At a glance
- Germany is the second-largest donor country, spending US$23.8 billion (current prices) on official development assistance (ODA) in 2019. This corresponds to 0.60% of its gross national income (GNI), making it sixth-largest donor relative to the size of its economy.
- According to the Organisation for Economic Co-operation and Development (OECD), Germany’s ODA in 2019 decreased by 5% compared to 2017. This is due to lower in-country refugee costs, which fell from US$6.4 billion to US$3.2 billion. When excluding these expenditures, ODA actually increased by 10%.
- Total ODA is expected to rise, due to Germany’s global COVID-19 response. In June 2020, the German coalition government announced additional ODA-funds worth €1.55 billion (US$1.8 billion) for 2020 and another €1.55 billion (US$1.8 billion) for 2021, to be spent on global health measures, humanitarian assistance, and overall development cooperation. Both German Development Minister Gerd Müller and several Members of Parliament announced that Germany is likely to reach its O,7% ODA/GNI target in 2020.
- Germany frames its development policy under an overarching narrative of “fighting the root causes of displacement”, with a focus on the Middle-East and North Africa (MENA).
- During its Group of 20 (G20) presidency in 2017, Germany demonstrated strong leadership on global health by including health on the G20 agenda for the first time.
- Thematically, Germany’s development policy is expected to maintain its focus on migration, forced displacement, food security, and climate protection. It is also likely going to continue targeting Africa and the MENA region.
- Germany holds the Presidency of the EU Council in the second half of 2020. Apart from focusing on the COVID-19 pandemic, Germany’s priorities are: 1) climate protection, 2) digitalization, and 3) global responsibility (predominantly around cooperation with Africa and China).
- The Federal Ministry for Economic Cooperation and Development (BMZ) puts a special emphasis on fair and sustainable supply chains during Germany’s EU Council Presidency.
- In October 2020, the German Cabinet adopted a new cross-ministerial global health strategy for 2020-2030, which defines Germany’s strategic priorities in Global Health for the next 10 years. These include health system strengthening, pandemic prevention, and driving forward research on global health, among others. The strategy also puts a great emphasis on strengthening the multilateral global health architecture.
Germany is the second-largest DAC donor and plans to hold its ODA quota in 2019
According to data from the Organisation for Economic Co-operation and Development (OECD), Germany’s total ODA was US$23.8 billion in 2019 (current prices), making it the second-largest donor country, after the United States (US). This corresponds to 0.60% of Germany’s gross national income (GNI), making it the sixth-largest donor in relative terms.
Germany’s ODA in 2019 decreased by 1% compared to 2018, from US$24.9 billion to US$24.6 billion (2018 constant prices). The decline in ODA in 2019 is explained primarily by a decrease in spending on refugees in Germany (refugee costs fell from US$3.9 billion in 2018 to US$3.2 billion in 2019, a decrease of 16%). Germany does not offset refugee costs with cutbacks in funding for global development, instead, refugee costs are considered separate and additional to budgeted funding for development. Funds for in-country refugees come mainly from Germany’s federal states. In 2018, the Federal Ministry of Finance started excluding these costs when communicating ODA/GNI projections.
The budget of the Federal Ministry for Economic Cooperation and Development (BMZ; 41% of total ODA, 2018, latest year for which ODA-breakdown by ministry data is available) has increased significantly over the past four years. It has grown by 93% since 2014 and stands at €12.4 billion (US$14.7 billion) in 2020. While originally set at €10.9 billion (US$12.8 billion) in 2020, the BMZ’s budget has seen an increase of €1.55 billion (US$1.8 billion) for its global COVID-19 response program through the second supplementary budget in July 2020. Similarly, the BMZ budget for 2021, which was originally planned to stand at €10.9 billion (US$12.8 billion), is set to increase to a total of €12.4 billion (US$14.7 billion), according to the 2021 budget draft. Through this, the German government fullfills its promise to channel an additional €1.55 billion to the BMZ COVID-19 response program in 2021, as already announced in June 2020.
Unless otherwise indicated, all data in this section is based on the grant-equivalent measurement system. For more information, see our Donor Tracker Codebook.
Development cooperation focuses on displacement and migration, climate change, agriculture, and food security
The government’s coalition treaty (for 2017 to 2021) lists the following development priorities: 1) Fair trade, 2) Marshall Plan with Africa, 3) Gender equality and education, 4) Social and health systems, 5) Poverty eradication, 6) Climate change mitigation and adaptation, and 7) Fighting the root causes of flight and migration. Building on those, the Federal Ministry for Economic Cooperation and Development (BMZ) highlighted its three priority areas for the current legislative term (2017 to 2021): 1) Displacement and migration, 2) Climate change, and 3) Agriculture and food security (for more information, see box).
Germany’s key development priorities:
- Flight and migration, through the special initiative ‘Tackling root causes of displacement, stabilizing host regions, supporting refugees’, BMZ plans to spend €505 million (US$596 million) on this issue in 2020.
- Climate change and renewable energy, with a pledge of €1.5 billion (US$1.8 billion) to the Green Climate Fund (2020 to 2023).
- Agriculture and food security, with investments of over €1.5 billion (US$1.8 billion) per year, e.g., through BMZ’s special initiative ‘ONE WORLD - No Hunger’.
In May 2020, BMZ published a new strategy document ‘Reformkonzept BMZ 2030,’ which aims to fundamentally reform German development policy, to make it more strategic, impactful, and efficient. According to ‘BMZ 2030’, BMZ plans to concentrate its efforts on five key areas, which are supposed to be the ‘DNA of the BMZ’ and which should last beyond legislative periods. Development cooperation in these areas is supposed to take place both multilaterally and bilaterally. Going forward, these focus areas also set the thematic focus for BMZ’s collaboration with partner countries and will replace existing priority areas of bilateral cooperation. In addition to these core areas, BMZ plans to work on ten ‘initiative themes’, which will receive special attention for selected periods of time, depending on needs. They include global health, pandemic preparedness and One Health, family planning, and digitalization.
Key focus areas and respective action areas (BMZ 2030)
Peace and societal cohesion
- Good governance
- Peace and crisis prevention
- Flight and migration
ONE WORLD - No Hunger
- Food security
- Rural development
Vocational training, jobs
- Vocational training
- Privat sector, finance system development
- Trade and economic infrastructure
- Climate protection, climate adaptation
- Renewable energy, energy efficiency
- Sustainable urban development
Environmental protection and natural resources
- Forest protection
In addition to these core areas, BMZ plans to work on ten ‘initiative themes’, which will receive special attention for selected periods of time, depending on needs. They include global health, pandemic preparedness and One Health, family planning, and digitalization.
Through its G7 and G20 presidencies, in 2015 and 2017 respectively, Germany strengthened its focus on global health, climate and sustainability, women’s empowerment, financial inclusion, and its relationship with the African continent. During the G20 presidency, health ministers held their first high-level G20 meeting with a focus on anti-microbial resistance (AMR) and pandemic preparedness. Discussions around AMR resulted in the planning and launch of a G20 AMR research and development (R&D) Collaboration Hub, based in Berlin. In February 2019, the Global Health Hub Germany was launched with the aim of serving as an independent and interdisciplinary exchange and networking platform.
In October 2020, the German Federal Cabinet adopted a new cross-ministerial global health strategy for 2020-2030, titled ’Responsibility – Innovation – Partnership: Shaping global health together’ to serve as the basis for Germany’s engagement in global health and to ensure Germany’s contribution to the Sustainable Development Goal 3 (SDG: “Ensure healthy lives and promote wellbeing for all at all ages”). (See Sector: ‘Global health’ for more details.)
Since 2014, BMZ’s increasing budget has been channeled through ‘special initiatives’, which are programs spearheaded by the development minister. In the 2017 to 2021 legislative period, three special initiatives are prioritized: ‘tackling the root causes of displacement, reintegrating refugees’, ‘stability and development in the MENA region’, and ‘ONE WORLD – No Hunger’. In addition, in 2018 another special initiative on ‘vocational training and jobs’ was launched.
The German government is engaged in a new approach to development in Africa focused on fostering private investment and good governance across the continent and is advocating for a concerted EU-Africa Policy at the EU level. In 2017, the Development Minister presented a ‘Marshall Plan with Africa’ laying out initiatives to improve economic and social development. The plan suggests that countries willing to implement reforms would benefit from increased ODA and German support for private investment. To date, Germany has ‘reform partnerships’ based on this principle with six countries: Tunisia, Ghana, Ivory Coast, Ethiopia, Morocco, and Senegal. These reform partnerships serve as Germany’s bilateral contribution to ‘Compacts with Africa’, a G20 initiative which was developed by the German Ministry of Finance and launched during Germany’s G20 presidency in 2017. ‘Compacts with Africa’ brings together African countries, bilateral partners from the G20, and international organizations to work on country-specific agendas to increase investment opportunities to private investors. Under ‘BMZ 2030’, BMZ plans to put an even larger focus on reform partnerships.
Germany channels the majority of its ODA bilaterally
The German government has a strong preference for bilateral funding. In 2018, bilateral funding stood at 78% of total ODA (DAC average: 59%). This includes earmarked funding to multilateral organizations (13%), which is reported as bilateral ODA. Germany’s preference for bilateral funding is driven by its two large government-owned implementing agencies, GIZ and the KfW Development Bank. Germany channels only small shares of its bilateral ODA through non-governmental organizations (NGOs) (7%, DAC average: 18%) and through multilateral organizations (17%, DAC average: 23%).
Most bilateral funding is directed to hosting refugees in Germany and humanitarian assistance
In response to the influx of refugees to Germany since 2015, spending on ‘humanitarian aid’ and migration has increased significantly. In 2018, most bilateral funding was directed toward hosting refugees in Germany (17% of total bilateral aid in 2018) despite a 40% decrease in volume compared to 2017. Humanitarian aid (12%, down 6% compared to 2017) and education (11%, up 13% since 2017) received the second and third largest share of Germany’s ODA. However, more than half of Germany’s education ODA (US$1.4 billion, 56%) represents costs for students from partner countries studying in Germany.
Health (4%) and agriculture and rural development (4%) receive relatively small shares of bilateral ODA. Funding for both sectors is supported through Germany’s contributions to multilateral organizations (For more information, see the Sectors: ‘Global Health’ and ‘Agriculture’ for Germany).
Germany channels the largest share of its bilateral ODA as grants (76% in 2018, DAC average: 91%). The remaining component of Germany’s bilateral ODA, disbursed as loans and equity investments, stood at 24% in 2018 (down from a peak of 35% in 2014).
Bilateral ODA is expected to shift towards fragile and conflict-affected areas
A large share of Germany’s bilateral ODA is not allocated by region (31% in 2018) or income group (42% in 2018). This is partly due to the high share of costs of hosting refugees in Germany. For this reason, the following analyses exclude such funding to avoid misrepresentation of trends in key recipients of Germany’s ODA.
Germany allocates the largest share of its bilateral ODA to Asia (30% in 2018) and the Middle East and North Africa (MENA) region (25% in 2018). Funding to sub-Saharan Africa accounts for one fifth (20% in 2018). When only looking at ODA in the form of grants, the largest individual country recipients are Syria, Iraq, and Afghanistan. Given the German government’s increasing focus on fighting the root causes of migration in the Middle East, North Africa, and sub-Saharan Africa, larger portions of its ODA will likely go to these regions in the coming years.
The portion of bilateral ODA going to low-income countries (LICs) is relatively low (25% between 2016-2018). It is also below Germany’s ambition to spend between 0.15% and 0.20% of GNI as ODA on LICs, which was affirmed by the 2017 to 2021 coalition treaty.
Germany channels 76% of its bilateral ODA to middle-income countries (MICs). Indonesia, India, and China are the largest individual country recipients. Most funding to Indonesia (89%) and more than half of the funding to India (67%) is provided in the form of loans or equity investments. The majority of grants to China and India are made up of costs for students from those countries enrolled in German universities. (For more information, see the Sector: ‘Education’ for Germany.) The Federal Ministry for Economic Development and Cooperation (BMZ) has not made any new bilateral commitments to China since 2010 and plans to phase out bilateral funding to China completely.
In May 2020, Development Minister Gerd Müller presented a new strategy for German development cooperation which significantly reduces the number of Germany’s bilateral partner countries. The so-called ‘BMZ 2030’ strategy represents the most fundamental reform in 12 years. Currently, Germany cooperates with around 85 countries, providing direct bilateral funding through the German development agency, GIZ, and the KfW Development Bank. With the new strategy, Germany will reduce its partnerships from around 85 to 60. Future bilateral development cooperation will be concentrated on fewer countries that are willing to implement targeted reforms regarding good governance, human rights protection, and fighting corruption. For partners, where BMZ bilateral cooperation will be terminated, funding will be intensified via multilateral and civil society channels. Amongst the strategy’s key focus areas are agriculture, food security, and climate protection.
Only 22% of Germany’s ODA is channeled multilaterally; however, earmarked funding to multilaterals has increased
Until 2013, the German Parliament had capped multilateral spending at one-third of total German ODA. Even though this cap no longer exists, core funding to multilaterals remains low at only 22% of total ODA (DAC average: 41%). In 2018, the largest recipients of Germany’s core funding to multilaterals were the institutions of the European Union (53%), the World Bank (17%), other multilateral institutions including the Global Fund to Fight Aids, Tuberculosis and Malaria (Global Fund), Gavi, the Vaccine Alliance (14%), United Nations (UN) agencies (9%), and regional development banks (7%).
Earmarked funding to multilaterals, which is funding channeled through multilateral development organizations for use in a specific sector or country (reported as bilateral ODA), has increased significantly in recent years, from US$1.2 billion in 2015 (6% of ODA) to US$3.8 billion in 2018 (13% of ODA). Growth has largely been driven by funding to humanitarian assistance and crisis response.
Unless otherwise indicated, all data in this section is based on the cash-flow basis measurement system. For more information, see our Donor Tracker Codebook.
The Development Ministry steers strategy; two development agencies execute
Germany is governed by a renewed ‘Grand Coalition’ made up of Chancellor Angela Merkel’s center-right Christian Democratic Union (CDU), its Bavarian sister party, the Christian Social Union (CSU), and the center-left Social Democrats (SPD). Under the overall guidance of the Chancellery, which is responsible for determining policy guidelines, the Federal Ministry for Economic Cooperation and Development (BMZ) sets development priorities. BMZ has been led by Development Minister Gerd Müller (CSU) since 2013.
BMZ is organized across six directorates-general. The regional subdivisions allocate Germany’s bilateral development assistance according to BMZ’s strategy and priorities. Sectoral subdivisions formulate Germany’s sector strategies, interface with multilateral development institutions, and advise on bilateral programs.
Programming of bilateral funding to partner countries is guided by regional strategies, which are developed by BMZ’s regional divisions. Country strategies — developed for all priority countries — reflect the regional strategies and are created by country desk officers in cooperation with embassies, Germany’s state-owned development agency (GIZ), and its state-owned development bank (KfW). Bilateral cooperation with countries that are not classified as priority partners is based solely on the applicable regional strategy.
Germany’s two major state-owned development agencies, GIZ and KfW operate under the political supervision of BMZ. Both play key roles in policy development, priority setting, and implementation.
- GIZ plans and executes Germany’s technical cooperation with partner countries. GIZ also provides consulting services to BMZ’s sectoral divisions through its ‘sector initiatives’ (‘Sektorvorhaben’).
- KfW Development Bank leads on Germany’s bilateral financial cooperation with partner countries. It receives funding from BMZ and raises own funds on capital markets using KfW’s own resources.
The Federal Ministry of Finance (BMF), led by Minister Olaf Scholz (SPD), develops caps for the federal budget and individual ministerial budgets. This makes it an important stakeholder when it comes to overall ODA levels, BMZ’s budget, and long-term ODA contributions.
Other ministries have significant influence on the strategic direction and funding allocation in some development sectors. For example, the Federal Foreign Office (AA) leads on humanitarian assistance and crisis prevention. The Federal Ministry of Health (BMG) is developing a new, government-wide strategy for global health and is responsible for the majority of funding of the World Health Organization (WHO).
GERMANY'S DEVELOPMENT COOPERATION SYSTEM
Parliament: The role of the German Parliament (Bundestag) is to scrutinize development policymaking, resource allocation, and implementation, mainly through its Committee on Economic Cooperation and Development (AWZ). The AWZ may also suggest changes to funding allocations in the government’s draft budget. However, it is the Budget Committee which makes final budget decisions and is thus a key stakeholder when it comes to modifying funding allocations.
Civil Society: Civil society interacts in several ways with government and Parliament including via petitions and conferences. Civil society organizations (CSOs) are frequently invited to parliamentary hearings and government consultations. Many CSOs implement their own in-country programs and are funded by the German government (mainly by BMZ and the Foreign Office). About 120 development and humanitarian assistance-related civil society organizations coordinate their activities through the Association of German Development CSOs VENRO. Another important association is the Forum Umwelt und Entwicklung, which coordinates advocacy work for sustainable development and humanitarian assistance.
BMZ manages largest share of Germany’s ODA
Germany’s ODA is sourced from the budgets of fifteen ministries. The largest share of ODA comes from the Federal Ministry for Economic Cooperation and Development (BMZ) (41% in 2018, latest year for which total ODA data is available from the ministry). Its share is expected to increase again as refugee costs decrease. BMZ’s budget for 2020 stands at €12.4 billion (US$14.7 billion),including the top-up of €1.55 billion (US$1.8 billion) due to COVID-19. This is a 21% increase from 2019 (US$12.1 billion).
On September 23, 2020, the German Cabinet adopted the government draft bill for the federal budget 2021, as well as the midterm financial plan until 2024. The federal budget is set to stand at €413.4 billion (US$487.9 billion) in 2021. According to the budget draft, the BMZ’s budget will remain stable at €12.4 billion (US$14.7 billion) and includes the €1.55 billion (US$1.8 billion) funding increases for BMZ’s COVID-19 response program, approved in June 2020. According to the midterm financial plan, funding for the BMZ will decrease over the coming years, to €9.4 billion (US$11.1 billion) in 2022 and €9.3 billion (US$11 billion) in 2023 and 2024. This means that the BMZ’s budget is set to drop below the 2020 pre-COVID-19 levels of €10.9 billion (US$12.9 billion); however, since the midterm financial plan has been equally conservative over the past years, with actual increases occuring in the respective budget year, these cuts are subject to change. The 2021 budget draft is currently being discussed in Parliament and will be amended and finalized by December 2020.
BMZ’s budget (see table) is composed of different budget envelopes, including:
- ‘Bilateral development cooperation’, which contains budget lines for major regions and is further broken down by annual allocations to specific country programs.
- The ‘European development cooperation, United Nations (UN), and other international organizations’ envelope includes budget lines for multilateral organizations related to climate change and biodiversity, most of the global health multilaterals, as well as for various UN programs.
- The ‘Multilateral development banks’ envelope includes contributions to the World Bank Group, as well as the African Development Bank and Asian Development Bank.
Other ministries responsible for managing ODA include the Federal Foreign Office (AA), which handles most of the funding for humanitarian assistance and UN peace keeping missions. In 2018, it accounted for 13% of ODA overall. Another 10% of Germany’s ODA was raised by Germany’s development bank (KfW) on capital markets.
Overview: 2021 BMZ Budget Draft
|European Development Fund||823||971|
|Multilateral organizations related to climate change and biodiversity||716||845|
|The Global Fund to Fight AIDS, Tuberculosis and Malaria||350||413|
|World Food Programme||28||33|
|The Global Agriculture and Food Security Program||35||41|
|International Fund for Agricultural Development||22||26|
|World Bank Group||552||651|
|African Development Bank||215||254|
|Asian Development Bank||35||41|
|Inter-American Development Bank||5||6|
|Cooperation w/ CSOs, private sector & others||1,379||1,627|
|Other commitments (incl. special initiatives)||1,326||1,565|
|International efforts to fight climate change||80||94|
|ONE WORLD – No Hunger||525||620|
|Tackling roots causes of displacement||475||561|
|Stability and Development in the MENA region||63||74|
|Vocational training and jobs||180||212|
|Research, evaluation, and qualification in development cooperation||53||63|
|Administrative and personnel expenses||1||1|
Major ODA increases or changes are confirmed early in the year; Parliament debates the budget between September and November
The fiscal year (FY) runs from January to December. The chart depicts the normal budget decision-making process, however, the 2020 budgetary decision-making process has been impacted by the COVID-19 crisis and will proceed as follows:
- February/March: Cabinet agrees on caps for federal and ministerial budgets. In March 2020, the Federal Ministry of Finance published caps for the federal budget and individual ministerial budgets. At this point, decisions on increases in ODA and the overall funding allocation were taken. A key stakeholder during this period is the Finance Minister.The Development Ministry provides input. Major funding decisions are budgeted at this time of the year.
- April-September: Negotiations within ministries. This year, the federal ministries got more time than usual to develop their budgets and submit them to the Ministry of Finance. The budget negotiations between the ministries and the Ministry of Finance were concluded at the beginning of September. Allocations to individual international organizations are determined during this period. In parallel, between April and September, the Federal Ministry for Economic Cooperation and Development (BMZ) plans its bilateral spending and multilateral funding envelopes. Usually, ministries develop their budgets in April.
- Mid-September: Draft budget and medium-term financial planning. This year, the Cabinet negotiated the budget and published the government’s budget draft at the end of September. Key players in this period are the Chancellery, the Finance Ministry, and the Development Ministry. Usually, the publication of the government’s budget draft takes place in June, right before the summer break.
- End of September/Beginning of October: Parliamentary debates and proposed amendments. Due to the impacts of COVID-19, this process will be shortened.This year, the first reading in Parliament took place at the end of September. Parliament will debate the budget until mid-November. Usually, the process takes place between September and November.
- October/November: Amendments reviewed and recommendations to committees. This year, the Development Committee (AWZ) will make recommendations on budget amendments in October. In November, BMZ’s budget will be debated by the Development Committee and Budget Committee. This phase usually takes place in September/October.
- November: Amendments, decisions on each ministerial budget, and voting. This year, the Budget Committee will take final decisions at the end of November which makes members of the Budget Committee (especially those of the government coalition parties) central stakeholders during this phase. Usually, the Budget Committee takes these decisions at the beginning of November.
- December: The final budget draft is voted on in plenary and signed by the President