ODA joy? What the new OECD data tell us about global financing for WASH

Posted on 19/01/17 by Stuart Kempster (WaterAid UK)

The alphabet soup of aid statistics

Earlier this month, the Organisation for Economic Cooperation and Development (OECD) released the official statistics for international aid in 2015. Data on international aid is compiled by the Development Assistance Committee (DAC) - a forum of 28 donor countries and the EU which sets the global norms for development cooperation and finance. DAC have tracked financial flows to countries in the global south for over 50 years, with special attention paid to ODA (official development assistance). ODA includes official grants or loans made to developing countries (or multilateral agencies,) which promote economic development and welfare, and are provided at concessional financial terms. To allow comparisons between countries over time, DAC reports aid flows in US dollars at constant prices (these are the figures used in this blog). Most donor countries have long signed up to the principle of spending 0.7% of GNI on ODA, but this ambition has never been met on a global scale.

So then, what happened to ODA in 2015?

Total ODA increased, but…

International aid in 2015 totalled $131.4 billion, a rise of 6.6% from 2014. However, much of this increase has been as a result of increased spending of aid within donor countries. Due to the ongoing refugee crisis, many countries have been using their aid budget to provide assistance within their own borders, in the form of temporary accommodation, food, medical care, etc. In 2015, $12 billion of aid was spent within donor countries; this was more than double the figure in 2014 and accounted for 9.2% of global ODA. This is controversial. It is dubious as to whether these costs are actually in line with the ODA’s main objectives to increase economic development and welfare in developing countries, and it sees the world’s poorest countries receiving a shrinking share of the total financial support available.

Who’s providing ODA and where is it going?

The top five donors in 2015 - in terms of volume of ODA - were the United States ($31 billion), United Kingdom ($19 billion), Germany ($18 billion), Japan ($9 billion) and France ($9 billion). The largest recipients of ODA were Syria ($4.9 billion), Afghanistan ($4.3 billion), Pakistan ($3.8 billion), Ethiopia ($3.2 billion), and India ($3.2 billion).

The total volume of aid directed to the group of Least Developed Countries (LDCs) increased slightly to $43 billion; however these countries saw their share of overall aid fall by 1.6%. As 42% of the world’s population currently without access to improved drinking water live in the LDCs, the downward trend in their share of ODA is worrying and needs to be reversed.

ODA.png

Figure 1. Total ODA for DAC countries ($USD Billion) 2015. Source: OECD

Globally, the 0.7% target is not being met.

In 2015, only 6 of the 28 DAC countries - Denmark, Luxembourg, The Netherlands, Norway, Sweden and the United Kingdom – met the target of spending 0.7% of GNI on ODA. The average for DAC countries as a whole was 0.3% of GNI, a figure which has not seen significant change since 2008.

The levels of financing required to reach the WASH-related targets in the SDGs is daunting. If we are to reach everyone, everywhere by 2030, ODA has to remain an essential part of international cooperation, and the 0.7% goal remains a useful benchmark. It’s clear from the graph below that much work needs to be done globally to make this ambition a reality.

ODA % GNI.png

Figure 2. ODA as percent of GNI for DAC countries 2015. Source: OECD

Global financing for WASH: any changes?

In short, not really. The total ODA received for WASH in 2015 was $5 billion - a slight increase of 0.2% on 2014’s figures. The top donors to WASH, by volume, were Japan, Germany, France, United States, and United Kingdom. WASH still doesn’t seem to be a top priority for donors, only accounting for an average of 3% of countries’ ODA.

There was also quite a lot of continuity in the countries receiving the greatest share of WASH finance – India, Viet Nam, Morocco, Jordan, Ethiopia, China, Bangladesh and Iraq all appear in the top 10 in both 2014 and 2015.

a.png

Figure 3. Total WASH ODA Spent ($USD Millions)

2014

2015

  Country

   WASH ODA  Received (USD)

    Country

  WASH ODA      Received (USD)

1.    India

362 million

1.     Morocco

  363 million

2.    Viet Nam

338 million

2.     Viet Nam

  327 million

3.    Morocco

252 million

3.     India

  322 million

4.    Jordan

225 million

4.     Jordan

  225 million

5.    Ethiopia

198 million

5.     Iraq

  179 million

6.    Brazil

153 million

6.     China

  158 million

7.    Tanzania

138 million

7.     Ethiopia

  147 million

8.    China

137 million

8.   Bangladesh

  146 million

9.    Bangladesh

135 million

9.     Ghana

  133 million

10. Iraq

127 million

10.  Occupied      Palestinian  Territory

  113 million

Figure 4. Top ten countries receiving the most ODA for WASH in 2014 & 2015.

Are donors targeting WASH-related ODA to the countries where it is most needed?

Again, not really! Last year WASHwatch released its top ten countries in need of WASH financing to encourage a better targeting of financial flows. The methodology used to select the ‘top ten’ looked at current levels of WASH access, population levels, health impacts, and historical rates of progress. In 2015 these countries continued to feature very lowly in the global rankings of WASH-related ODA received.

   WASHwatch top ten    countries in need of WASH     finance

  WASH ODA  received (USD) 

  Absolute    ranking

  Per capita  ranking

      Chad

   29 million

   47th

   61st

      DRC

   66 million

   25th

   84th

      Kenya

   83 million

   18th

   67th

      Madagascar

   9.3 million

   70th

   99th

      Mozambique

   43 million

   38th

   69th

      Niger

   63 million

   26th

   46th

      Nigeria

   74 million

   22nd

   97th

      Uganda

   78 million

   20th

   63rd

      Tanzania

   112 million

   11th

   60th

      Zimbabwe

   20 million

   57th

   74th

Figure 5. Total WASH ODA for WASHwatch’’s 10 priority countries ($USD Millions)

What’s next?

2017 looks set to be another year of economic uncertainty, with stagnant global trade, subdued investment, and heightened policy uncertainty. Against this backdrop, it is likely that there will be further pressure on domestic budgets and international aid will continue to be a contentious political issue.

Yet despite the concurrent emergence of numerous ‘nationalist’ responses to this economic adversity, it is becoming ever more apparent that many of the world’s greatest challenges are cross-border by nature. There are many international public goods for which the economic and moral justification for international public finance is strong. It is time to reframe the way we talk about ODA; no longer as charity or aid, but as vital public finance to achieve vital public goods.

The fulfilment of human rights – including the rights to water and sanitation - is one of the most fundamental of these international public goods. To ensure that everyone can fulfil these rights by 2030, we need to work hard in the coming years to ensure that the international public finance for WASH is both adequate in volume and targeted to the countries where the need is greatest.

Stuart Kempster is a Policy Analyst – Monitoring and Accountability for WaterAid UK. He tweets as @s_kempster 

To access more in depth OECD statistics at a country level explore WASHwatch country profiles. To discover more about how WASHwatch portrays OECD statistics please read this blog