Luxembourg

ODA Spending

How much ODA does Luxembourg contribute?

In 2022 Luxembourg provided US$531 million in ODA funding, according to the OECD’s preliminary figures. By volume, this means that Luxembourg ranked 23^rd among DAC donors. In 2022 Luxembourg’s ODA/GNI was 1%, the highest ODA/GNI among all DAC countries.

How is Luxembourg's ODA changing?

Luxembourg’s ODA volumes have remained relatively stable between 2018 and 2022 (constant 2021 prices). Similarly, ODA/GNI has also remained around 1% since 2018.

How is Luxembourg's ODA allocated?

In 2022, US$72 million (13%) of Luxembourg’s ODA was spent on contributions to the:ABBREU ( US$64 million, 11%) and support to Ukraine (US$8 million, 1%). In comparison, the total DAC share for the same year was 25%. This left US$499 million of ODA for development priorities. In its Development Cooperation Strategy, Luxembourg states that it will not count IDRC as part of ODA flows.

In 2021, 68% of Luxembourg’s ODA was channeled bilaterally (including direct and earmarked funding), higher than the DAC average of 59%. Luxembourg’s share of ODA channeled as direct bilateral funding is relatively high at 52%, compared to the 43% DAC average. In 2021, 32% of total gross ODA was core funding to multilaterals, compared to the DAC average of 41% in 2021.

Bilateral Spending

The top five partner countries in 2021 were Niger, Burkina Faso, Senegal, Cabo Verde, and Mali – all of whom are priority partner countries, along with Laos and Nicaragua, indicated in Luxembourg’s Road to 2030 strategy. Luxembourg is committed to providing at least 50% of bilateral ODA to priority partner countries.

Multilateral Spending and Commitments

In 2021, Luxembourg’s funding to core multilaterals was US$175 million (32%) of total gross ODA.

What is the future of Luxembourg's ODA?

Luxembourg’s budget documents indicate a 14% increase in the development cooperation budget between 2022 and 2023, translating to a projected ODA of US$603 million in 2023. The projected January-April 2024 budget suggests no change in funding levels between 2023 and 2024.

Politics & Priorities

What is the current state of Luxembourg's politics?

Luxembourg is a parliamentary representative democratic monarchy, headed by Frieden Luc (Christian Social People’s Party). The current government is a coalition between the CSV and the Democratic Party, which was formed after the general elections in October 2023.

Former Prime Minister Xavier Bettel ( DP) is the current Deputy Prime Minister, as well as the Minister of Foreign Affairs and Minister of Cooperation and Humanitarian Action.

Who is responsible for allocating ODA?

Luxembourg’s MFEA, and specifically the Directorate for Development Cooperation and Humanitarian Affairs, is responsible for designing and implementing Luxembourg’s development cooperation policy with input from the ICDC. Around one-third of Luxembourg’s bilateral ODA is channeled through its development cooperation agency, Lux-Development, also known as LuxDev. The Ministry of Finance is responsible for multilateral initiatives with IFIs.

What are Luxembourg's development priorities?

Luxembourg’s development co-operation strategy, The Road to 2030, prioritizes four themes:

• Access to quality basic social services
• Socio-economic integration of women and youth
• Inclusive and sustainable growth; and
• Inclusive governance.

The strategy also mentions three priority cross-cutting themes:

• Human rights
• Gender equality; and
• Environmental sustainability.

The Road to 2030 indicates Luxembourg’s aim to align with the EU’s Common Foreign and Security Policy, as well as active engagement:ABBREU policymaking and coordination on development cooperation policy and humanitarian action.

Luxembourg actively promotes sustainable financing, including by introducing a sustainability check for all new regulations to improve policy coherence for sustainable development. In August 2022, Luxembourg adopted a new humanitarian action strategy that committed Luxembourg to allocate 15% of its overall annual ODA to humanitarian actions. This commitment is unlikely to significantly affect Luxembourg’s ODA composition, as 18% of bilateral ODA was already allocated to humanitarian assistance in 2021.