in Gleneagles, Scotland, G8 and other donors made a “Renewed Commitment to Africa” which included a pledge to increase the amount of ODA allocated to Africa by $25 billion a year by 2010, more than doubling aid to Africa compared to 2004. Since then, donors’ progress toward fulfilling their commitments has been modest. Helping Africa to develop will be a key focus of the June 2007 G-8 Leaders’ Summit in Heilgendamm, Germany.

The amount of financing actually flowing to developing countries – that is disbursements – is vitally important. Net ODA disbursements from DAC countries were about $3 billion in 2006, foll

Overview

Aid channels are proliferating and new large, non-traditional donors are appearing on the scene, contributing to aid fragmentation. Another complication is earmarking, which occurs when funds are targeted by bilaterals, philanthropic funds, and other contributors for discrete purposes like malaria, AIDS, education or disaster relief. This complicates efforts to harmonize and align aid, including through the 2005 Paris Declaration on Aid Effectiveness.

According to the 2007 GMR, total ODA from the 22 members of the OECD-Development Assistance Committee, or DAC, fell in 2006 to $103.9 billion, after having climbed to $106.8 billion in 2005. This may point to a widening gap between aid commitments and delivery, which is worrying, given that the international community is only three years away from the target to double aid to Africa by 2010 and donors have yet to make good on the promise that debt cancellation must be additional to aid increases.

Welcome signs of change are appearing, however. Two-thirds of donors now place strategic priority on implementing the 2005 Paris Declaration. A 2006 baseline survey for monitoring the Paris Declaration surfaces some of the constraints facing donors and partner countries and identifies areas of promise. At the country level, comprehensive national strategies are being developed and links to operational frameworks are being improved, but there is significant room for improvement. Regarding donor actions, around two-thirds of aid is disbursed on time and over 40 percent of aid is provided through program-based approaches such as budget support and sector-wide approaches; yet only a quarter of donor missions are undertaken jointly and only 54 percent of country analytic work is jointly prepared.

Aid Promises, Commitments, and Disbursements

Participants in Monterrey in 2002 recognized that a substantial increase in foreign aid and other resources would be required if developing countries were to achieve the MDGs. Developed countries were urged to “make concrete efforts” to increase ODA to the UN target of 0.7 percent of GNP1. The Africa Action Plan announced at the 2002 G8 Leaders Summit in Kananaskis, Canada suggested that half or more of new development assistance could be directed to Africa. At the UN World Summit in 2005, countries reaffirmed the so-called Monterrey Consensus, recognizing the importance of enhancing the aid effort, particularly in Africa. At the 2005 G8 Summit in Gleneagles, Scotland, G8 and other donors made a “Renewed Commitment to Africa” which included a pledge to increase the amount of ODA allocated to Africa by $25 billion a year by 2010, more than doubling aid to Africa compared to 2004. Since then, donors’ progress toward fulfilling their commitments has been modest. Helping Africa to develop will be a key focus of the June 2007 G-8 Leaders’ Summit in Heilgendamm, Germany.

The amount of financing actually flowing to developing countries – that is disbursements – is vitally important. Net ODA disbursements from DAC countries were about $3 billion in 2006, follo

r having climbed to $106.8 billion in 2005. This may point to a widening gap between aid commitments and delivery, which is worrying, given that the international community is only three years away from the target to double aid to Africa by 2010 and donors have yet to make good on the promise that debt cancellation must be additional to aid increases.

Welcome signs of change are appearing, however. Two-thirds of donors now place strategic priority on implementing the 2005 Paris Declaration. A 2006 baseline survey for monitoring the Paris Declaration surfaces some of the constraints facing donors and partner countries and identifies areas of promise. At the country level, comprehensive national strategies are being developed and links to operational frameworks are being improved, but there is significant room for improvement. Regarding donor actions, around two-thirds of aid is disbursed on time and over 40 percent of aid is provided through program-based approaches such as budget support and sector-wide approaches; yet only a quarter of donor missions are undertaken jointly and only 54 percent of country analytic work is jointly prepared.

Aid Promises, Commitments, and Disbursements

Participants in Monterrey in 2002 recognized that a substantial increase in foreign aid and other resources would be required if developing countries were to achieve the MDGs. Developed countries were urged to “make concrete efforts” to increase ODA to the UN target of 0.7 percent of GNP1. The Africa Action Plan announced at the 2002 G8 Leaders Summit in Kananaskis, Canada suggested that half or more of new development assistance could be directed to Africa. At the UN World Summit in 2005, countries reaffirmed the so-called Monterrey Consensus, recognizing the importance of enhancing the aid effort, particularly in Africa. At the 2005 G8 Summit in Gleneagles, Scotland, G8 and other donors made a “Renewed Commitment to Africa” which included a pledge to increase the amount of ODA allocated to Africa by $25 billion a year by 2010, more than doubling aid to Africa compared to 2004. Since then, donors’ progress toward fulfilling their commitments has been modest. Helping Africa to develop will be a key focus of the June 2007 G-8 Leaders’ Summit in Heilgendamm, Germany.

The amount of financing actually flowing to developing countries – that is disbursements – is vitally important. Net ODA disbursements from DAC countries were about $3 billion in 2006, foll

ntries and identifies areas of promise. At the country level, comprehensive national strategies are being developed and links to operational frameworks are being improved, but there is significant room for improvement. Regarding donor actions, around two-thirds of aid is disbursed on time and over 40 percent of aid is provided through program-based approaches such as budget support and sector-wide approaches; yet only a quarter of donor missions are undertaken jointly and only 54 percent of country analytic work is jointly prepared.

Aid Promises, Commitments, and Disbursements

Participants in Monterrey in 2002 recognized that a substantial increase in foreign aid and other resources would be required if developing countries were to achieve the MDGs. Developed countries were urged to “make concrete efforts” to increase ODA to the UN target of 0.7 percent of GNP1. The Africa Action Plan announced at the 2002 G8 Leaders Summit in Kananaskis, Canada suggested that half or more of new development assistance could be directed to Africa. At the UN World Summit in 2005, countries reaffirmed the so-called Monterrey Consensus, recognizing the importance of enhancing the aid effort, particularly in Africa. At the 2005 G8 Summit in Gleneagles, Scotland, G8 and other donors made a “Renewed Commitment to Africa” which included a pledge to increase the amount of ODA allocated to Africa by $25 billion a year by 2010, more than doubling aid to Africa compared to 2004. Since then, donors’ progress toward fulfilling their commitments has been modest. Helping Africa to develop will be a key focus of the June 2007 G-8 Leaders’ Summit in Heilgendamm, Germany.

The amount of financing actually flowing to developing countries – that is disbursements – is vitally important. Net ODA disbursements from DAC countries were about $3 billion in 2006, foll

2002 recognized that a substantial increase in foreign aid and other resources would be required if developing countries were to achieve the MDGs. Developed countries were urged to “make concrete efforts” to increase ODA to the UN target of 0.7 percent of GNP1. The Africa Action Plan announced at the 2002 G8 Leaders Summit in Kananaskis, Canada suggested that half or more of new development assistance could be directed to Africa. At the UN World Summit in 2005, countries reaffirmed the so-called Monterrey Consensus, recognizing the importance of enhancing the aid effort, particularly in Africa. At the 2005 G8 Summit in Gleneagles, Scotland, G8 and other donors made a “Renewed Commitment to Africa” which included a pledge to increase the amount of ODA allocated to Africa by $25 billion a year by 2010, more than doubling aid to Africa compared to 2004. Since then, donors’ progress toward fulfilling their commitments has been modest. Helping Africa to develop will be a key focus of the June 2007 G-8 Leaders’ Summit in Heilgendamm, Germany.

The amount of financing actually flowing to developing countries – that is disbursements – is vitally important. Net ODA disbursements from DAC countries were about $3 billion in 2006, foll

in Gleneagles, Scotland, G8 and other donors made a “Renewed Commitment to Africa” which included a pledge to increase the amount of ODA allocated to Africa by $25 billion a year by 2010, more than doubling aid to Africa compared to 2004. Since then, donors’ progress toward fulfilling their commitments has been modest. Helping Africa to develop will be a key focus of the June 2007 G-8 Leaders’ Summit in Heilgendamm, Germany.

The amount of financing actually flowing to developing countries – that is disbursements – is vitally important. Net ODA disbursements from DAC countries were about $3 billion in 2006, following a record $27 billion increase in 2005 (in nominal terms). The decline reflects debt relief returning to more normal levels, following two extraordinary Paris Club agreements in 2005-- Iraq received a record $13.9 billion in debt relief from its Paris Club creditors in 2005 and Nigeria received nearly $11 billion. At Monterrey, donors pledged that debt relief would not displace other components of ODA. Excluding debt relief, ODA fell by 1.8 percent in 2006, compared with a 9.7 percent increase in 2005. Relative to Gross National Income in DAC donor countries, ODA dipped to 0.3 percent in 2006, after reaching 0.33 percent in 2005, and remains well short of the UN target of 0.7 percent.