Budget Toolkit: Spain

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 Spain contribute?

Spain’s ODA was US$3.6 billion in 2021, making it the 12^th-largest OECD DAC donor in absolute terms. This amount made up 0.26% of Spain’s GNI, putting the country in the 20^th place in relative terms.

Preliminary data shows that Spain’s ODA reached US$4.2 billion in 2022, or 0.3% of GNI. This marks a significant 26% jump from 2021. It was the 12^th-largest donor in absolute terms and 20^th-largest in relative terms.

ODA sources

What are the main sources of Spain's ODA?

In Spain, all ministries account for ODA budgetary envelopes. MAEC used to be Spain’s primary ODA provider, but its share has decreased due to budget cuts. MINHAFP now manages the largest share of Spain’s ODA budget (30% in 2023), as it channels the country’s mandatory contributions to the EU.

MAEC’s budget for 2023 (EUR1.1 billion, or US$1.2 billion) increased by EUR210 million (or US$221 million) compared to its budget for 2022. MAEC’s ODA budget includes funding envelopes for the following administrative bodies in charge of Spain’s development policy:

The 3^rd-largest ODA provider is MINECO, which manages Spain’s ODA contributions to the World Bank, the IMF, and regional development banks and oversees Spain's foreign debt operations. This ministry’s ODA budget accounts for EUR489 million ( US$515 million) for 2023.

ODA decision-makers

Who decides on the development budget?

Spain has a constitutional monarchy with a parliamentary democracy, and its governmental structure consists of three main branches: the executive, legislative, and judicial branches.

The Executive Branch:

Monarch: Spain is a constitutional monarchy, and the monarch (currently King Felipe VI) serves as the ceremonial head of state with limited powers. The monarch's role in the budget process is symbolic.

Prime Minister and Cabinet: The executive power is exercised by the Prime Minister, who is the head of government. The Cabinet, appointed by the Prime Minister, is collectively responsible for proposing and implementing government policies, including the annual budget.

The Legislative Branch:

Cortes Generales: Spain's Parliament, known as the Cortes Generales, is bicameral and consists of two houses: the Congress of Deputies (Congreso de los Diputados) and the Senate (Senado).

The government, led by the Prime Minister, is responsible for preparing the annual budget proposal. The Finance Minister presents the budget to the Congress of Deputies, outlining government revenues, expenditures, and economic projections.

The Congress of Deputies plays a central role in the budget process. Members of Parliament review, debate, and vote on the budget proposal. The Senate also reviews the budget but generally has a limited role, with the final authority resting with the Congress of Deputies.

The Judicial Branch:

Does not directly participate in the budget process.

Key Stakeholders

ODA timeline

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

The Spanish fiscal year corresponds to the calendar year.

Current Budget Impact

What does the current development budget tell us about Spain’s ODA?

Spain’s ODA declined by more than half between 2010-2015 due to major budgetary adjustments as a result of the ‘Great Recession’, the Spanish financial crisis. ODA spending has since rebounded in line with Spain’s economic recovery and thanks to a renewed political commitment of Prime Minister Pedro Sánchez’s administration.

Spain has a strong focus on development cooperation with UMICs and LMICs, which collectively received 44% of bilateral ODA in 2021. This focus curbs its support to LICs, which only received 10% of bilateral ODA. Cooperation with UMICs and LMICs is focused on fostering triangular partnerships, concessional disbursements, climate change and rural development, as well as the provision of global public goods.

On February 9, 2023, the Spanish Congress of Deputies approved the new Law for Sustainable Development Cooperation and Global Solidarity with the support of all parliamentary groups except for the extreme right. It includes, for the first time in Spain’s history, the objective of increasing ODA to 0.7% of the country’s GNI by 2030. Such a target for development spending, if it were reached today, would set Spain’s ODA at US$9.7 billion.

Beyond ODA, the new development law seeks to deeply modernize the Spanish cooperation system with 1) an important reform of the AECID, which will gain power in terms of decision-making, and 2) the creation of the new FEDES fund to improve the effectiveness of blended finance, which as a result, would also count concessional disbursements, such as loans and equity investments, as ODA.

Next steps?

Following the 2023 snap general election, which resulted in a highly fragmented parliament and uncertainty for potential coalitions, Spanish Prime Minister Pedro Sánchez won an investiture vote by Parliament to remain in office for another four-year term. Sánchez will rule a minority coalition government that, according to the cabinet appointments announced on November 20, 2023, will be composed of 22 ministries. Minority governance has previously resulted in a few episodes of political stalemate and instability, and the Parliament has held greater influence over development policy as well as the ODA budget.

Parliament will discuss and amend the ministries’ 2024 draft budgets. The Development Committee provides recommendations on budget amendments, and the Budget Committee makes the final decision. Members of Parliament may present amendments to the overall budget and specific ODA budget lines in this period.