portion (European Investment though it does miss out the four countries members’ core contributions to multilateral Bank (EIB) loans). Loans from the EIB are not (Botswana, Cape Verde, the Maldives and organisations, which are not disaggregated by included as ODA in the DAC statistics for country or region. The DAC ‘imputes’ providers’ Samoa) that have since ‘graduated’ from the the period 2008–10, due to questions over multilateral flows each year by applying the LDC list. their concessionality, and the only figures proportion of each multilateral organisation’s recorded under loan disbursements by the EU outflows to each region/country to each Institutions in the period 2008–10 are small REAL/CONSTANT DAC member’s total contribution to that amounts of equities. Following an agreement VS. NOMINAL/CURRENT TERMS multilateral organisation. However, neither reached in 2013, EIB loans were included in these DAC imputations nor multilateral DAC ODA statistics for the first time in the April Current or nominal values are not adjusted disbursements to developing countries/ 2013 release (of 2012 data), but only for the for inflation. Values in constant or real terms regions are included in the publication period since 2011. While ONE adheres to the include the effect of inflation. ONE reports of preliminary data in April—they are not official figures reported by the DAC, it should data in ‘current’ or ‘nominal’ prices in the value published until the final data release in be noted that this results in a statistical ‘cliff’ of the currency for that particular year. For December. Thus, in the DATA Report, ONE between 2010 and 2011. example, current price data shown for 2016 are uses a set methodology to estimate how based on 2016 prices. When comparing data much of each DAC member’s multilateral ODA can be imputed to sub-Saharan Africa ODA TO LDCs between years, ONE analyses data in ‘constant’ or ‘real’ terms, in the value of a particular base and LDCs, as indicated in the example below. year (2015 in the case of this report). Constant In its analysis of ODA to LDCs, ONE examines • In 2016, a DAC member provides $10 the proportion of each DAC member’s total terms are used to measure the true growth million in core contributions to a particular development assistance (not only country- between years, i.e. adjusting for the effects of multilateral agency. specified ODA) allocated to this group of price inflation. To calculate constant prices, countries. Many DAC members have a high ONE applies the country deflators published by • In 2015, this agency allocated 41% of its total proportion of country-unspecified ODA, which the DAC. disbursements to sub-Saharan Africa.

78 METHODOLOGY

• Thus, ONE estimates that in 2016 the DAC member provided $4.1 million (41% of $10 million) to sub-Saharan Africa via this multilateral agency.

ODA contributions to five groups of multilateral agencies are included in the DAC’s preliminary release: UN agencies, the European Commission, the World Bank, regional development banks and ‘other’. ONE repeats the steps outlined above for each of the five groups, and adds them together for the ODA provider’s total multilateral flows imputed to Africa, sub-Saharan Africa and LDCs. It then adds this to bilateral flows to give a full picture of each provider’s total aid flows to these groups of countries. ONE fully acknowledges that the figure arrived at by these calculations is an estimate, and that the final figures (which are published by the DAC in December each year) can vary significantly from this estimate. There are three main reasons for this variation: (1) due to lack of information for the most recent year, ONE assumes that the proportion of total funding that a multilateral agency allocates to a given region has held more or less steady from the previous year (whereas this proportion can increase or decrease); DEBT RELIEF bilateral debt relief in order to assess whether (2) the level of multilateral detail is greatly countries’ reported ODA flows represent increased in the final figures: in other words, Multilateral debt cancellation is included in new, increased resource flows. Debt relief ONE can better track each provider’s flows to ODA as tracked by this report. The cost to a DAC is immensely valuable and, as a result of it, each individual multilateral agency, rather than member of cancelling multilateral debt is paid developing country governments are now able the five main groupings listed above; and (3) through its contributions to the multilateral to spend resources on health, education and all the data in the April release (including ODA agency (e.g. the World Bank’s International critical infrastructure instead of unsustainable contributions to multilaterals) are preliminary Development Association or the African debt service payments. However, the rules and subject to change. Development Bank). However, ONE excludes on counting bilateral debt cancellation as

79 development assistance overstate the value of debt relief figures for sub-Saharan Africa as debt relief, and ONE believes that it should be a whole (although not Africa or LDCs). In the additional to ODA. absence of this information, ONE equates debt relief to sub-Saharan Africa with debt Under current rules, once debt has been relief to Africa and LDCs (as the figures are cancelled, providers can report the full face likely to be very close since 48 out of 54 value of the debt as ODA. This means that the African countries and two-thirds of LDCs principal, interest and penalties on arrears for are in sub-Saharan Africa). the whole period that the debt has remained unpaid are counted in the ODA figures at the point of cancellation, and are included in the TARGETS AND PAST PROGRESS DAC reports. This amount does not reflect either the value to the developing country or the ONE assesses the performance of aid providers cost to the DAC member country of cancelling against the aid commitments that they the debt. Exactly how much should be counted have made or that ONE is recommending that is unclear, due to lack of transparency by ODA they make. providers in terms of disclosing their internal At the Third Financing for Development accounting or budget pricing (e.g. market- Conference in Addis Ababa in 2015, countries to-market valuations). ONE remains hopeful reaffirmed previous commitments made that a more accurate means of accounting in Monterrey, including a commitment by for bilateral debt relief will become available developed countries to spend 0.7% of their so that, in the future, providers of ODA can be gross national income (GNI) on aid, and duly credited for the allocations they make directing 0.15–0.20% of GNI to LDCs. for bilateral debt cancellation in their annual Recognising the unique needs of LDCs, budgets. The Heavily Indebted Poor Countries the Addis Ababa Action Agenda (AAAA) (HIPC) initiative—the only major debt relief scheme in existence—has almost come to an also included a commitment to reverse the end, and there are only a few eligible African declining share of aid going to LDCs and a countries remaining. Therefore, ODA providers suggestion to allocate 50% of ODA to these 245 need to make budgetary provisions to achieve countries. Previously in the OECD DAC, DAC their targets without relying on ODA totals member states made a similar commitment inflated by bilateral debt cancellation figures. “to allocate more of total ODA to countries most in need, such as least developed In its preliminary figures, the DAC does not countries (LDCs), low-income countries, specify the level of debt relief received by small island developing states, land-locked individual countries. However, it does provide developing countries and fragile and conflict-

80 METHODOLOGY

affected states” and to “revers[e] the declining trend of ODA to LDCs”.246

In 2005, the EU agreed to collectively achieve ODA levels of 0.7% of GNI and 0.15–0.20% for LDCs by 2015. Having failed to meet this deadline, Member States recommitted in May 2015 to collectively reach 0.7% within the timeframe of the post-2015 agenda and to allocate 0.15% of their collective GNI to LDCs in the short term, and 0.20% within the timeframe of the post-2015 agenda.247

WHY ARE THERE SOMETIMES DIFFERENCES BETWEEN A COUNTRY’S OWN DATA AND DAC DATA?

There are a number of possible reasons for this. For example, a country’s own data may follow a compared with the preliminary estimates. Africa (from the African Union): Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cabo different financial year or a country may include In addition, government reporting is often Verde, Cameroon, Central African Republic, programmatic or assistance categories that based on budgets, while DAC reporting deals with annual disbursements. Finally, a number Chad, Comoros, Congo, Côte d’Ivoire, Democratic deviate from established DAC definitions and of countries use multiple coding, where an Republic of Congo, Djibouti, Egypt, Equatorial guidelines. Another possible reason is that activity will be coded for several sectors (for Guinea, Eritrea, Ethiopia, Gabon, the Gambia, multiple ministries may be responsible for instance, 20% to water, 50% to health, 30% Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, managing development assistance activities. to infrastructure), but DAC coding allows Liberia, Libya, Madagascar, Malawi, Mali, While the totality of each country’s ODA for only one sector per project. Mauritania, Mauritius, Morocco, Mozambique, programme should be collectively reported to Namibia, Niger, Nigeria, Rwanda, São Tomé the DAC, domestic reporting may cover only the and Príncipe, Senegal, Seychelles, Sierra activities of the main development assistance COUNTRY CLASSIFICATIONS Leone, Somalia, South Africa, South Sudan, ministry. Preliminary data do not include a full Sudan, Swaziland, Tanzania, Togo, Tunisia, ONE has used the following country picture of regional allocations. In the past, Uganda, Zambia and Zimbabwe. The Saharawi classifications in this report. there have often been substantial changes in Arab Democratic Republic (Western Sahara) flows to sub-Saharan Africa in the final data is not included.

81 Least developed countries (from the UN’s DOMESTIC RESOURCES between 2010 and 2016. Reliable, complete classification, as of May 2017): Afghanistan, AND ALLOCATION and timely data on domestic government Angola, Bangladesh, Benin, Bhutan, Burkina expenditure are significantly limited. Countries Faso, Burundi, Cambodia, Central African Domestic government revenues are based for which no data are available are excluded Republic, Chad, Comoros, Democratic on data from the 2017 African Economic from this analysis, as indicated in the notes Republic of Congo, Djibouti, Equatorial Guinea, Outlook, available at http://www.african accompanying charts. Eritrea, Ethiopia, the Gambia, Guinea, Guinea- economicoutlook.org/index.php/en/statistics. Bissau, Haiti, Kiribati, Lao PDR, Lesotho, Revenue totals are comprised of direct taxes Liberia, Madagascar, Malawi, Mali, Mauritania, on income and profits, domestic indirect tax Mozambique, Myanmar, Nepal, Niger, Rwanda, revenues, trade taxes, other taxes, non-tax São Tomé and Príncipe, Senegal, Sierra Leone, revenues and resource rents. They do not Solomon Islands, Somalia, South Sudan, include grant financing, in order to isolate the Sudan, Tanzania, Timor-Leste, Togo, Tuvalu, truly domestic component of total revenues. Uganda, Vanuatu, Republic of Yemen and GDP data are obtained from the April 2017 Zambia. Equatorial Guinea officially graduated edition of the IMF’s World Economic Outlook from the LDC category in June 2017. database, available at https://www.imf.org/ external/pubs/ft/weo/2017/01/weodata/ African fragile states (from the OECD’s index.aspx. ‘States of Fragility 2016: Understanding Violence’): Angola, Burkina Faso, Burundi, African government expenditures on health, Cameroon, Central African Republic, Chad, agriculture and education are sourced from Comoros, Congo, Côte d’Ivoire, Democratic the World Health Organization (WHO) Global Republic of Congo, Egypt, Eritrea, Ethiopia, Health Expenditure Database (http://apps. the Gambia, Guinea, Guinea-Bissau, Kenya, who.int/nha/database/Select/Indicators/ Lesotho, Liberia, Libya, Madagascar, Malawi, en), the Regional Strategic Analysis and Mali, Mauritania, Mozambique, Niger, Nigeria, Knowledge Support System (ReSAKSS) Rwanda, Sierra Leone, Somalia, South (http://www.resakss.org/node/11) and the Sudan, Sudan, Swaziland, Tanzania, Uganda, UNESCO Institute for Statistics education Zambia, and Zimbabwe. The OECD grouping database (http://uis.unesco.org/indicator/ of fragile states changes from year to year. edu-fin-total-edu_exp_r_gov_exp) respectively. In order to analyse resources over time to Governments were assessed against their this grouping, however, ONE has followed the Abuja commitment, in which they pledged OECD’s convention of using the most recent to allocate 15% of their national budgets to list of countries from the 2016 OECD fragility health. Since annual data are far from complete framework and retroactively applying that list across African countries, ONE examined to all previous years in its analysis. spending in the latest year with available data

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83 ANNEX

TABLE 1: ODA GLOBALLY, TO LDCS, TO AFRICA AND TO AFRICAN FRAGILE STATES (CURRENT PRICES, % CHANGES IN REAL TERMS)

ODA to ODA to Africa African fragile Global ODA ODA to LDCs ODA to Africa fragile states states % Global ODA ODA to LDCs ODA to Africa % difference % difference % difference ODA to LDCs/ ODA to LDCs/ ODA to Africa/ 2015 (USD difference (USD millions) (USD millions) (USD millions) 2015/16 2015/16 2015/16 Total ODA ODA/GNI GNI GNI millions) 2014/15

AUSTRALIA 3,017.27 860.35 431.19 -12.73% -6.83% 20.17% 28.51% 0.25% 0.07% 0.04% 294.90 -8.89%

AUSTRIA 1,575.11 233.42 304.90 17.78% 3.88% 2.39% 14.82% 0.41% 0.06% 0.08% 215.35 0.55%

BELGIUM 2,301.31 797. 2 2 915.51 19.36% 29.18% 21.85% 34.64% 0.49% 0.17% 0.20% 554.30 -15.67%

CANADA 3,961.87 1,384.09 1,607.43 -4.41% -8.51% -5.46% 34.94% 0.26% 0.09% 0.11% 1,258.57 31.54%

CZECH 261.14 56.32 75.12 29.28% 34.89% 42.80% 21.57% 0.14% 0.03% 0.04% 33.11 -11.54% REPUBLIC

DENMARK 2,369.69 623.55 774.75 -7.68% 2.25% 10.75% 26.31% 0.75% 0.20% 0.25% 545.13 -19.11%

FINLAND 1,056.87 300.70 334.99 -18.68% -30.56% -34.33% 28.45% 0.44% 0.13% 0.14% 362.93 -18.66%

FRANCE 9,410.97 2,339.42 4,156.26 5.25% 3.53% 6.47% 24.86% 0.38% 0.09% 0.17% 2,296.01 9.41%

GERMANY 24,626.99 No Data 5,401.44 36.15% No Data 19.31% No Data 0.70% No Data 0.15% 2,161.70 -11.99%

GREECE 264.00 45.24 71.62 10.83% 19.00% 17.33% 17.14% 0.14% 0.02% 0.04% 37.1 7 -9.36%

HUNGARY 155.40 46.43 56.03 0.54% 79.71% 41.33% 29.88% 0.13% 0.04% 0.05% 24.98 5.18%

ICELAND 50.18 20.16 20.02 11.55% 9.73% 4.97% 40.18% 0.25% 0.10% 0.10% 15.08 11.54%

IRELAND 802.22 335.46 375.24 11.87% -2.49% -3.05% 41.82% 0.33% 0.14% 0.16% 3 47. 76 -3.18%

ITALY 4,710.98 889.88 1,203.38 19.03% 1.34% 11.35% 18.89% 0.25% 0.05% 0.06% 731.20 -4.60%

JAPAN 10,352.59 4,062.18 3,126.87 1.04% -0.57% -7.1 3% 39.24% 0.20% 0.08% 0.06% 2,305.59 20.09%

84 ANNEX

ODA to ODA to Africa African fragile Global ODA ODA to LDCs ODA to Africa fragile states states % Global ODA ODA to LDCs ODA to Africa % difference % difference % difference ODA to LDCs/ ODA to LDCs/ ODA to Africa/ 2015 (USD difference (USD millions) (USD millions) (USD millions) 2015/16 2015/16 2015/16 Total ODA ODA/GNI GNI GNI millions) 2014/15

KOREA 1,964.96 755.13 605.44 3.35% 4.46% 19.63% 38.43% 0.14% 0.05% 0.04% 418.26 2.46%

LUXEMBOURG 383.72 152.45 159.32 7. 6 6 % 0.80% -3.48% 39.73% 1.00% 0.40% 0.42% 106.84 7.28%

NETHERLANDS 4,933.78 1,157.58 1,452.09 -13.35% 11.41% 6.16% 23.46% 0.65% 0.15% 0.19% 903.52 11.05%

NEW ZEALAND 438.09 118.09 43.27 -2.55% -16.03% 27.10% 26.96% 0.25% 0.07% 0.02% 25.20 8.34%

NORWAY 4,334.36 1,040.16 1,060.31 7. 76 % 0.35% 1.63% 24.00% 1.11% 0.27% 0.27% 937. 81 1.07%

POLAND 602.34 185.18 250.75 42.41% 54.29% 57.02% 30.74% 0.13% 0.04% 0.06% 120.33 11.48%

PORTUGAL 339.61 100.21 153.94 8.92% 9.69% -7. 0 7 % 29.51% 0.17% 0.05% 0.08% 50.42 -32.80%

SLOVAK REPUBLIC 107.02 21.94 33.75 26.73% 19.01% 25.40% 20.51% 0.12% 0.03% 0.04% 18.42 23.29%

SLOVENIA 79.65 13.56 19.81 25.25% 41.29% 37. 79 % 17.02% 0.18% 0.03% 0.05% 9.04 3.31%

SPAIN 1,934.25 486.51 715.09 51.20% 54.22% 84.25% 25.15% 0.16% 0.04% 0.06% 276.06 -28.21%

SWEDEN 4,870.43 1,360.46 1,450.89 -31.11% -7.39% -12.31% 27.93% 0.94% 0.26% 0.28% 1,357.17 11.71%

SWITZERLAND 3,562.90 831.29 890.20 4.24% -7.50% -9.21% 23.33% 0.54% 0.13% 0.13% 716.76 9.42%

UNITED KINGDOM 18,010.08 5,613.42 6,702.93 8.34% 2.37% 2.21% 31.17% 0.70% 0.22% 0.26% 5,731.67 -3.52%

UNITED STATES 33,579.20 11,774.95 12,497.37 7. 0 3% 8.27% 8.07% 35.07% 0.18% 0.06% 0.07% 8,944.30 -2.90%

TOTAL DAC 140,056.98 38,908.40 44,889.89 7.41 % 5.09% 5.90% 2 7. 78 % 0.31% 0.09% 0.10% 30,799.66 -0.24% COUNTRIES MEMO: 15,736.58 4,226.68 6,287.35 14.31% 21.17% 18.76% 26.86% N/A N/A N/A 3,262.91 -10.39% EU INSTITUTIONS

Table 1 Sources: OECD DAC Table 1, Table 2a, and Preliminary Release (April 2017). Notes: All figures are net flows, excluding debt relief, and in current prices. Percentage changes are in real terms. LDC debt relief is not provided in the DAC’s preliminary release. Following the practice of the DAC, ONE has assumed that 100% of bilateral debt relief in 2016 was for LDCs. The EU Institutions is a ‘memo’ line shown for information, but figures overlap with those for individual 85 EU Member States. Teal indicates that the DAC member met the target of 0.7% ODA/GNI or 0.15–0.20% of GNI towards LDCs; orange indicates that the DAC member reduced its ODA funding compared with the previous year. Germany did not provide any data on its ODA to LDCs in 2016 in time for the DAC preliminary release in April 2017. FIGURE 1: GOVERNMENT EXPENDITURE ON EDUCATION AS A % OF GOVERNMENT EXPENDITURE (MOST RECENT DATA)

30.0% 29.0% 27.0%

26.2% 24.9% 24.8%

GPE COMMITMENT (20%) 21.8% 21.7% 21.6%

21.0% 20.6% 19.1% 19.0% 19.0% 18.2% 18.0% 18.0% 1 7. 5% 17.3% 17.2% 16.9% 16.6% 16.5% 16.2% 15.3% 15.1% 15.0% 14.0% 13.8% 12.5% % OF GOVERNMENT EXPENDITURE % OF GOVERNMENT 12.3% 12.3% 12.0% 11.4% 11.4% 10.4% 10.3% 8.9% 8.7% 8.1% 7.8%

4.0%

MALI TOGO CHAD BENIN NIGER KENYA GABON GHANA GUINEA LIBERIA TUNISIA MALAWI ANGOLA NAMIBIA UGANDA RWANDA BURUNDI SENEGAL ETHIOPIA DJIBOUTI TANZANIA COMOROS ZIMBABWE MAURITIUS CAMEROON SWAZILAND THE GAMBIA MAURITANIA CABO VERDE CABO SEYCHELLES MOZAMBIQUE MADAGASCAR SOUTH SUDAN SIERRA LEONE BURKINA FASO BURKINA ÔTE D’LVOIRE C ÔTE SOUTH AFRICA CONGO, REP. OF REP. CONGO, GUINEA-BISSAU CONGO, DEM. REP. OF DEM. REP. CONGO, É AND PR Í NCIPE TOM O Ã S CENTRAL AFRICAN REPUBLIC CENTRAL AFRICAN

Figure 1 Source: UNESCO Institute of Statistics. Notes: The following countries were excluded due to a lack of data between 2010 and the present: Algeria, Botswana, Egypt, Eritrea, Equatorial Guinea, Lesotho, Libya, Morocco, Nigeria, 86 Somalia, Sudan and Zambia. ANNEX

FIGURE 2: GOVERNMENT EXPENDITURE ON HEALTH AS A % OF GOVERNMENT EXPENDITURE (2014)

16.8%

16.6% ABUJA COMMITMENT (15%)

15.7% 15.3% 14.1% 14.2% 14.2% 14.2% 13.1% 13.2% 12.8% 12.4% 12.3% 11.9% 11.7% 11.6% 11.3% 11.1% 11.2% 11.0%

10.8% 10.2% 9.9% 9.9% 10.0% 9.7% 9.6% 9.3% 9.0% 9.0% 8.8% 8.8% 8.7% 8.7% 8.5% 8.2% % OF GOVERNMENT EXPENDITURE % OF GOVERNMENT 8.0% 7.8% 7.8% 7. 4% 7. 3% 7. 0 % 7. 0 % 6.8% 6.0% 6.0%

5.6% 5.6% 5.0% 4.9% 4.3% 3.6% 4.0%

MALI LIBYA TOGO CHAD BENIN NIGER EGYPT KENYA SUDAN GABON GHANA ZAMBIA GUINEA LIBERIA TUNISIA MALAWI NIGERIA ANGOLA NAMIBIA UGANDA ALGERIA ERITREA RWANDA BURUNDI SENEGAL ETHIOPIA LESOTHO DJIBOUTI TANZANIA COMOROS MOROCCO ZIMBABWE MAURITIUS BOTSWANA CAMEROON SWAZILAND THE GAMBIA MAURITANIA CABO VERDE CABO SEYCHELLES MOZAMBIQUE MADAGASCAR SOUTH SUDAN SIERRA LEONE BURKINA FASO BURKINA ÔTE D’LVOIRE C ÔTE SOUTH AFRICA CONGO, REP. OF REP. CONGO, GUINEA-BISSAU EQUATORIAL GUINEA EQUATORIAL CONGO, DEM. REP. OF DEM. REP. CONGO, É AND PR Í NCIPE TOM O Ã S CENTRAL AFRICAN REPUBLIC CENTRAL AFRICAN

Figure 2 Source: WHO Global Health Expenditure Database. Note: Somalia was excluded due to a lack of data. 87 FIGURE 3: GOVERNMENT EXPENDITURE ON AGRICULTURE AS A % OF GOVERNMENT EXPENDITURE (MOST RECENT DATA)

19%

12%

MAPUTO/MALABO COMMITMENT (10%) 10% 9% 9% 9% 9% 8% 8% 8% 8% % OF GOVERNMENT EXPENDITURE % OF GOVERNMENT 6% 5% 5% 5% 4% 4% 4% 4% 4% 4% 4% 4% 3% 3% 3% 3% 3% 3% 2% 2% 2% 2% 1% 1% 1% 1% 1% 1% 1%

MALI TOGO BENIN NIGER EGYPT KENYA SUDAN GHANA ZAMBIA GUINEA LIBERIA TUNISIA MALAWI NIGERIA ANGOLA NAMIBIA UGANDA RWANDA BURUNDI SENEGAL ETHIOPIA LESOTHO DJIBOUTI TANZANIA ZIMBABWE MAURITIUS BOTSWANA SWAZILAND THE GAMBIA SEYCHELLES MOZAMBIQUE MADAGASCAR SIERRA LEONE BURKINA FASO BURKINA ÔTE D’LVOIRE C ÔTE SOUTH AFRICA CONGO, REP. OF REP. CONGO, CONGO, DEM. REP. OF DEM. REP. CONGO, CENTRAL AFRICAN REPUBLIC CENTRAL AFRICAN

Figure 3 Source: ReSAKSS. Notes: The following countries were excluded due to a lack of data between 2010 and the present: Algeria, Cabo Verde, Cameroon, Chad, Comoros, Eritrea, Equatorial Guinea, Gabon, Guinea-Bissau, Libya, 88 Mauritania, Morocco, São Tomé and Príncipe and Somalia. ANNEX

FIGURE 4: GOVERNMENT SPENDING PER CAPITA IN AFRICA (2016)

5,820

4,563

3,681

2,515 2,366 1,822 1,734 1,648 1,602 1,211 1,230 1,066 954 926 923 831 796 583 521 418 398 349 348 342 306 265 264 232 225 212 205 191 189 185 173 164 159 146 140 139 121 120 117 115 112 110 109 97 69 64 54 45 296 MALI LIBYA TOGO CHAD BENIN NIGER EGYPT KENYA SUDAN GABON GHANA ZAMBIA GUINEA LIBERIA TUNISIA MALAWI NIGERIA ANGOLA NAMIBIA UGANDA ERITREA ALGERIA RWANDA BURUNDI SENEGAL ETHIOPIA LESOTHO DJIBOUTI TANZANIA COMOROS MOROCCO ZIMBABWE MAURITIUS BOTSWANA CAMEROON SWAZILAND THE GAMBIA MAURITANIA CABO VERDE CABO SEYCHELLES MOZAMBIQUE MADAGASCAR SOUTH SUDAN SIERRA LEONE BURKINA FASO BURKINA ÔTE D’LVOIRE C ÔTE SOUTH AFRICA CONGO, REP. OF REP. CONGO, GUINEA-BISSAU EQUATORIAL GUINEA EQUATORIAL CONGO, DEM. REP. OF DEM. REP. CONGO, É AND PR Í NCIPE TOM O Ã S CENTRAL AFRICAN REPUBLIC CENTRAL AFRICAN

Figure 4 Source: IMF World Economic Outlook Database (April 2017). Notes: ONE multiplied general government total expenditure as a percentage of GDP by GDP per capita (current prices) to calculate the government spending per capita. Somalia was excluded due to a lack of data. 89 ENDNOTES

1. UNICEF (2016). ‘Child Mortality Estimates’. https://data.unicef. download/5jm3xh459n37-en.pdf?expires=1498658344& Following the practice of the DAC, ONE has assumed that 100% of org/topic/child-survival/under-five-mortality/ (Last accessed id=id&accname=guest&checksum=63D2724F54BEB bilateral debt relief in 2015 was for LDCs. ONE does not count an 10 July 2017) 98438AB6CA250654B60 estimated portion of regional and global unallocated ODA to LDCs. 2. World Bank Group. ‘Poverty & Equity Data’. http://povertydata. 11. World Bank Group (2017). ‘Forward Look: A Vision for the 23. This includes primary, lower and upper secondary school; worldbank.org/poverty/home/ World Bank Group in 2030—Progress and Challenges’, pp.18- UNESCO (2016). ‘Leaving no one behind: How far on the way to 23. http://siteresources.worldbank.org/DEVCOMMINT/ universal primary and secondary education?’ Policy Paper 27. 3. World Bank Group (2016). ‘Poverty and Shared Documentation/23745169/DC2017-0002.pdf http://unesdoc. unesco.org/images/0024/002452/245238E.pdf Prosperity 2016: Taking on Inequality. Key Findings’. https://openknowledge.worldbank.org/bitstream/ 12. UN General Assembly, Addis Ababa Action Agenda, Third 24. This includes low- and middle-income countries. International handle/10986/25078/210958KeyFindings.pdf International Conference on Financing for Development, Commission on Financing Global Education Opportunity (2016). 17 August 2015. http://www.un.org/esa/ffd/wp-content/ ‘The Learning Generation: Investing in Education for a Changing 4. ONE (2017). The African Century. https://s3.amazonaws.com/ uploads/2015/08/AAAA_Outcome.pdf World’. http://report.educationcommission.org/report/ one.org/pdfs/ENG-Brief-TheAfricanCentury.pdf 13. Belgium and Ireland. https://europa.eu/eyd2015/en/concord/posts/ 25. International Commission on Financing Global Education 5. Domestic revenue and FDI data were available in current prices. eu-leaders-could-drop-aid-commitment-poor-countries-first-time Opportunity. ‘Overview of Education Financing Mechanisms’. Domestic revenue totals are comprised of direct taxes on income http://www.educationcannotwait.org/wp-content/ and profits, domestic indirect tax revenues, trade taxes, other taxes, 14. OECD (2016). ‘ States of Fragility 2016: Understanding Violence’. uploads/2016/05/Education_Financing-Mechanisms.pdf non-tax revenues and resource rents using data from the 2017 http://www.oecd.org/dac/conflict-fragilityresilience/states- African Economic Outlook. They do not include grants. Revenue of-fragility-report-series.htm 26. Global Partnership for Education (GPE). ‘GPE Replenishment data were not available for South Sudan or Somalia. ODA is total net, 2020: Case for Investment’. http://www.globalpartnership.org/ including both bilateral and imputed multilateral flows from DAC 15. World Bank, PovcalNet, http://iresearch.worldbank.org/ funding/replenishment/case-for-investment-2020 donors, excluding debt relief. As the volumes are in current prices, PovcalNet/povOnDemand.aspx, accessed May 2017. Although they are not comparable with analysis elsewhere in this report. ODA Equatorial Guinea officially graduated from the LDC category 2 7. Education Cannot Wait (ECW). ‘Case for Investment’. http://www. is not fully additional to government expenditures, since it includes in June 2017, it is included in these (and all other) figures in the educationcannotwait.org/wp-content/uploads/2016/05/ECW- a portion of the latter in most countries (on-budget aid); however, report. Investment-Case.pdf due to insufficient availability of data, it is not possible to calculate 16. World Bank, PovcalNet, http://iresearch.worldbank.org/ 28. Education Cannot Wait (ECW). ‘Where is the Fund Working?’ precisely the volumes of government expenditures that are financed PovcalNet/povOnDemand.aspx, accessed May 2017. http://www.educationcannotwait.org/wp-content/ by ODA. FDI is calculated as net inflows by the balance of payments uploads/2017/04/Where_ECW_one_pager-1.pdf method and thus includes negative values for disinvestments. FDI 17. OECD (2016). ‘States of Fragility 2016: Understanding Violence’. data for South Sudan were only available for 2012–16. http://www.oecd.org/dac/conflict-fragilityresilience/states- 29. Education Commission Proposal for an International Financing of-fragility-report-series.htm Facility for Education: http://educationcommission.org/ 6. Total DAC ODA to Africa includes bilateral and imputed multilateral international-finance-facility-education aid from 2015, which was $42.7 billion (http://stats.oecd.org/#). 18. World Bank (2017). ‘The Africa Competitiveness Report Estimates for domestic resource mobilisation (DRM) are based on 2017’. http://documents.worldbank.org/curated/ 30. UN General Assembly, Addis Ababa Action Agenda, Third ONE’s calculations using fiscal data from the African Economic en/733321493793700840/pdf/114750-2-5-2017-15-48-23- International Conference on Financing for Development, Outlook, excluding grants. http://www.africaneconomicoutlook. ACRfinal.pdf 17 August 2015. http://www.un.org/esa/ffd/wp-content/ org/index.php/en/statistics uploads/2015/08/AAAA_Outcome.pdf 19. World Bank (2017). ‘World Bank Group Announces Record $57 7. African Development Bank (AfDB) (2017). ‘African Economic Billion for Sub-Saharan Africa’. Press release, 19 March. http:// 31. Total DAC ODA to Africa includes bilateral and imputed Outlook’. http://dx.doi.org/10.1787/888933475060 www.worldbank.org/en/news/press-release/2017/03/19/world- multilateral aid from 2015, which was $42.7 billion (http://stats. bank-group-announces-record-57-billion-for-sub-saharan- oecd.org/#). DRM estimates are based on ONE’s calculations 8. ONE calculations based on data from the African Economic africa using fiscal data from the African Economic Outlook, excluding Outlook 2017, AEO Fiscal Data. ONE has excluded grants when grants. http://www.africaneconomicoutlook.org/index.php/ calculating revenue totals. http://www.africaneconomicoutlook. 20. World Bank (2017). ‘After Ebola, Liberia’s Health System on en/statistics org/index.php/en/statistics Path to Recovery’. http://www.worldbank.org/en/news/ feature/2017/06/07/after-ebola-liberias-health-system-on-path- 32. OECD (2016). ‘Revenue Statistics 2016: Tax revenue trends in 9. UNCTAD (2017). ‘World Investment Report 2017: Investment to-recovery the OECD’. https://www.oecd.org/tax/tax-policy/revenue- and the Digital Economy’. http://unctad.org/en/pages/ statistics-2016-highlights.pdf PublicationWebflyer.aspx?publicationid=1782 21. USAID (2017). ‘Better Access to Medicine, Bed Nets Reduces Malaria Cases in Rural Guinea’. https://www.usaid.gov/results- 33. Global Financial Integrity (2015). ‘Illicit Financial Flows from 10. OECD (2016). ‘Amounts Mobilised from the Private Sector by data/success-stories/efficient-health-workers-free-medicines- Developing Countries 2004–2013’. http://www.gfintegrity.org/ Official Development Finance Interventions: Guarantees, and-bed-nets-reduce-malaria wp-content/uploads/2015/12/IFF-Update_2015-Final-1.pdf syndicated loans and shares in collective investment vehicles’. http://www.oecd-ilibrary.org/docserver/ 22. LDC debt relief is not provided in the DAC’s preliminary release. 34. OECD DAC Preliminary Release (April 2017)

90 ENDNOTES

35. ONE calculations based on data from the African Economic From this paper, ONE utilised the fixed effects model for Nigeria to 61. R. Culpeper and A. Bhushan (2010). ‘Why enhance domestic Outlook 2017, AEO Fiscal Data. ONE has excluded grants when estimate that an increase in health expenditure of 1.43% of GDP resource mobilisation in Africa?’ International Centre for Trade and calculating revenue totals. http://www.africaneconomicoutlook. would translate into a one-year increase in life expectancy. In 2015, Sustainable Development. http://www.ictsd.org/bridges-news/ org/index.php/en/statistics 1.43% of GDP was $6.9 billion. Then, by using the relationship of trade-negotiations-insights/news/why-enhance-domestic- an increase in one year of life expectancy translating into a 4% resource-mobilisation-in-africa 36. R. Culpeper and A. Bhushan (2010). ‘Why enhance domestic increase in output, established by Bloom et al. (2004), giving $19.2 resource mobilisation in Africa?’ International Centre for Trade and billion for 2015, ONE estimated the return to the economy as being 62. Addis Tax Initiative (2017). https://www.addistaxinitiative. Sustainable Development. http://www.ictsd.org/bridges-news/ 279% ($19.2 billion/$6.9 billion). net/#slider-4 trade-negotiations-insights/news/why-enhance-domestic- resource-mobilisation-in-africa 49. Follow the Money. http://followthemoneyng.org/category/ 63. Addis Tax Initiative (2015). ‘ATI Monitoring Report 2015’. https:// health/ www.addistaxinitiative.net/documents/Addis-Tax-Initiative_ 37. UNPFA (2007). ‘State of World Population 2007: Unleashing Monitoring-Report_2015_EN.pdf the Potential of Urban Growth’. https://www.unfpa.org/sites/ 50. Malawi (16.8%); Swaziland (16.6%); Ethiopia (15.7%); and the default/files/pub-pdf/695_filename_sowp2007_eng.pdf Gambia (15.3%). 64. D. Pegg, H. Bengtsson and H. Watt (2016). ‘Revealed: the tycoons and world leaders who built secret UK property empires’. The 38. O.-.H Fjeldstad, M. Ali and T. Goodfellow (2017). ‘Taxing the urban 51. Zimbabwe (30%); Congo (29%); Ethiopia (27%); Namibia (26.2%); Guardian. http://www.theguardian.com/news/2016/apr/05/ boom: property taxation in Africa’. CMI Insight. https://www.cmi. Swaziland (24.9%); Senegal (24.8%); Côte d’Ivoire (21.8%); Niger panama-papers-world-leaders-tycoons-secret-property- no/publications/file/6190-taxing-the-urban-boom-property- (21.7%); Malawi (21.6%); Ghana (21%); and Tunisia (20.6%). empires taxation-in-africa.pdf 52. Malawi (19%); Mozambique (12%); and Zimbabwe (10%) 65. ONE internal calculation using the unit vaccine rate of $10 per 39. Global Financial Integrity (2015). ‘Illicit Financial Flows from net for an insecticide-treated bed net to protect against malaria, Developing Countries: 2004–2013’. http://www.gfintegrity.org/ 53. For education spending data, this excludes Algeria, Botswana, lasting for around three years. UN Foundation (2014). ‘Preventing wp-content/uploads/2015/12/IFF-Update_2015-Final-1.pdf Egypt, Eritrea, Equatorial Guinea, Lesotho, Libya, Morocco, Malaria Deaths’. http://www.unfoundation.org/what-we-do/ Nigeria, Somalia, Sudan and Zambia. For health spending issues/global-health/preventing-malaria-deaths.html 40. ITC and OECD (2015). ‘Examples of Successful DRM Reforms data, this excludes Somalia. For agriculture spending data, this and the Role of International Co-operation’. https://www. excludes Algeria, Cabo Verde, Cameroon, Chad, Comoros, Eritrea, 66. ‘U.S. Statement of Commitments: UK Summit’, 12 May 2016. addistaxinitiative.net/documents/ITC-OECD_Successful_ Equatorial Guinea, Gabon, Guinea-Bissau, Libya, Mauritania, https://www.gov.uk/government/uploads/system/uploads/ DRM_reforms.pdf Morocco, São Tomé and Príncipe and Somalia.. attachment_data/file/522738/United_States_of_America.pdf 41. ONE calculations based on data from the African Economic 54. WHO (2017). Global Health Expenditure Database. http://apps. 67. United Nations (2017). ‘World Population Prospects. The 2017 Outlook 2017, AEO Fiscal Data. Grants have been excluded who.int/nha/database/Select/Indicators/en; UNESCO (2017). Revision: Key findings and advance tables’. https://esa.un.org/ when calculating revenue totals. Rwanda’s revenue to GDP UIS Database. http://uis.unesco.org/indicator/edu-fin-total- unpd/wpp/Publications/Files/WPP2017_KeyFindings.pdf ratio increased from 11.3% in 2000 to 17.1% in 2014. http://www. edu_exp_r_gov_exp; RESAKSS (2017). All data. http://www. africaneconomicoutlook.org/index.php/en/statistics resakss.org/node/11 68. African Development Bank Group (2017). ‘Infrastructure Finance’. https://www.afdb.org/en/topics-and-sectors/sectors/private- 42. World Bank. World Development Indicators. Rwanda, Health 55. WHO (2017). Global Health Expenditure Database. http://apps. sector/areas-of-focus/infrastructure-finance/ expenditure, total (% of GDP). http://databank.worldbank.org/ who.int/nha/database/Select/Indicators/en; UNESCO (2017). data/reports.aspx?source=world-development-indicators UIS Database. http://uis.unesco.org/indicator/edu-fin-total- 69. UNCTAD (2017), World Investment Report, Annex table 01, http:// edu_exp_r_gov_exp unctad.org/en/Pages/DIAE/World%20Investment%20Report/ 43. World Bank. World Development Indicators. Rwanda, External Annex-Tables.aspx resources for health (% of total expenditure on health). http:// 56. ONE’s calculations based on general government expenditure databank.worldbank.org/data/reports.aspx?source=world- (as a % of GDP) data from the IMF World Economic Outlook (April 70. UNCTAD (2017), World Investment Report, Annex table 01, http:// development-indicators 2017). ONE multiplied general government total expenditure as a unctad.org/en/Pages/DIAE/World%20Investment%20Report/ percentage of GDP to GDP per capita (current prices) to calculate Annex-Tables.aspx 44. WHO Global Health Expenditure Database. http://apps.who.int/ government spending per capita. https://www.imf.org/external/ nha/database/Select/Indicators/en 71. AfDB (2017). African Economic Outlook. http://www. pubs/ft/weo/2017/01/weodata/index.aspx africaneconomicoutlook.org/en/home , p.48. 45. J.C. Anyanwu and A.E.O. Erhijakpor (2007). ‘Health Expenditures 57. UNESCO UIS Database. ‘Equatorial Guinea: Number of out-of- and Health Outcomes in Africa’. African Development Bank. 72. UNCTAD (2017). World Investment Report, Africa Press school children of primary school age’. http://data.uis.unesco. Release. http://unctad.org/en/pages/PressRelease. https://www.afdb.org/fileadmin/uploads/afdb/Documents/ org/# Publications/26820442-EN-ERWP-91.PDF aspx?OriginalVersionID=408 58. World Bank. ‘International Debt Statistics’. http://databank. 46. D.E. Bloom, D. Canning and J. Sevilla (2004). ‘The Effect of Health 73. UNCTAD (2017). ‘World Investment Report 2017: Investment worldbank.org/data/reports.aspx?source=International%20 and the Digital Economy’. http://unctad.org/en/ on Economic Growth: A production function approach’. World Debt%20Statistics Development 32 (2004): 1–13. Doi: 10.1016/j.worlddev.2003.07.002 PublicationChapters/wir2017ch1_en.pdf p.3. 59. World Bank. ‘International Debt Statistics. Ghana external debt 47. D.E. Bloom, D. Canning and J Sevilla (2004). ‘The Effect of Health 74. The OECD list of fragile states changes regularly. But, consistent stock (% of GNI) from 2007 to 2015’. http://databank.worldbank. with the OECD approach in their annual ‘State of Fragility’ series on Economic Growth: A production function approach’. World org/data/reports.aspx?source=International%20Debt%20 Development 32 (2004): 1–13. Doi: 10.1016/j.worlddev.2003.07.002 (http://www.oecd.org/dac/conflict-fragility-resilience/states- Statistics of-fragility-report-series.htm), ONE uses the most recent list of 48. J. Novignon, S.A. Olakojo and J. Nonvignon (2012). ‘The effects 60. P. Adams (2015). ‘Africa Debt Rising’, Africa Research Institute. fragile states (2016) throughout this report, including for the analysis of public and private health care expenditure on health status http://www.africaresearchinstitute.org/newsite/wp-content/ of historical data. The source for FDI data is UNCTAD (2017), World in sub-Saharan Africa: new evidence from panel data analysis’. uploads/2015/01/ARI-Counterpoint-SovereignBond-download.pdf Investment Report, Annex table 01, http://unctad.org/en/Pages/ Health Economics Review, 2012, 2:22. doi:10.1186/2191-1991-2-22. DIAE/World%20Investment%20Report/Annex-Tables.aspx

91 75. OPEC, Monthly Oil Market Report: June 2017, http://www. 89. Ibid., p.24. devco/files/leaflet-eu-blending-10.2841-748965-20150710_ opec.org/opec_web/static_files_project/media/downloads/ en.pdf publications/MOMR%20June%202017.pdf pp.51-52. 90. World Bank (2017). ‘Doing Business 2017: Equal Opportunity for All’, p.4. www.doingbusiness.org/~/media/WBG/DoingBusiness/ 102. European Commission (2017). ‘EU External Investment Plan 76. ONE (2017), The African Century, https://s3.amazonaws.com/ Documents/Annual-Reports/English/DB17-Report.pdf – Factsheet’. https://ec.europa.eu/europeaid/eu-external- one.org/pdfs/ENG-Brief-TheAfricanCentury.pdf investment-plan-factsheet_en 91. World Bank (2017). ‘Doing Business 2017: Equal Opportunity 7 7. ONE (2017), The African Century, https://s3.amazonaws.com/ for All’, p.37. http://www.doingbusiness.org/~/media/WBG/ 103. The German G20 Presidency, G20 Compact with Africa, one.org/pdfs/ENG-Brief-TheAfricanCentury.pdf DoingBusiness/Documents/Annual-Reports/English/DB17- http://www.bundesfinanzministerium.de/Content/EN/ Report.pdf Standardartikel/Topics/Featured/G20/2017-03-30-g20- 78. World Bank. ‘Doing Business: Measuring Business Regulations compact-with-africa.html Economy Rankings’. http://www.doingbusiness.org/~/media/ 92. World Bank Group (2017). ‘The G-20 Compact with Africa: WBG/DoingBusiness/Documents/Annual-Reports/English/ A Joint AfDB, IMF and WBG Report’, p.23. http://www. 104. World Bank (2017). IDA18 IFC-MIGA Private Sector Window. DB17-Report.pdf bundesfinanzministerium.de/Content/DE/Standardartikel/ https://ida.worldbank.org/financing/ida18-ifc-miga-private- Themen/Schlaglichter/G20-2016/g20-the-g20-compact-with- sector-window 79. See: World Bank (2001). ‘Trends in Private Investment in africa.pdf?__blob=publicationFile&v=3 Developing Countries: Statistics for 1970–2000 and the Impact 105. MIGA is a member of the World Bank Group and promotes FDI into on Private Investment of Corruption and the Quality of Public 93. IMF (2016). ‘Macroeconomic Developments and Prospects in Low developing countries. Investment’. IFC Discussion Paper No 44, p.12. http://documents. Income Developing Countries—2016’. IMF Policy Paper, pp.32-40. worldbank.org/curated/en/903181468739487735/58555932 http://www.imf.org/external/np/pp/eng/2016/112316.pdf 106. The main bilateral DFIs include: OeEB (Austria), BIO (Belgium), 4_200409289103324/additional/multi0page.pdf; World Bank BMI-SBI (Belgium), IFU (Denmark), Finnfund (Finland), AFD/ (2017). ‘Doing Business 2017: Equal Opportunity for All’, pp.84-86. 94. E15 Initiative (2015). ‘Industrial Policy as a Tool of Development Proparco (France), KfW/DEG (Germany), CDP/SIMEST (Italy), www.doingbusiness.org/~/media/WBG/DoingBusiness/ Strategy: Using FDI to Upgrade and Diversify the Production and FMO (Netherlands), Norfund (Norway), SOFID (Portugal), Documents/Annual-Reports/English/DB17-Report.pdf Export Base of Host Economies in the Developing World’, p.1. COFIDES (Spain), Swedfund (Sweden), SIFEM (Switzerland), CDC http://e15initiative.org/publications/industrial-policy-as- Group (United Kingdom) and OPIC (United States). The main 80. UNCTAD (2017), World Investment Report, Annex table 01, http:// a-tool-of-development-strategy-using-fdi-to-upgrade-and- multilateral DFIs include: African Development Bank (AfDB), Asian unctad.org/en/Pages/DIAE/World%20Investment%20Report/ diversify-the-production-and-export-base-of-host-economies- Development Bank (ADB), European Bank for Reconstruction Annex-Tables.aspx and UNCTAD (2017), World Investment in-the-developing-world/ and Development (EBRD), European Investment Bank (EIB), Report, Africa’s Press Release, http://unctad.org/en/pages/ Inter-American Development Bank (IDB), International Finance PressRelease.aspx?OriginalVersionID=408 95. International Centre for Trade and Sustainable Development Corporation (IFC) and Islamic Development Bank (ISDB). (ICTSD) (2017). ‘The Development Potential of Cross-Border 81. UNCTAD (2017). World Investment Report, Africa Press Infrastructure in Africa: A Job Creation Perspective’. http:// 107. Development Initiatives (2016). ‘The role of blended finance in Release. http://unctad.org/en/pages/PressRelease. www.ictsd.org/bridges-news/bridges-africa/news/the- the 2030 Agenda: Setting out an analytical approach’. http:// aspx?OriginalVersionID=408 development-potential-of-cross-border-infrastructure- devinit.org/wp-content/uploads/2016/07/The-role-of-blended- in-africa finance-in-the-2030-Agenda-Discussion-paper-July-2016.pdf 82. Financial Times (2015). ‘Ethiopia predicts record $1.5bn overseas direct investment in 2015’. https://www.ft.com/ 96. International Centre for Trade and Sustainable Development 108. UK Parliament (2017). ‘Commonwealth Development Corporation content/0faa1dac-ea88-11e4-a701-00144feab7de?mhq5j=e3 (ICTSD) (2017). ‘The Development Potential of Cross-Border Bill: Commons stages’. https://www.parliament.uk/business/ Infrastructure in Africa: A Job Creation Perspective’. http:// news/2016/november/commons-commonwealth-development- 83. AfDB, African Economic Outlook (2017). ‘Ethiopia’. http://www. www.ictsd.org/bridges-news/bridges-africa/news/the- corporation-bill/ africaneconomicoutlook.org/en/country-notes/ethiopia development-potential-of-cross-border-infrastructure- in-africa 109. P. Carter (2015). ‘Why subsidise the private sector? What donors 84. AfDB, African Economic Outlook (2017). ‘Ethiopia‘. http://www. are trying to achieve, and what success looks like’. Overseas africaneconomicoutlook.org/en/country-notes/ethiopia 97. Mercy Corps (2016). ‘Guidance of Safe and Decent Work for Development Institute (ODI). https://www.odi.org/sites/odi.org. 85. UNECA (2015). ‘Corruption in Public Procurement: the case Adolescents and Youth’. Internal document. uk/files/odi-assets/publications-opinion-files/9948.pdf , p.iv. of infrastructure in Africa’. http://www.uneca.org/stories/ 98. A loan facility extended to a national exporter by a bank in 110. OECD (2016). ‘Amounts Mobilised from the Private Sector by corruption-public-procurement-case-infrastructure-africa order to finance an export operation. Official Development Finance Interventions: Guarantees, syndicated loans and shares in collective investment 86. Transparency International (2016). ‘Integrity Pacts: A How To 99. ITUC-TUDCN and Eurodad (2015). ‘Business Accountability Guide from Practitioners’. https://www.transparency.org/ vehicles’. http://www.oecd-ilibrary.org/docserver/ For Development’. http://www.ituc-csi.org/business- download/5jm3xh459n37-en.pdf?expires=149865 whatwedo/publication/integrity_pacts_a_how_to_guide_ accountability-for-development from_practitioners 8344&id=id&accname=guest&checksum=63D27 100. OECD (2016). ‘Amounts Mobilised from the Private 24F54BEB98438AB6CA250654B60, p.1 87. Transparency International (2016). ‘Integrity Pacts: A How to Guide Sector by Official Development Finance Interventions: from Practitioners’. https://www.transparency.org/whatwedo/ 111. J. Pereira, for Oxfam and Eurodad (2017). ‘Blended Finance: What Guarantees, syndicated loans and shares in collective it is, how it works and how it is used’. http://eurodad.org/files/ publication/integrity_pacts_a_how_to_guide_ investment vehicles’. http://www.oecd-ilibrary.org/ from_practitioners pdf/58a1e294657ab.pdf; Development Inititatives (2016). ‘The role docserverdownload/5jm3xh459n37-en.pdf?expires of blended finance in the 2030 Agenda: Setting out an analytical 88. Transparency International (2017). ‘Co-creation of Prozorro: An =1498658344&id=id&accname=guest&checksum=6 approach’. http://devinit.org/wp-content/uploads/2016/07/ Account of The Process and Actors’. www.transparency.org/ 3D2724F54BEB98438AB6CA250654B60 The-role-of-blended-finance-in-the-2030-Agenda-Discussion- whatwedo/publication/co_creation_of_prozorro_an_account_ 101. European Commission (2015). ‘EU Blending: European Union aid paper-July-2016.pdf; M. Vervynckt, Eurodad (2015). ‘Financing of_the_process_and_actors to catalyse investments’. https://ec.europa.eu/europeaid/sites/ for development or for private interests?’ http://eurodad.org/ Entries/view/1546407/2015/05/13/Financing-for-development-

92 ENDNOTES

or-for-private-interests; Oxfam (2017). ‘Private-Finance Blending 120. Oxfam (2017). ‘Private-Finance Blending for Development: Risks Documents/performance-of-australian-aid-2015-16.pdf for Development: Risks and opportunities’. https://www.oxfam. and opportunities’. https://www.oxfam.org/sites/www.oxfam. org/sites/www.oxfam.org/files/bp-private-finance-blending- org/files/bp-private-finance-blending-for-development- 132. Commonwealth of Australia, DFAT (2017). ‘Performance of for-development-130217-en.pdf; Oxfam, ActionAid, Bond, Cafod, 130217-en.pdf, p.4; ‘Eurodad (2017). CSO expectations for the new Australian Aid 2015–16’. http://dfat.gov.au/about-us/publications/ Eurodad, WWF (2015). ‘Delivering sustainable development: A PSI rules.’ http://eurodad.org/files/pdf/593953a8c4527.pdf; Documents/performance-of-australian-aid-2015-16.pdf principled approach to public-private finance’. https://www.oxfam. Oxfam, ActionAid, Bond, Cafod, Eurodad, WWF (2015). ‘Delivering 133. World Bank, Public Private Infrastructure Facility. org/sites/www.oxfam.org/files/file_attachments/dp-delivering- sustainable development: A principled approach to public-private https://ppiaf.org/about-us sustainable-development-public-private-100415-en.pdf finance’. https://www.oxfam.org/sites/www.oxfam.org/files/ file_attachments/dp-delivering-sustainable-development- 134. Commonwealth of Australia, DFAT, Australian Aid Budget 112. See: J. Pereira, for Oxfam and Eurodad (2017). ‘Blended Finance: public-private-100415-en.pdf Summary 2016–17. Published by the Department of Foreign Affairs What it is, how it works and how it is used’. http://eurodad.org/ and Trade, Canberra, May 2016. http://dfat.gov.au/about-us/ files/pdf/58a1e294657ab.pdf; Oxfam (2017). ‘Private-Finance 121. J. 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Government of Canada, Budget 2017. ‘Part 4: Upholding Canada’s oxfam.org/sites/www.oxfam.org/files/file_attachments/dp- Place in the World. A Comprehensive Approach to International delivering-sustainable-development-public-private-100415-en. 122. ITUC-TUDCN and Eurodad (2015). ‘Business Accountability For Assistance’. http://www.budget.gc.ca/2017/docs/plan/chap- pdf; UK Aid Network (2015). ‘Leveraging Aid: A literature review on the Development’, p.28. http://www.ituc-csi.org/IMG/pdf/business_ 03-en.html#Toc477707462 additionality of using ODA to leverage private investments’. http:// accountability_development_en.pdf www.ukan.org.uk/wordpress/wp-content/uploads/2015/03/ 123. Eurodad (2013). ‘A dangerous blend? The EU’s agenda to “blend” 137. Justin Trudeau, Prime Minister of Canada. ‘Minister of International UKAN-Leveraging-Aid-Literature-Review-03.15.pdf; Eurodad public development finance with private finance’. http://www. 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Julie Bishop (Liberal Party of Australia), ‘The Coalition’s Policy for priorites/policy-politique.aspx?lang=eng institution loans to support EU external policies’. http://www.eca. a Safe and Prosperous Australia’, 23 June 2016. https://www. europa.eu/Lists/ECADocuments/SR14_16/SR14_16_EN.pdf liberal.org.au/latest-news/2016/06/23/coalitions-policy-safe- 139. Government of Canada (2017). ‘Canada’s Feminist International and-prosperous-australia Assistance Policy’. http://international.gc.ca/world-monde/ 114. European Commission (2016). ‘Evaluation of Blending, Final issues_development-enjeux_developpement/priorities- Report, Volume I’. https://ec.europa.eu/europeaid/sites/devco/ 126. Commonwealth of Australia, DFAT (2015). ‘Aid Investment Plan priorites/policy-politique.aspx?lang=eng files/evaluation-blending-volume1_en.pdf Sub-Saharan Africa: 2015–2019’. http://dfat.gov.au/about-us/ publications/Pages/aid-investment-plan-aip-sub-saharan- 140. Government of Canada (2017). ‘Canada’s Feminist International 115. ‘Group of 77 and China preliminary position for the intergovernmental africa-2015-16-to-2018-19.aspx Assistance Policy’. http://international.gc.ca/world-monde/ negotiations on the Outcome of the Third International Conference issues_development-enjeux_developpement/priorities- on Financing for Development to be held in Addis Ababa, Ethiopia, 127. Commonwealth of Australia, Department of Foreign Affairs and priorites/policy-politique.aspx?lang=eng 13–16 July 2015’. http://www.un.org/esa/ffd/wp-content/ Trade (DFAT) (2017). ‘Performance of Australian Aid 2015–16’. uploads/2015/01/ep-comments-g77-Feb2015.pdf http://dfat.gov.au/about-us/publications/Documents/ 141. Maclean’s (2017). ‘Canada to increase defence spending by $14 performance-of-australian-aid-2015-16.pdf billion over 10 years’. http://www.macleans.ca/politics/canada- 116. European Commission (2016). ‘Evaluation of Blending, Final to-increase-defence-spending-by-14-billion-over-10-years/ Report, Volume I’. https://ec.europa.eu/europeaid/sites/devco/ 128. Commonwealth of Australia, DFAT (2015). ‘Strategy for Australia’s files/evaluation-blending-volume1_en.pdf aid investments in private sector development’, p.2. http:// 142. Government of Canada (2017). ‘Canada’s new institute to grow private dfat.gov.au/about-us/publications/Documents/strategy-for- investment in developing countries to be based in Montréal’. https:// 117. Reforms in 2014 enhanced attention to poverty in the project australias-investments-in-private-sector-development.pdf, www.canada.ca/en/global-affairs/news/2017/05/canada_s_ design process, but the impact of these reforms has not yet been Commonwealth of Australia, DFAT, Creating shared value through new_institutetogrowprivateinvestmentindevelopingcountri.html assessed. partnership: Ministerial statement on engaging the private 143. B. House and J.W. McArthur (2015). ‘Op-Ed: Getting the details sector in aid and development, August 2015, http://dfat.gov.au/ 118. UK Aid Network (2015). ‘Leveraging Aid: A literature review on the right on the development finance initiative’. Ottawa Citizen. about-us/publications/aid/Documents/creating-shared-value- additionality of using ODA to leverage private investments’. http:// http://ottawacitizen.com/news/politics/getting-the-details- through-partnership.pdf www.ukan.org.uk/wordpress/wp-content/uploads/2015/03/ right-on-the-development-finance-initiative; https://www.ewb. UKAN-Leveraging-Aid-Literature-Review-03.15.pdf, p.4. 129. Commonwealth of Australia, DFAT (2017). ‘Performance of Australian ca/wp-content/uploads/2017/03/DFI-Policy-Brief-1.pdf Aid 2015–16’, p.10. http://dfat.gov.au/about-us/publications/ 119. J. Pereira, for Oxfam and Eurodad (2017). ‘Blended Finance: What 144. 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93 146. This figure includes the total bilateral and multilateral ODA from register.consilium.europa.eu/doc/srv?l=EN&f=ST%205602%20 172. AFD (2016). ‘Rapport d’Activité AFD 2016’. http://www.afd.fr/ 28 EU members, excluding debt relief provided in the DAC 2016 2014%20INIT webdav/site/afd/shared/PRESSE/communiques/Resultats- preliminary figures and including EIB loans provided by the AFD-2016.pdf, p.10. European Commission. 159. The EU Institutions do not normally include in-donor refugee costs in their aid reporting to the OECD DAC. 173. See the full index here: http://ati.publishwhatyoufund.org/wp- 147. ‘The New European Consensus on Development: ‘Our World, content/uploads/2016/02/ATI-2016_Report_Proof_DIGITAL.pdf Our Dignity, Our Future’’, Joint statement by the Council and 160. European Commission. ‘European External Investment Plan the Representatives of the Governments of the Member States Fact Sheet’. http://europa.eu/rapid/press-release_MEMO-16- 174. https://opendata.afd.fr/page/accueil/ 3006_en.htm meeting within the Council, the European Parliament and 175. The two other data portals are: http://www.data.gouv.fr and the European Commission, 8 June 2017. https://ec.europa. 161. The 2016 Aid Transparency Index does not include an analysis of the http://www.transparence-aide.gouv.fr eu/europeaid/sites/devco/files/european-consensus-on- Enlargement department of the European Commission, which was development-final-20170626_en.pdf present in the 2014 Index, when it ranked as ‘good’. The Humanitarian 176. French ODA should increase by at least €1.3 billion in 2018 to ensure that the country is on track to reach the 0.7% target 148. Council of the European Union (2015). ‘A New Global Partnership Aid and Civil Protection department’s ranking has improved from ‘fair’ to ‘good’ (71.9%) since it published new indicators in 2015. by 2022. This figure was calculated by ONE, using the GDP for Poverty Eradication and Sustainable Development after 2015’. projections of the OECD and assuming that ODA levels will http://data.consilium.europa.eu/doc/document/ST-9241-2015- 162. European Commission, AMLD: ‘Proposal for a Directive of the see a linear increase from 2018 to 2022. INIT/en/pdf European Parliament and of the Council; Amending Directive (EU) 2015/849 on the prevention of the use of the financial system 177. BMZ (2016). ‘Hoher Haushaltsaufwuchs des BMZ’. http://www. 149. DAC preliminary figures for 2016 do not include a country-by- bmz.de/de/presse/aktuelleMeldungen/2016/november/161111_ country breakdown, hence the comparison between 2014 and for the purposes of money laundering or terrorist financing and amending Directive 2009/101/EC’, 5 July 2016, http://ec.europa. pm_095_Hoher-Haushaltsaufwuchs-des-BMZ-Krisen- 2015. The European Commission projects that this figure will bewaeltigen-Perspektiven-vor-Ort-schaffen/index.jsp increase compared with 2015 levels. eu/justice/criminal/document/files/aml-directive_en.pdf 163. Elysee (2017). ‘Press release - International aid’. http://www. 178. BMZ. ‘Ländliche Entwicklung und Ernährungssicherung’. 150. This includes only LDC ODA from the 20 EU Member States http://www.bmz.de/de/themen/ernaehrung/ which are members of the OECD DAC. The remaining eight EU elysee.fr/communiques-de-presse/article/communique-aide- Member States report some aid data to the DAC, but in less detail internationale/ 179. BMZ (2017). ‘Entwicklungspolitik als Zukunfts- und Friedenspolitik. and not as regularly as the 20 DAC members. Ahead of the DAC 164. Decision memo from the interdepartmental committee on 15. Entwicklungspolitischer Bericht der Bundesregierung’. preliminary release in April 2017, they reported data on their global international cooperation and development, paragraph 5, http://www.bmz.de/de/mediathek/publikationen/reihen/ ODA in 2016 but not on their aid to LDCs and sub-Saharan Africa. November 2016, http://www.diplomatie.gouv.fr/IMG/pdf/161128- infobroschueren_flyer/infobroschueren/Materialie319_ Germany did not report its LDC ODA levels for 2016 ahead of the projet-releve-de-decisions-cicid-court-propre_cle0c3db6.pdf Entwicklungspolitischer_Bericht.pdf DAC preliminary release in April 2017. Therefore, ONE flatlined 2015 180. DEG (2016). ‘Recent Report by EDFI: Investing to create jobs, levels to calculate the total for the EU Member States. 165. AFD (2012). ‘Plan d’Orientations Stratégiques 2012–2016’. http://www.afd.fr/home/publications/Publications- boost growth and fight poverty’. https://www.deginvest. 151. This includes only Africa ODA from the 20 EU Member States institutionnelles/Orientations-Strategiques de/International-financing/DEG/Presse/News/News- which are members of the OECD DAC. Details_365696.html 166. Proparco. ‘L’Essentiel de Proparco’. http://www.proparco. 152. This includes only sub-Saharan Africa ODA from the 20 EU fr/webdav/site/proparco/shared/ELEMENTS_COMMUNS/ 181. DEG, ‘Mehr als Finanzierung, die DEG im Überblick’, January 2017. Member States which are members of the OECD DAC. PROPARCO/Publications/L_essentiel_de_Proparco/L_ https://www.deginvest.de/DEG-Dokumente/Download-Center/ DEG_Imageflyer_2017_D_Web.pdf 153. This includes only LDC ODA from the 20 EU Member States which essentiel_de_Proparco_2016_FR.pdf are members of the OECD DAC. 167. AFD (2016). ‘Résultats 2016. Un Monde en Commun’. http:// 182. Information from DEG as per request by ONE in Germany, as of May 2017. 154. This only includes in-donor refugee costs from 20 EU Member www.afd.fr/webdav/site/afd/shared/PRESSE/communiques/ States that are also DAC donors. Resultats-AFD-2016.pdf 183. Investments from DEG enable higher overall investments through 168. AFD (2016). ‘Résultats 2016. Un Monde en Commun’. http:// co-financing and by making a company more attractive to other 155. This only includes in-donor refugee costs from 20 EU Member investors. States that are also DAC donors. www.afd.fr/webdav/site/afd/shared/PRESSE/communiques/ Resultats-AFD-2016.pdf 184. Information from DEG as per request by ONE in Germany, 156. Council of the European Union, ‘Conclusions by the President as of May 2017. of the European Council’, 9 March 2017, http://www.consilium. 169. AFD (2016). ‘L’AFD en Chiffres 2011–2015: Analyse Rétrospective europa.eu/en/meetings/european-council/2017/03/09- de l’Activité de l’Agence Française de Développment’. http:// 185. Information from DEG as per request by ONE in Germany, conclusions-pec_pdf/ www.afd.fr/webdav/site/afd/shared/PUBLICATIONS/ as of May 2017. INSTITUTIONNEL/analyse-evolution-activite-afd-2015-VF.pdf 157. The New European Consensus on Development: ‘Our World, 186. Information from DEG as per request by ONE in Germany, Our Dignity, Our Future’, Joint statement by the Council and 170. Proparco (2015). ‘Panorama 2015; Sur le terrain avec les acteurs as of May 2017. the Representatives of the Governments of the Member States privés’. Annual Report. http://www.proparco.fr/webdav/ 187. Information from DEG as per request by ONE in Germany, meeting within the Council, the European Parliament and site/proparco/shared/ELEMENTS_COMMUNS/PROPARCO/ as of May 2017. the European Commission, 8 June 2017. https://ec.europa. 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