The state of ODA in 2025: A new year and new era for development assistance

Introduction

Only a month into the new year, ODA around the world is under threat. In the US, the world’s largest OECD DAC donor country, USAID is at risk of being dismantled by the new presidential administration as nearly all ODA has been frozen. In Germany, the second-largest donor country, ODA has faced cuts, and snap elections in February add to the uncertainty surrounding development, while many other key donor markets face their own political challenges.

The current state of affairs is the culmination of a turbulent past year for ODA, amid geopolitical tensions, economic instability, and an increasing recognition of the interconnectedness of global challenges. While the last year revealed deepening complexities that threaten the effectiveness and sustainability of development assistance in 2025 and beyond, there were also notable achievements as donors made contributions to address urgent crises. Even with fractions of their national budgets, donors showed that it was possible to save countless lives across the world. Highlighting these achievements is essential for advocates now tasked with defending the importance of ODA.

As the world enters the second quarter of the 21^st century, this Donor Tracker publication examines the major trends, successes, and setbacks throughout the last year, identifies key themes that have shaped donor priorities, and gives an outlook to the year ahead.

ODA achievements in 2024

Real lives, real impact

Last year, several key donor countries demonstrated renewed commitments to global development, including emergency responses to humanitarian crises. The International Conference in Support of Lebanon’s People and Sovereignty, held in Paris on October 24, 2024, raised US$800 million in humanitarian assistance across the health, food, water, hygiene and sanitation, and education sectors, with Germany and France giving US$100 million each.

In November and December, France coordinated with the EU to deliver three cargo flights with 100 tons of this humanitarian assistance to Lebanon. These shipments included tents, hygiene kits, and RUTF made by the French company Nutriset.

To read more on this topic, see our publication on France's role in the fight against malnutrition.

As of December 2024, European donors had allocated US$135 billion in assistance to Ukraine, while the US had provided $95.5 billion, of which US$3.7 billion was humanitarian assistance (data from January 24, 2022 until October 31st 2024). In December alone, Norway announced a new US$91 million humanitarian assistance package for Ukraine, and Australia unveiled an additional $50 million in Ukraine assistance. The UK Minister for Development also announced US$79 million for humanitarian assistance in the Middle East, Africa, and Asia as part of the UK government’s Plan for Change, and France gave an additional US$60 million to support civilians in Gaza. The necessity of such lifesaving emergency contributions cannot be understated.

Global health continued to be a central theme, with significant ODA addressing health crises including infectious diseases, MNCH, and UHC. Multilateral organizations played a key role in addressing global health crises, relying on funds committed by individual donor countries, as well as private sector partners and foundations. The WHO's 2023-2024 budget amounted to US$10.4 billion, with the US as the top donor from 2020-2023, followed by the Gates Foundation and the UK. The WHO's 2024 retrospective highlights several milestones in global health achieved in the past year. For instance, seven countries, namely Brazil, Chad, India, Jordan, Pakistan, Timor-Leste, and Viet Nam, eliminated tropical diseases in 2024, such as human African trypanosomiasis, leprosy, lymphatic filariasis, and trachoma. In addition, several nations became malaria-free or measles-free. The Global Fund to Fight AIDS, Tuberculosis and Malaria saw record-breaking contributions totaling US$15.7 billion in its seventh replenishment cycle for the 2023-2025 period, while US$8.8 billion was pledged to Gavi, the Vaccine Alliance to immunize 300 million children and support the global fight against COVID-19 in the 2021-2025 period.

Bilateral ODA from donor countries also supported diverse initiatives around the world. Within global health, the US' PEPFAR stands out as the largest commitment in history by a single nation to eliminate a single disease, and is considered to be one of the most effective global health programs in the world. Implemented by USAID, PEPFAR's US$6.5 billion annual budget has supported the fight against AIDS in 55 countries around the world. According to PEPFAR's Latest Global Program Results from December 2024, the program had provided lifesaving HIV treatment to 20.6 million people, including 566,000 children, with 2.5 million people newly enrolled on PrEP in 2024 alone. As of September 30, 2024, the program had enabled 7.8 million babies to be born HIV-free thanks to ARV treatment.

Bilateral assistance took many forms in 2024, with Japan, the world's third-largest donor of ODA, approving a supplementary budget totaling US$352 million for global health-related initiatives in FY2024 across several overarching themes, including combating infectious diseases, enhancing health equity, strengthening health systems in developing regions, and preparing for future pandemics. SRHR was a theme, with Australia allocating $57 million to the Towards Universal SRHR in the Indo-Pacific Program, which seeks to eliminate violence against women and girls, improving access to and quality of services, information, and education for SRHR, while Canada unveiled US$49 million for development projects supporting SRHR, mental health, and education for women and girls in Mozambique.

Climate change was another area of focus, as global temperatures in 2024 surpassed the 1.5-degree Celsius limit agreed upon in the Paris Accords. However, this limit refers to a 20-year moving average, so it would still be possible to meet the goal with globally coordinated actions. International carbon market standards were agreed upon at COP29, providing a universal framework for exchanging carbon credits, and innovations such as the EU's ETS and CBAM are creating new opportunities for the reduction of global carbon emissions. Parties of the UNFCCC agreed to give $300 billion at this year's COP in climate financing, although this fell far short of what experts say was needed.

For more analysis, see our Donor Tracker piece on the NCQG here.

As global challenges are more interconnected than ever, the value of coordinated approaches across focus areas has gained more recognition, as highlighted in our Donor Tracker publication on the Climate-Education nexus, as well as the Financing Climate x Health report presented by SEEK at Davos.

Shortcomings in 2024

Challenges and risks for ODA

Despite these worthy achievements, 2024 also brought significant challenges. Several donor countries faced domestic political instability, fiscal constraints, and competing priorities—particularly the growing demand for defense spending—that could reduce available funding for international development. The election of US President Donald Trump has foreshadowed a US withdrawal from global security agreements. In Japan and South Korea, regional security concerns and rising defense budgets may divert resources away from development assistance. The EU is also beginning to pursue self-reliance in its defense strategy, in light of the increasingly uncertain future of NATO, which will require significant increases in defense spending, potentially posing a risk to ODA.

Another trend in 2024 was the persistence of major domestic crises drowning out critical conversations of development, from South Korea’s impeachment of President Yoon Suk-yool, following his short-lived declaration of martial law, to France’s political deadlock and succession of failed governments. France failed to pass its national budget in 2024 amid concerns about government collapse, posing risks to the country’s ODA plans-- the most recently proposed 2025 austerity budget indicated a 40% cut in the development envelope. In Germany, a constitutional court ruling on Germany's debt brake that threw the proposed 2025 budget into chaos led to the collapse of the governing coalition in late 2024 and a successful no-confidence vote against Chancellor Olaf Scholz in December. Snap elections in February will likely result in a new coalition led by the center-right CDU, and a constrained fiscal space means that ODA will be the likely first target.

Competing priorities have compromised ODA funding across donors. Norway, for example, redirected part of its ODA budget to accommodate the increasing costs of hosting refugees, leading to cuts in key sectors such as health and agriculture. In countries with right-wing governments, such as Sweden and the Netherlands, ODA budgets saw significant cuts. The election of Donald Trump in the US also calls into question the reliability of commitments made only a few months ago by the Biden Administration. Last fall, the US announced US$100 million in emergency food assistance for South Sudan and US$237 million for food, shelter, health, WASH, and protection assistance, including GBV prevention and support in Ukraine. US President Joe Biden closed out 2024 with a US$1 billion commitment to 31 countries in sub-Saharan Africa, largely to address malnutrition and food insecurity. These commitments are likely to be reversed under the new administration, which has ordered a review of all ODA and declared that spending should be limited to supporting US national interests. In addition to bilateral aid cuts, funding for multilateral organizations such as the WHO is up in the air, as the US has already withdrawn from the organization.

The effectiveness of ODA has also been in the spotlight. Humanitarian assistance shipments were blocked from reaching many in need in Gaza, according to the UN, highlighting the interdependency between assistance commitments and diplomatic efforts to ensure that ODA is received. In September 2024, Papua New Guinean Minister for National Planning Ano Pala called for improved value and coherence from Australia’s assistance program, criticizing the spread of sectors in the ODA relationship, and the amount of funding going towards consultants and contractors. He referred to this as 'boomerang aid.' Australia has provided over US$433 million annually to Papua New Guinea, but CONCORD’s AidWatch 2024 report critically reported that much of the ODA reported from donor countries does not meet official ODA criteria. Disinformation has contributed to a narrative that questions the effectiveness of ODA-- in one notable case, online sources alleged that the BMZ paid EUR315 million for bicycle paths and buses in Peru, a figure which was debunked by the agency.

The year ahead

An outlook on the US for 2025

In just the first month of the new year, seismic shifts have rocked the world of ODA, especially as a result of actions by the new administration in the US. Just hours after taking office on January 20, 2025, Trump signed an executive order halting US ODA for 90 days pending review. Since then, he has attempted to unilaterally shut down USAID and subsume its duties under the US State Department, despite concerns that it would be unconstitutional to do so without Congressional approval.

US Secretary of State Marco Rubio has taken over as acting chief of USAID. This would be a close parallel to former UK Prime Minister Boris Johnson's decision in 2020 to close the DFID, moving its functions under the FCDO, a move which was also accompanied by major ODA budget cuts. With the review spearheaded by the recently-formed DOGE, questions have arisen about the true nature of the 90-day pause, which froze programs in advance of any official review process. While there is certainly room to improve institutional effectiveness, the degree to which the pause is a good-faith exercise in efficiency, or an unconstitutional and ideological assertion of authority, will be the key factor to watch.

As layoffs and stop-work orders spark chaos within the agency, reports from around the world have already begun to detail the immediate impacts of the freeze and subsequent placement of nearly all USAID employees on leave. Contractors cannot be paid, shipments of vital supplies are left with no one to take custody, and thousands of agency employees abroad have been ordered to return home at short notice, with little guidance or coordination forthcoming from the administration. Those impacted by the pause are encouraged to document the negative consequences of the suspension of US funding, maintain strong working relationships with US partners to any extent possible, and push for waivers for an expanded suite of critical services provided by the agency. A report from amfAR calculated that as many as 135,987 babies could be born with HIV during a 90-day freeze due to a halt in ARV treatment made available under PEPFAR, highlighting the critical role that US-funded programs play worldwide. Despite an ostensible waiver from the State Department to resume lifesaving HIV treatment, bureaucratic uncertainty has left many partners, including PEPFAR waiting for additional clarification.

Key moments for advocates to watch in 2025

Key elections will be happening in many donor markets, including Australia, Norway, Germany, and Canada, with right-wing governments tipped to win the most of these elections. Advocacy for ODA as an investment in a better future for all will be more important than ever. Key global moments for funding include the Nutrition for Growth Summit in March 2024 as well as the IDA, Gavi, WHO, and Pandemic Fund's ongoing replenishment rounds.

While slashed ODA budgets are a likely result of a conservative win in many major donor countries, avoiding drastic cuts does not mean that ODA will be adequately protected. There is an increasing policy shift in ODA away from poverty reduction, and towards protecting strategic national interests, particularly visible in the increasing prevalence of migration-focused ODA programs in many major markets.

A typical argument to defend ODA in fiscally and politically constrained environments takes the stance that development assistance provides donor countries with strategic influence in areas of concern. However, it is imperative for advocates to defend the spirit of development cooperation, which holds that reducing poverty and saving lives can and should be ODA's raison d'être in its own right.