Last updated: April 28, 2023
Norway was the 10th-largest donor country among members of the OECD DAC in 2021.
Norway was the second-largest donor in proportion to the size of its economy. The country spent 0.93% of its GNI on ODA in 2021. OECD preliminary data shows Norway dropped below Sweden, with 0.86% ODA/GNI in 2022. There is broad political support for Norway to return to a 1% ODA/GNI ratio.
2022 was the second year in a row (and the third time since 2013) that Norway did not meet its 1% ODA/GNI target and also reflected the lowest ODA/GNI ratio in the past decade. The low ratio was driven by an unexpected increase in GNI. Norway's total ODA rose by 2% compared to 2021 levels. Without in-donor refugee costs (which made up 9% of total ODA), Norway's ODA fell by 6% compared to 2021 levels.
In 2022, the Center-Left government proposed to reduce ODA to 0.75% of GNI in 2023. However, this proposal was abandoned in December 2022 following domestic and global criticism of Norway’s failure to increase ODA spending in proportion to its gains in GNI due to the war in Ukraine. Following negotiations with the SV party, the government announced an additional five-year funding package worth NOK75 billion, or US$$7.8 billion, for Ukraine to maintain an ODA/GNI ratio of 1%.
ODA decreased by 12% between 2020 and 2021, driven by high inflation due to a price increase in raw materials such as oil and gas, electricity, and fish, of which Norway is a large producer. However, soaring petroleum revenues due to the war in Ukraine drastically increased Norway’s GNI in 2022, a trend that has continued into 2023.
Over the past decade, in-donor refugee spending has decreased from a peak of 18% of ODA in 2016 to 1% of ODA in 2021. While the government decided to increase ODA spending on refugee costs in 2022 due to the Russian invasion of Ukraine, estimated costs comprise 3.7% of ODA in 2023 and are expected to remain low in future years.
Norway’s government considers funding through multilateral organizations an effective way to pursue its priorities. Support for multilateral organizations is composed of earmarked funding channeled through multilateral organizations for specific sectors or regions as well as core funding to multilaterals.
Alongside multilaterals, CSOs are key partners for Norwegian development cooperation. In 2021, 27% of Norwegian bilateral ODA was channeled through CSOs, well above the DAC average of 17%.
In recent years, Norway has increasingly prioritized private sector development and job creation in development cooperation. Much of Norway’s support for economic development is administered through Norfund, a state-owned investment fund supporting private-sector activities in partner countries, whose investments are not ODA-eligible.
Norway’s strategic priorities are largely reflected in its bilateral funding allocations. In 2021, humanitarian assistance and health and populations received the largest shares of bilateral ODA at 15% each, or US$536 million and US$533 million, respectively. Government and civil society as well as environmental protection were the next largest priorities, receiving 12%, or US$419 million, and 11%, or US$401 million, of ODA, respectively.
For 2023, the government has decided to increase funding for humanitarian assistance, efforts to combat hunger and climate change, and efforts to promote women’s rights. This trend is in accord with the Hurdalen platform, the coalition agreement that outlines the overarching direction of the government to the parliament for the period 2021-2025.
Norway directs most of its ODA to LICs, as defined by the DAC. Because a large share of Norway’s ODA is channeled as earmarked funding to multilaterals to support CSOs and in-country refugee costs, 57% of Norway’s bilateral ODA in 2021 was not allocated to a specific income group. As a result, explicit funding for LICs officially accounted for only 21% of bilateral ODA in 2021. However, including the share of bilateral ODA provided for multilateral projects in LICs or refugee costs, 52% of bilateral ODA went to LICs.
In 2021, Norway channeled 25% of its ODA, or US$1.2 billion, as core contributions to multilateral organizations, significantly below the 41% average among members of the OECD DAC. However, Norway channeled another 33% of its ODA, or US$1.5 billion, in the form of earmarked funding through multilaterals, much higher than the DAC’s average of 16%.
Norway published guidelines for its multilateral policy in a 2019 MFA white paper entitled ‘Norway’s Role and Interest in Multilateral Cooperation.’
Norway is a strong supporter of the UN system. UN agencies received 43% of Norway’s core contributions to multilateral organizations in 2021. 14% went to the World Bank, and 10% to regional development banks. The current government strongly supports vertical funds, especially in the global health sector.
Recent commitments to multilateral organizations are summarized below.
Norway is a parliamentary democratic constitutional monarchy. Political power is divided among the cabinet, called the Council of the State, which is overseen by the prime minister; the legislature, or Storting; and the judiciary, which is independent of the other branches. There are elections for the Storting every four years. The five dominant political parties are the Labor Party or ‘Arbeiderpartiert’, the Conservative Party, the Center Party or ‘Senterpartiert’, the Progress Party, and the SV Party.
Jonas Gahr Støre is the current prime minister of Norway and has been in office since October 2021. The AP and SP are part of the coalition government and have both been in power since the general elections in September 2021.
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Norway’s development policy priorities are listed in the MFA’s 2016 white paper, Common responsibility for a common future – the Sustainable Development Goals and Norwegian Development Policy, and include:
- Global health;
- Humanitarian assistance;
- Private sector development, agriculture, and renewable energy; and
- Climate change, environment, and oceans.
The current government’s priorities for 2021-2025 were published in the Hurdalen platform and include:
- Climate and clean energy;
- The fight against hunger;
- The fight against inequality;
- Women’s rights;
- Humanitarian assistance; and
- The fight against infectious diseases.
At the end of 2022 and the beginning of 2023, the government launched three new strategies closely aligned with its priorities within international development:
- A new strategy to combat hunger and enhance global food security was launched on November 29, 2022. The strategy is part of the government's work on food security and the fight against hunger, and their efforts to change food systems in developing countries.
- On February 16, 2023, the government launched a strategy for climate change adaptation, disaster risk reduction, and the fight against hunger. This strategy will provide the framework for Norwegian climate adaptation measures considering the threefold increase in funding for this area.
- In addition, an action plan on gender and sexuality diversity (2023–2026) was published on February 17, 2023, consisting of 49 measures to scale up efforts for the LGBTQ+ community domestically and abroad.
Climate change: The Norwegian government’s commitment to climate change, the environment, and oceans is reflected in its substantial funding for this issue. At COP26, Norway also announced a target to double its overall climate finance from NOK7 billion, or US$743 million, in 2020 to NOK14 billion, or US$1.5 billion, by 2026. In February 2023, Norway launched a strategy for climate change adaptation, disaster risk reduction, and the fight against hunger which outlined its path to achieving this target.
One of the government’s largest development programs is NICFI, through which it has pledged up to NOK3 billion, or US$512 million, per year to reduce deforestation. Funding for this program is channeled through the Ministry of Climate and the Environment.
In May 2022, Norway’s launched its Climate Investment Fund. The fund is described as one of Norway’s most important tools in accelerating the global energy transition by investing in renewable energy in LMICs that have large emissions from coal and other fossil fuels. The fund will receive initial funding of with NOK2 billion, or US$208 million, each year for the next five years and will be managed by Norfund.
Norway is also a strong supporter of multilateral organizations for climate. In 2020, the government announced it would double its annual contribution to the GCF between 2020 and 2023, totaling NOK3.2 billion, or US$340 million, for the entire period, making Norway the organization’s third-largest donor per capita.
Education and gender equality: The previous government under former Prime Minister Erna Solberg prioritized education, particularly for girls and women. Between 2013 and 2017, funding to the sector doubled and has remained high. The current government under Prime Minister Jonas Gahr Støre is committed to the goal of providing at least NOK3.4 billion, or US$354 million, to education between 2022 and 2026.
Within education, priority areas include:
- Enhancing opportunities for women and girls to complete high-quality and free primary and secondary schooling;
- Equal access to higher education (including university education) and quality technical and vocational training; and learning opportunities for women and girls in crisis and conflict situations.
Norway is the 4th largest donor to GPE, committing NOK3.7 billion, or US$430 million, for 2021-2025.
Norway considers education a core component of its humanitarian assistance policy and shows international leadership in the area. It is one of five founding donors to ECW, a fund launched in 2016 that aims to improve access to education services in humanitarian emergencies and crises. In total, Norway has contributed US$83 million to the fund. During ECW’s High-level Financing Conference in February 2023, Norway announced an additional allocation of NOK500 million, or US$52 million, to the fund for the period 2023-2025. Norway is the 5th-largest donor to ECW after Germany, the UK, US, and Denmark.
Global health: Norway’s longstanding prioritization of global health was reinforced by the COVID-19 pandemic. The ‘health’ budget line within Norway’s ODA budget, stands at NOK3.7 billion, or US$385 million, for 2023. According to Norad’s 2021 statistics, Norway’s contributions towards health-related ODA, including core support for multilateral organizations, stood at NOK7.9 billion, or US$920 million, in 2021. Of this, NOK2.9 billion, or US$338 million, supported COVID-19 response in LICs.
In the fall of 2019, the government launched its strategy Better Health, Better Lives, which focuses specifically on combatting non-communicable diseases through development cooperation (applicable from 2020-2024).
Agriculture: Food security and agriculture are highlighted as a main priority in the Hurdalen platform. In particular, the government’s approach to this topic focuses on sustainable, small-scale production and climate-smart agriculture. In the 2023 budget, NOK1.7 billion, or US$177 million, has been allocated to this budget line, which is contained in the budget envelope for ‘Business development, agriculture and renewable energy’.
In November 2022, the government launched a new strategy on food security: Gathering power against famine - a policy for increasing self-sufficiency, which focuses on local and national food security through investments in small-scale food producers, their value chains and climate-robust development.
’Sub-Saharan Africa’: Geographically, SSA receives the largest share of Norway’s bilateral ODA.
According to the MFA’s 2017 white paper on the Sustainable Development Goals, Norway focuses on bilateral cooperation with 16 countries, advancing a holistic and cross-sectoral approach to development in each. The paper outlines two categories of partners:
- Partners for long-term development cooperation: Colombia, Ethiopia, Ghana, Indonesia, Malawi, Mozambique, Myanmar, Nepal, Tanzania, and Uganda; and
- Partners for stabilization and conflict prevention with a holistic and long-term perspective: Afghanistan, Mali, Niger, Palestine, Somalia, and South Sudan.
In March 2023, Minister of Foreign Affairs Anniken Huitfeldt and Minister of International Development Anne Beathe Tvinnereim met with Norwegian private sector and civil society stakeholders to discuss updates to the Norwegian-Africa policy. According to the MFA, the new policy will be presented during the summer of 2024. The aim of the strategy is to target rapid development on the African continent and to update the policy to reflect Africa's changing geopolitical role.
Norway’s commitment to spend 1% of GNI on development cooperation ensures that increases in ODA are closely linked to Norway’s economic growth. The government's proposal to reduce ODA/GNI ratio to 0.75% in 2023 was contested by the SV, resulting in a return to the 1% ODA/GNI ratio. As a result, Norway continues to rank highly on the OECD list of donors based on their proportion of ODA to GNI.
In November 2022, the government and the Socialist Left Party agreed on the state ODA budget for 2023, which amounted to NOK44.2 billion, or US$4.6 billion. In addition to the 2023 budget, the government and the Socialist Left Party negotiated a supplemental allocation for funding to Ukraine and LICs affected by the consequences of the Russian war in Ukraine in spring 2023 to meet the 1% ODA/GNI target.
In 2023, the ODA budget totals NOK44.2 billion, or US$4.6 billion, and 1% of estimated GNI. The budget’s priorities focus on the global impact of the war in Ukraine, including humanitarian assistance, efforts to combat hunger and climate change, and increased efforts to promote women's rights. Additionally, the 2023 budget includes a new line for ‘Refugees, displaced persons and host communities,’ which totals NOK2.8 billion, or US$291 million.
As part of the government’s decision to maintain the 1% ODA/GNI ratio in 2023, the government agreed on a compromise to top up the 2023 budget with a long-term funding package for Ukraine and low-income countries affected by the war. The package consists of NOK75 billion, or US$7.8 billion, in funding to Ukraine over five years, with annual disbursements of approximately NOK15 billion, or US$1.6 billion.
Due to reallocations to the new budget line for refugees, in-country refugee costs have decreased compared to the 2022 revised budget (NOK1.6 billion, or US$169 million). The budget line on humanitarian assistance also decreased by 32% compared to the 2022 revised budget.
The budget line for ‘business development, agriculture, and renewable energy,’ also received increased funding as top priorities in the 2023 ODA budget, totaling NOK5.5 billion, or US$572 million. Following an increase in 2021 due to COVID-19 response, the health budget remains at a high level in 2023 despite a slight decrease compared to 2022.
Norwegian ODA comes from two main sources: MFA and the Ministry of Climate and Environment. MFA provides 93% (NOK40.6 billion, or US$4.2 billion) of the ODA budget. The MFA’s ODA budget provides detailed information on the allocation of funding and can be divided into four major categories: 1) thematic cooperation, 2) bilateral cooperation, 3) multilateral funding (outside of specific thematic cooperation), and 4) administration costs.
The budget process runs over a two years. Preparatory work starts about a year before the actual fiscal year and the ongoing budget may be amended in March/April and in August.
- Ministries prepare initial internal budget drafts: From November to the end of January, Norway’s development agency, Norad, and Norwegian embassies prepare budget input to submit to the relevant ministries. These ministries then begin developing their budget suggestions to present by January 25. Key stakeholders during this period are senior staff at the Norwegian embassies, Norad, and senior officials from MFA.
- First budget conference – the government decides on indicative ministerial budget ceilings: By March, Norwegian embassies and Norad have prepared their preliminary internal budgets. MFA and Norad leadership ultimately make decisions on budget allocations. In parallel, embassies start identifying bilateral projects for the coming year. Ministerial budget proposals are presented to the government at its first budget conference around March 10, when the government sets indicative budget ceilings for each ministry. Budget ceilings are handed announced around March 20.
- The MFA further refines internal budgets: Once the government has set the MFA’s indicative spending, MFA further develops its budget from April to July/August.
- Second budget conference – the government makes a final decision on the overall draft budget: Usually in late August/September, the government holds its second budget conference to agree on final ministerial budget caps and political priorities. At this stage, the government approves the overall ODA volume and funding for major initiatives. It usually does not debate further details of the ODA budget.
- The government presents its budget proposal to Parliament: Around September 20, the government approves the Yellow Book or initial budget proposal. At the beginning of October, the budget proposal is presented to Parliament. From October to December, MFA and the other ministries adapt their budget draft to fit within the final caps.
- Parliament debates draft budget: From October to November, Parliament debates the government’s budget draft. The Standing Committee on Finance and Economic Affairs can amend the proposed ceilings and detailed allocations for main expenditure areas until November. The Standing Committee on Foreign Affairs and Defense may propose amendments, but in practice, the Committee on Finance leads reallocations between budget lines. The additional proposals need to be presented by November 10.
- Parliament approves budget: By mid-December, the Parliament signs off on the budget for the upcoming year.
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At Donor Tracker, we prefer not to call it aid.
The Donor Tracker team, along with many DAC donor countries, no longer uses the term "foreign aid". In the modern world, "foreign aid" is monodirectional and insufficient to describe the complex nature of global development work, which, when done right, involves the establishment of profound economic and cultural ties between partners.
We strongly prefer the term Official Development Assistance (ODA) and utilize specific terms such as grant funding, loans, private sector investment, etc., which provide a clearer picture of what is concretely occurring. “Foreign aid” will be referenced for accuracy when referring to specific policies that use the term. Read more in this Donor Tracker Insight.
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