Official Development Assistance (ODA) at Risk: How to Respond to Falling Funding

Introduction

According to the OECD, global ODA currently represents about 0.36% of donor countries' Gross National Income (GNI), far from the 0.7% target.

In 2023, several European countries reduced their contributions, notably the United Kingdom from 0.7% to 0.5% of GNI, Norway from 1.1% to 1.09% of GNI, and France from 0.56% to 0.48% of GNI, countries among the most committed to Official Development Assistance.

Historically, ODA has been a tool of cooperation, international solidarity, stability and the fight against poverty.

International organisations and NGOs are expressing concern about the consequences of these cuts for developing countries.

In a constantly changing world characterised by growing development needs and emergencies, how can international solidarity and the effective pursuit of the SDGs be guaranteed with such a substantial reduction in resources?

This is what we will try to look at in this article. We will start by looking at the causes and manifestations of this situation and then explore some potential ways out.

I – The causes of falling ODA funding and their consequences

• In 2024, ODA from member countries of the OECD Development Assistance Committee (DAC) fell by 7.1% in real terms compared with 2023, reaching USD 212.1 billion, or 0.33% of members' combined GNI. Only 4 countries exceeded the 0.7% ODA target as a percentage of national wealth: Denmark (0.71%), Luxembourg (1.00%), Norway (1.02%) and Sweden (0.79%) (Source: OECD).

The OECD forecasts a further fall in net ODA of between 9% and 17% in 2025, which could bring ODA back to about USD 170 to 186 billion (Source: OECD).

• In 2023, French ODA fell by 13% compared with the previous year, to USD 15 billion (€13.9 billion), or about 0.51% of French GNI (Source: Focus 2030). For 2025, France plans a 34% cut to its ODA budget, about €1.3 billion (Source: Le Monde.fr).
• The United Kingdom announced a 40% cut to its ODA budget, more than USD 7.5 billion a year, to redirect these funds to defence (Source: The Washington Post)
• The United States has considerably reduced its development aid, notably by dismantling the United States Agency for International Development (USAID) and cutting multinational aid contracts by 92% (Source: Financial Times).
• Other countries such as Germany, the Netherlands, Switzerland, Finland and Norway have also followed the same dynamic.

1 – The factors

The factors behind the fall in ODA are quite varied and we will group them into 4 categories to read them better:

• Economic factors

These are the inflationary pressures seen around the world, the explosion of public debt, the change of priorities post-COVID and the war in Ukraine that has to be financed.

• Political factors

Here we have the rise of populism, the contestation of multilateralism and the refocusing of many countries on national priorities.

• Ideological factors

Notably the questioning of the "aid-dependency" model and a will, shared by both beneficiaries and donors, for efficiency and autonomy.

• Institutional factors

These are characterised by bureaucratic delays in making ODA available to finance projects, donor fatigue, which is far from negligible, and the sometimes redundant nature of projects, with a feeling of not bringing added value compared with previous ones.

2 – The consequences

The consequences of this whole situation are being felt noticeably on the ground.

• In public policy, we see a drop in budgets allocated to health and education, though these are high-priority sectors, and a slowdown in infrastructure projects. Some projects already under way find themselves in an uncertain future, with significant delays in their progress or even a risk of cancellation.
• For local NGOs, with funding losses being significant, we now see increased dependence on calls for tenders.
• For populations, we note a social setback, as if the progress made to date were compromised and erased. Populations thus face increased vulnerability, which leads to economic migration.
• Globally, there is the more worrying than ever risk of delay on the 2030 SDGs.

Some consequences observed on the ground:

• With the closure of USAID ordered in 2025 by the Trump Administration, 5,200 aid contracts were cancelled (Source: KFF).
• Projects such as the USD 520 million "Prosper Africa" programme, aimed at promoting trade between the United States and Africa, were cancelled (Source: Health Policy Watch).
• The World Food Programme (WFP) announced a cut in emergency food aid in Somalia, from 1.1 million beneficiaries in August to 350,000 in November 2025, owing to severe funding shortages (Source: AP News).

III – How to face this situation?

Beyond the fall in funding amounts in themselves, it is above all a paradigm shift from the classic aid model that has existed since the 1960s, when most decolonisations were coming to an end around the world with a wave of independence in Africa.

More than ever, mechanisms need not to disappear but to be reinvented to fit the realities on the ground as closely as possible while preserving the needs of donors and beneficiaries, as well as the totally legitimate need for autonomy and concrete results.

Several concrete avenues can support this transition:

1. Strengthening South-South and triangular cooperation: this refers to direct collaboration between developing countries (South-South), often complemented by partnerships including a developed country (triangular cooperation). The emergence of new actors such as China, India, Brazil or Rwanda illustrates how these countries finance and implement regional projects, from energy infrastructure to public health, thereby reducing dependence on traditional ODA.
2. Innovative finance: this term covers financial instruments aimed at maximising social and environmental impact while mobilising private capital. Impact funds, green and social bonds, and blended finance mechanisms (a combination of public and private funds) make it possible to finance sustainable development projects, such as renewable energy initiatives in Kenya or affordable housing programmes in India.
3. The role of diasporas: expatriate communities represent a stable source of funding and skills transfer. For example, the Nigerian and Ethiopian diasporas contribute to education and health projects in their countries of origin, in addition to personal remittances, which often exceed the ODA received by these countries.

African diaspora remittances are estimated at more than USD 95 billion a year, more than all the aid received.

1. Public-private partnerships (PPPs): these collaborations between states and private companies make it possible to deliver essential infrastructure and services while sharing risks and costs. As we mentioned earlier in the article on school dropout, PPPs can fund innovative programmes to fight this phenomenon, as shown by experience in Ghana, where schools run as Public-Private Partnerships improved pupil retention rates.

By combining these approaches (regional cooperation, innovative finance, diaspora mobilisation and PPPs), it becomes possible to create a more resilient and inclusive development model, able to offset the fall in traditional funding and to give concrete meaning back to international solidarity.

Conclusion

The decline in Official Development Assistance should not be seen only as a threat, but as a signal to rethink international cooperation. Moving from a model centred on classic aid to a model of inclusive partnerships, involving states, companies, citizens and diasporas, is now essential. South-South and triangular cooperation, innovative finance with impact funds and green/social bonds, and public-private partnerships offer concrete solutions to support sustainable development despite shrinking traditional funding.

By combining innovation, solidarity and local mobilisation, it is possible to create more resilient, equitable and sustainable development, in which every actor becomes a co-builder of progress. The future of ODA is no longer limited to what we give, but to what we build together.