Official development assistance (ODA) is defined by the OECD Development Assistance Committee (DAC) as government aid that promotes and specifically targets the economic development and welfare of developing countries. The DAC adopted ODA as the “gold standard” of foreign aid in 1969 and it remains the main source of financing for development aid.
What is ODA?
ODA is flows to countries and territories on the DAC List of ODA Recipients and to multilateral development institutions that are:
i. Provided by official agencies, including state and local governments, or by their executive agencies; and
ii. Concessional (i.e. grants and soft loans) and administered with the promotion of the economic development and welfare of developing countries as the main objective.
ODA data is collected, verified and made publicly available by the OECD.
OECD statistics are the only source of official, verified and comparable data on aid reported by 30 members of the OECD Development Assistance Committee (DAC) and about 80 other providers of development cooperation, including other countries, multilateral organisations and private foundations.
The OECD collects and publishes ODA data throughout the year:
April: aggregate level preliminary ODA data for prior calendar year and forward spending plans for year +3;
December: final detailed data including all individual project level data (CRS) for prior calendar year;
June & September: updates and revisions.
What is not ODA?
Military aid and promotion of donor’s security interests
Transactions that have primarily commercial objectives e.g. export credits
Foreign aid from official donors in 2018 fell 2.7% from 2017, with a declining share going to the neediest countries. The drop was largely due to less aid being spent on hosting refugees as arrivals slowed and rules were tightened on which refugee costs can come out of official aid budgets.
Official development assistance (ODA) from the 30 members of the OECD’s Development Assistance Committee (DAC) totalled USD 153.0 billion in 2018 as calculated using a new “grant-equivalent” methodology adopted from today as a more accurate way to count the donor effort in development loans. Under the “cash-flow basis” methodology used in the past, 2018 ODA was USD 149.3 billion, down 2.7% in real terms from 2017.
OECD Official Development Assistance (ODA) Statistics: Introducing the grant equivalent
In 2019, the grant equivalent system became the standard for measuring ODA. Although data on the grant equivalent measure were collected and published during a transition period from 2016 to 2018, in 2019 it became the standard: in April 2019, ODA headline figures applying this new standard were published for the first time, when the preliminary 2018 ODA statistics were released. Data on actual flows (i.e. disbursements and loan repayments) continue to be collected and published to ensure transparency.
Beyond 2019, the DAC will continue to adjust its statistical systems to new realities and needs. Work will continue to make the reporting of private sector instruments and debt relief consistent with the new grant equivalent method. Work is also ongoing in relation to the methodology for updating the DAC List of ODA Recipients (e.g. on reinstating countries or territories on the List in case of catastrophic humanitarian crisis) and the methods for measuring the SDG focus of development co-operation (purpose codes, policy markers) in view of keeping the statistical classifications relevant and fit-for-purpose with the 2030 agenda.
The new statistical framework:
measures ODA loans more accurately and credibly, ensuring comparability of data across providers,
encourages more and better allocation of concessional resources to implement the SDGs,
promotes greater transparency and heightened accountability, helping to ensure that ODA goes where it is most needed and has the greatest development impact.