Budget Toolkit: Norway

The OECD collects and publishes granular data on DAC donors' ODA. While this data, featured in our Donor Tracker Profiles, provides the most comprehensive view of donor government ODA spending and is crucial for accountability and transparency, it provides only a past perspective. The time taken to collect and verify the information means that preliminary data are published about 3 months after the calendar year ends, and the complete and detailed data on resource flows take more than 12 months to be published.

To get a more up-to-date view on donors’ future plans and to influence ODA budgetary decisions, advocates need to look to donor budgets and their surrounding decision-making processes for insight. The majority of donors publish draft budgets and conduct negotiations in the last quarter of the calendar year before finalizing the next year’s budget. Through this series of Donor Budget Toolkits, the Donor Tracker aims to support advocates in better understanding donor budget timelines, how they translate to ODA spending, and how decision-making processes work, so they can best advocate for development cooperation in donor budgets negotiations. The series will be released over the upcoming months, in line with ongoing budget negotiations in markets tracked by the Donor Tracker.

ODA volume

How much ODA does Norway contribute?

Norway was the 10^th-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.

ODA sources

What are the main sources of Norway's ODA?

Norwegian ODA comes from two main sources: MFA and the Ministry of Climate and Environment. The 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:

• Thematic cooperation;
• Bilateral cooperation;
• Multilateral funding (outside of specific thematic cooperation); and
• Administrative costs.

ODA decision-makers

Who makes decisions on Norway's ODA budget?

Norway has a parliamentary system of government with a constitutional monarchy. Its governmental structure consists of three branches: the executive, legislative, and judicial branches.

Executive Branch:

The King: Norway is a constitutional monarchy, and the King is the ceremonial head of state with limited powers. The King's role in the budget process is largely symbolic and does not play a direct role in budget decisions.

The Government: The executive power is vested in the government, headed by the Prime Minister. The government is responsible for proposing the annual budget to Parliament based on its policy priorities and objectives.

Legislative Branch:

Parliament (Stortinget): The Norwegian Parliament, known as the Stortinget, is the supreme legislative body. It is a unicameral legislature with 169 members who are elected through proportional representation.

The Stortinget plays a crucial role in the budget process. The government presents its proposed budget for the upcoming fiscal year to Parliament. The budget is then thoroughly reviewed and debated by parliamentary Standing Committees. Members of Parliament have the authority to amend the budget proposal and allocate funds according to their priorities during negotiations.

The budget must be approved by the Stortinget before it can become law. It requires a majority vote in Parliament to pass the budget. If the budget proposal is rejected, the government must revise and resubmit it.

Judicial Branch:

Does not directly participate in the budget process.

Key Stakeholders:

ODA Timeline

When and how are decisions on Norway's budget made?

The budget process runs over two years. Preparatory work starts about a year before the current fiscal year, and the ongoing budget may be amended in March/April and in August.

Current Budget Impact

What does the current development budget tell us about Norway's ODA?

In August 2023, the Norwegian government announced that Norad is to take on greater responsibility for the management of Norwegian development funding, and the Ministry of Foreign Affairs is to receive a clearer responsibility for development policy formulation. Management of international development, which currently is under the Ministry of Foreign Affairs, is slated to be transferred to Norad beginning early 2024. The change will give Norad authority over the following budget items:

• Humanitarian assistance;
• Global security issues and disarmament;
• Human rights;
• A large portion of funding for the UN; and
• Funding for Europe, Central Asia, and Afghanistan.

On December 3, 2023, the Norwegian government and the opposition SV reached an agreement on Norway's 2024 state budget. Negotiations on the 2024 state budget have been ongoing since November 13, 2024. The agreed-upon 2024 budget does not fulfill Norway's 1% ODA/GNI target. According to Norwegian Church Aid, NOK2.1 billion (US$196 million) is missing to achieve the government's goal of 1% ODA/GNI to international development. The agreement included an allocation of an additional NOK1 billion (US$93 million) to climate and forestry investments. This was the only change in the budget for international development.

Kirsti Bergstø, the leader of SV underlined that it is the governing party’s responsibility to achieve 1% ODA/GNI. Bergstø had previously announced that SV was not going to save 1% ODA/GNI at all costs during the budget negotiations. The SV argued that the government had stated the intention to commit 1% ODA/GNI to the UN SDGs.

Several stakeholders criticized the fact that the SV did not prioritize the 1% ODA/GNI target in the negotiations.

Secretary-General of Norwegian Church Aid Dagfinn Høybråten described the agreement as deeply disappointing and incomprehensible. He underlined multiple extraordinary and intersecting global crises, including widespread war and conflict, a global food crisis, and a climate crisis requiring immediate action. Høybråten noted that Norway has enormous additional income from oil sales, putting it in a unique financial state to undertake development action. He asserted that in light of this, Norway should give significantly more 1% of GNI to international development rather than reducing its ambitions as the 2024 has done.

Secretary-General of Save the Children Birgitte Lange shared a similar disappointment. She argued that global extreme poverty is increasing and threatening increasing numbers of children. She expressed disappointment that the SV did not use its negotiating power to push for more funding to international development.

Deputy leader of the Liberal Party Sveinung Rotevatn, a traditional ally of the SV in prioritizing strong allocations towards international development, expressed approval that the government and the SV committed to strengthening funding to welfare services in Norway. He noted, however, that he believes that Norway, one of the wealthiest countries in the world, should be able to allocate 1 % of GNI to development.

Next steps?

The 2025 budget will begin with Norad and Norwegian embassies developing internal budget drafts, which will be submitted by the end of January 2024. With multiple consecutive years of missing ht e1% ODA/GNI goal, advocates are pushing for a reversal of this trend for 2025.