- Norway is the tenth-largest donor country in the Organisation for Economic Co-operation and Development (OECD), spending US$4.1 billion on net official development assistance (ODA) in 2017. This corresponds to 0.99% of its gross national income (GNI), making Norway the third-largest donor in proportion to its economic size after Sweden and the Luxembourg. There is a cross-party consensus to maintain ODA at around 1% of GNI.
- Net ODA decreased by 10% between 2016 and 2017, a result of a drop in costs of hosting refugees in Norway. When excluding these costs, net ODA increased by 6%. Costs associated with hosting refugees are set at 1% of total ODA budget for 2019, well below levels reached in previous years (2016: 18%).
- The government’s 2019 ODA budget stands at US$4.6 billion (NOK37.8 billion), an 8% increase over 2018, and the largest to date.
- The Sustainable Development Goals (SDGs) are a ‘North Star’ for the government, and form the basis of the government’s development policy. To engage effectively with the Norwegian government, it is thus important to frame suggestions within the SDG framework.
- In a 2017 white paper, the government spells out five sectoral priorities: 1) education, with a focus on girls, 2) global health, 3) private-sector development and job creation, 4) climate, renewable energy, and environment; and 5) humanitarian assistance.
- The government identifies four cross-cutting issues for its development policy: 1) human rights, 2) women’s rights and gender equality, 3) climate change and the environment, and 4) the fight against corruption. Among those, gender equality is a top focus.
- Driven by Norway’s economic growth, the ODA budget is likely to continue increasing in volume if the 1%-to-GNI target holds. Despite cross-party backing, an increasing number of voices publicly raised concern over the 1%-of-GNI target in the second half of 2018,, arguing that focus should be on effectiveness and efficiency rather than tied to a specific amount size of funds.
- Thematic priorities are likely to remain unchanged, as the government of Prime Minister Solberg was re-elected in the fall of 2017. In power since 2013, Solberg will continue to head a coalition composed of her Conservative Party and the Progress Party, joined by the Liberal Party and the Christian Democratic Party in 2018 and 2019.
- Norway focuses increasingly on private-sector development in partner countries, especially where access to capital is scarce. Norfund, a state-owned investment fund that supports the building of sustainable businesses in partner countries, receives government funding that has increased in recent years.
the big six
- How much ODA does Norway provide?
Norway is committed to continue spending 1% of its GNI on ODA
Norway is the third-largest donor in relation to the size of its economy among members of the OECD Development Assistance Committee (DAC). In 2017 (latest year for which OECD data is available), it spent 0.99% of its GNI on development cooperation, or US$4.1 billion. In absolute terms, this makes Norway the 10th-largest DAC donor. Norway has reached the United Nations (UN) 0.7% ODA-to-GNI target since 1976 and is committed to maintain spending at about 1% of its GNI. It has met this commitment since 2013. While the commitment receives cross-party backing, an increasing number of voices, including former diplomats, publicly raised concern over the 1% ODA-to-GNI target in the second half of 2018, arguing that the focus should be on effectiveness and efficiency rather than tied to a specific amount of funds.
Net ODA decreased by 10% between 2016 and 2017, a result of a drop in costs of hosting refugees in Norway, some of which are ODA-eligible. When excluding these costs, net ODA increased by 6%. Costs of hosting refugees made up 11% and 18% of total ODA in 2015 and 2016 respectively. They have impacted development funding in two major ways: funds were reallocated from development programs to cover these costs, and reported ODA increased, driven by additional refugee-related costs outside of the ODA budget. As a result of a more restrictive national refugee policy since early 2016 – and of tighter border control in Europe – these costs decreased to 4% of ODA in 2017, and are expected to remain at low levels looking forward. In 2019, they are set at NOK550 million (US$67 million, or 1% of total ODA budget).
Driven by Norway’s economic growth, ODA is likely to continue increasing in the coming years. The budget for 2019 is the largest to date, with ODA set at US$4.6 billion (NOK37.8 billion), a projected 1% of its GNI. This represents a 8% increase from 2018. Additional funding will target the country’s five main thematic priorities: 1) education, 2) global health, 3) private-sector development and job creation, 4) climate, renewable energy, environment; and 5) humanitarian assistance.
- What are Norway’s priorities for global development?
Humanitarian assistance, education and global health are among top priorities
The Norwegian government has closely aligned its development policy with the UN’s Sustainable Development Goals (SDGs), ensuring alignment with global priorities.
Priorities of Norway’s development policy are spelled out in the Ministry of Foreign Affairs’ (MFA’s) white paper, ‘Common responsibility for a common future – the Sustainable Development Goals and Norwegian Development Policy’ (2016-2017). They include:
- Global health
- Humanitarian assistance
- Private-sector development and job creation
- Climate, renewable energy and the environment.
These priorities are also reflected in the 2019 budget (see box), and additional funding since 2017 is mainly directed towards these areas. In the 2019 budget, two priority areas have been reshuffled: ‘private-sector development and job creation’ became ‘private-sector development, agriculture, and renewable energy’; and ‘climate, renewable energy, and the environment became ‘climate, environment, and the ocean’.
Norway’s development priorities in 2019:
- Education: Focus is on girls’ education. Norway fulfilled its commitment to double spending between 2013 and 2017, reaching NOK3.4 billion (US$411 million) in 2017.
- Global health: Global health is a long-standing priority of the Norwegian government, which plans on sustaining high levels of funding to the sector until 2030. Focus is on women’s and children’s health, and on fighting AIDS, tuberculosis, and malaria.
- Humanitarian assistance: Norway’s funding for humanitarian assistance is steadily increasing. A record NOK5.4 billion (US$652 million) is budgeted for humanitarian assistance for 2019, accounting for 14% of Norway’s total ODA budget.
- Private-sector development, agriculture and renewable energy: support to the private sector in low-income countries has been an increasing focus, included through Norfund.
- Climate, environment and oceans: Norway strongly supports multilateral working in the field, with a focus on the Green Climate Fund and the Global Environment Facility (GEF). Since 2007 Norway has contributed close to NOK3 billion annually in efforts to fight deforestation (US$360 million).
Since 2013, the successive governments of Prime Minister (PM) Erna Solberg have placed a focus on education, and particularly on girls’ education. Between 2013 and 2017, funding to the sector doubled, going from NOK1.7 billion (US$206 million) to NOK3.4 billion (US$411 million), according to the government. The government plans on continuing to increase its funding to the sector, with spending levels at NOK3.8 million in the 2019 budget (US$460 million). Norway provides strong support to the Global Partnership for Education (GPE): It committed NOK2.07 billion (US$276 million) for 2018 to 2020, the third-largest pledge by any donor.
Humanitarian assistance is another growing focus area, and the most largely funded in 2019, at a record-high NOK5.4 billion (US$652 million). The government’s 2018 humanitarian strategy emphasizes the connection between long-term development assistance and emergency humanitarian activities. It promotes an integrated and rights-based approach, and highlights the need for innovation and reform in the humanitarian sector, as well as promotes effective, flexible, and predictable funding for humanitarian efforts. Norway's pledges in the humanitarian sphere include, among others, a NOK10 billion (around US$1.2 billion) allocation for Syria and its neighboring countries for 2016 to 2020, and NOK1.68 billion (US$203 million) for the CERF (2018 to 2022).
Education is the flagship priority of the government, and global health is a traditional focus
Global health is a traditional focus for Norway, continued under the government of Prime Minister Erna Solberg. The bulk of financing to the sector is channeled through multilateral organizations: in 2016 (the latest year for which complete health ODA data is available), Norway channeled 59% of its health ODA as core contributions to multilateral organizations and 23% as earmarked funding to multilaterals. Major recipients include the Gavi, the Vaccine Alliance (Gavi), the Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund), and the Global Financing Facility (GFF). Pledges to major global health initiatives include US$360 million for the GFF (2019 to 2023), US$304 million to the Global Fund for 2017 to 2019. Norway hosted the GFF replenishment conference in Oslo in November 2018, reaffirming its leadership in the global health space. Total funding levels for global health are set at NOK4.8 million for 2019 (US$580 million) according to the government.
- Who are the main actors in Norwegian development cooperation?
MFA steers strategy and established a Minister of International Development post in 2018; embassies execute bilateral programs
Norway’s coalition government is led by Prime Minister (PM) Erna Solberg. The Conservative Party (H) of Solberg and the Progress Party (FrP), both in power since 2013, were re-elected in October 2017. The Liberal Party (V) joined the coalition in January 2018, and the Christian Democratic Party (KrF) joined in January 2019, after a year of cooperation with the government on an ad-hoc basis.
The Ministry for Foreign Affairs (MFA) is responsible for setting the strategic direction of development cooperation. Since October 2017 it has been led by former Minister of Defense Ine Eriksen Søreide (H). In January 2018, the minister of the European Economic Area and EU affairs within the MFA was replaced with a minister of international development, who is a co-minister to the minister of foreign affairs. Dag-Inge Ulstein (KrF) has held this position since January 2019, following the KrF joining the governing coalition. Ulstein is thus in charge of development policy. His state secretary is Aksel Jakobsen (KrF).
NORWAY'S DEVELOPMENT COOPERATION SYSTEM
The MFA and Norway’s embassies administer the majority of development assistance. The MFA has more than 500 staff members working on development cooperation, half of whom are based in Norway’s embassies overseas. The minister of international development is responsible for managing relations with the UN system, the World Bank, regional development banks, and other global funds and programs. This minister also oversees Norad and Norfund and is supported by a range of departments within the MFA. The Department for Regional Affairs manages bilateral development cooperation (see below). The Department for Economic Relations and Development is in charge of development policies, climate and the environment, and multilateral development banks. The Department for UN and Humanitarian Affairs is responsible for cooperation with UN agencies, humanitarian affairs, and global initiatives.
Other relevant ministries include the Ministry of Climate and Environment, which manages the budget for the Norwegian International Climate and Forest Initiative (NICFI), the Ministry of Justice, which manages budget lines for costs related to hosting refugees in Norway, which are partly reported as ODA, and the Ministry of Education and Research.
The government created a new post of minister for international development in January 2018
Norwegian embassies lead programming of bilateral cooperation in partner countries, on the basis of the priorities outlined in the MFA’s annual appropriation letters. Leadership and program officers in Norwegian embassies, and regional sections within the MFA’s Department for Regional Affairs and Development play a key role in developing these letters. Within these priorities, embassies have ample financial and programming authority. They develop annual work plans and agreements for bilateral programs, which are then reviewed by Norad.
Norad, the Norwegian Agency for Development Cooperation, and Norfund, Norway’s development finance institution, play key roles in policy development, priority setting, and implementation. Both agencies operate under the supervision of the MFA.
- Norad is responsible for providing advice and quality assurance to the MFA and embassies. It provides technical advice on the planning and implementation of bilateral programs, conducts evaluations, and manages funds based on the strategic directions outlined in its appropriation letter from the MFA. Norad has a staff count of 230 and is led by Director Jon Lomøy. It has no country offices.
- Norfund is a state-owned investment fund. Established in 1997, it supports private-sector activities in developing countries and focuses on renewable energy, agribusiness, and financial institutions. In 2017, Norfund was managing investments worth over NOK20.4 billion (US$2.5 billion) with a staff count of 71 employees.
Parliament: Within the Norwegian Parliament, the Committee of Foreign Affairs and Defense is in charge of development policy. Its main role is to scrutinize government and prepare recommendations on draft legislation. It comments and votes on the government’s ‘white papers’, which outline strategies regarding development and the MFA’s budget. The Committee on Finance and Economic Affairs is the most relevant to budget development, including for ODA. Usually, Parliament only passes minor amendments to government drafts.
Civil Society: Norwegian CSOs and faith-based organizations play an important role in development policy. Domestically, Norwegian CSOs educate the public about development issues, act as watchdogs by critically assessing development policy, and carry out lobbying activities targeted at Parliament and the government. CSOs also implement development projects, partly with government funds : Norway channels 27% of its ODA through CSOs. In total, 50 CSOs coordinate their advocacy and research work within the umbrella association, Forum for Utvikling og Miljø (Forum for Development and Environment; ForUM).
- How is the Norwegian ODA budget structured?
Norway uses ’thematic cooperation’ budget lines to pursue its strategic priorities
The 2019 ODA budget is the largest to date, at NOK37.8 billion (US$4.6 billion). The government’s budget proposal, which was approved in November 2018 by Parliament, represents an 8% increase over the 2018 budget (an increase of NOK2.7 billion, or US$326 million.) ODA comes from two main sources: the Ministry of Foreign Affairs (MFA) and the Ministry of Climate and Environment.
2019 ODA budget
Ministry of Foreign Affairs 34,561 4,179 Thematic cooperation 25,790 3,118 Humanitarian assistance 5,397 652 Industrial development, agriculture and renewable energy 4,806 581 Health 3,926 475 Education, research and professional cooperation 3,808 460 Civil Society 2,128 257 Peace, security, and global cooperation 1,993 241 Climate, environment and sea 1,480 179 Equality 1,002 121 Human rights 700 85 Costs of refugees in Norway 550 67 Bilateral cooperation 2,924 354 MENA region 448 54 Europe and Central Aisa 676 82 Afghanistan 575 69 Africa 1,016 123 Asia 80 10 Latin America 130 16 Multilateral funding 3,593 434 UN development agencies 1,322 160 Multilateral financial institutions 2,110 255 Funding for AIIB 162 20 Administration costs 2,255 273 Ministry of Climate and Environment 3,161 382 Ministry of Finance 78 9 Ministry of Education and Research 16 2 Total ODA Budget 37,816 4,572
The MFA provides 92% (NOK34.6 billion, or US$4.1 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: 1) thematic cooperation, 2) bilateral cooperation, 3) multilateral funding (outside of specific thematic cooperation), and 4) administration costs:
- Bilateral cooperation comprises regional budget lines for Africa, Asia, Middle East and North Africa (MENA region), and Latin America.
- Multilateral funding includes spending not connected to a specific thematic area, and funds disbursed to UN development agencies and certain international financial institutions. Funding for the Asian Infrastructure Investment Bank (AIIB; NOK162 million or US$20 million in 2019) is disbursed by the MFA, but sits outside of the official ‘multilateral spending’ envelope.
- Thematic cooperation combines bilateral and multilateral funding to advance specific areas. It receives by far the largest share of funding by the MFA, 68% of all Norway's ODA expenditure in 2019. There are currently 10 thematic budget lines in Norway’s ODA budget. Those that receive the most funding are in line with Norway’s strategic priorities (see table).
In addition to the MFA, the Ministry of Climate and Environment provides NOK3.2 billion (US$382 million) in ODA, mainly for Norway’s International Climate and Forest Initiative (NICFI). The initiative aims to slow, halt, and eventually reduce greenhouse-gas emissions from deforestation and forest degradation in partner countries.
- What are important milestones in Norway’s annual budget process?
Indicative ministerial budget ceiling is set in March; budget details are determined from April to August
The Norwegian budget process runs over a two-year period: preparatory work starts about a year before the actual fiscal year, and the ongoing budget may be amended in the spring and in the autumn.
- Ministries prepare initial internal budget drafts: From November to the end of January, Norway’s development agency Norad and Norwegian embassies prepare budget input to submit to the relevant ministries, which in turn start their preparations for developing their budget for the following year. Budget suggestions by the ministries are due by January 25 each year. Key stakeholders during this period are senior staff at the Norwegian embassies, Norad, and Ministry for Foreign Affairs (MFA)’s senior officials.
- First budget conference – government decides on indicative ministerial budget ceilings: By March, Norwegian embassies and Norad have prepared their preliminary internal budgets. MFA and Norad leadership ultimately make decisions on budget allocations. In parallel, embassies start identifying bilateral projects for the coming year. Ministerial budget proposals are presented to the government at its first budget conference around March 10, on the basis of which the government sets indicative budget ceilings for each ministry. Budget ceilingse are handed out around March 20.
- The MFA further refines internal budgets: Once the government has set the MFA’s indicative spending, the MFA further develops its budget from April to July/August.
- Second budget conference – government makes final decision on overall draft budget: Usually in late August/September, the government holds its second budget conference to agree on final ministerial budget caps and political priorities. At this stage, the government approves the overall ODA volume and funding for major initiatives; it usually does not debate further details of the ODA budget.
- The government presents its budget proposal to Parliament: Around September 20, the government approves its ‘Yellow Book’, its first budget proposal. In the beginning of October, the budget proposal is presented to Parliament. From October to December, the MFA and the other ministries adapt their budget draft to fit within the final caps.
- Parliament debates draft budget: From October to November, Parliament debates the government’s budget draft. The Standing Committee on Finance and Economic Affairs can amend the proposed ceilings and detailed allocations for main expenditure areas until November. The Standing Committee on Foreign Affairs and Defense may propose amendments, but in practice, the Committee on Finance leads on reallocations between budget lines. The additional proposals need to be presented by November 10.
- Parliament approves budget: By mid-December, the Parliament signs off on the budget for the upcoming year.
- How does Norway spend its ODA?
Norway heavily relies on multilateral organizations and CSOs to channel its ODA
Norway is a strong supporter of multilateral organizations. It channels a quarter (24% in 2017) of its ODA as core contributions to multilateral organizations, significantly below the average among members of the OECD Development Assistance Committee (DAC) of 40%. However, Norway chooses to channel much of its multilateral funding in the form of funding earmarked for specific thematic priorities or regions (reported as bilateral ODA to the OECD). When considering these funds, a total of 54% of Norwegian ODA flows through the multilateral system, slightly above the DAC average of 53%.
Alongside multilaterals, civil society organizations (CSOs) are a key implementer of Norwegian ODA. In 2017, 27% of Norwegian bilateral ODA was channeled through CSOs, well above the DAC average of17%. The remaining share of bilateral ODA was mostly implemented in country programs by Norwegian embassies and the Norwegian Agency for Development Cooperation (Norad).
Norway increasingly focuses on private sector development
Norway’s strategic priorities are reflected in its funding allocations. According to OECD data, in 2017, 17% of bilateral ODA went to humanitarian aid (US$538 million), the largest sector of bilateral ODA. This was followed by environmental protection (US$387 million, or 12%) and education (US$382 million, or 12%). Bilateral funding for humanitarian assistance and education has been steadily increasing since 2012. Global health comes fifth, with US$258 million, or 8% of bilateral ODA. This sector also receives significant multilateral funding (See Sector: Global Health for Norway).
In recent years, private sector development and job creation have become more important to Norway’s development cooperation. This is reflected in increased ODA for financial services and business support (from US$92 million in 2013 to US$210 million in 2017, a 129% increase in real terms, according to OECD data). Much of Norway’s support to economic development goes through Norfund, a state-owned investment fund supporting private-sector activities in partner countries, whose investments are not ODA-eligible.
Since 2014, Norway has provided all its bilateral ODA in the form of grants (as opposed to loans). It does so to reduce the debt burden of low-income countries.
Norway differentiates partners for long-term development cooperation and partners for conflict prevention
Geographically, sub-Saharan Africa receives by far the largest share of bilateral ODA (19% between 2015 and 2017, according to OECD data), followed by the Middle East and North Africa (MENA) region (12%) and Asia (9%). Funding to the MENA region more than doubled between 2013 and 2017 (from US$206 million to US$454 million), driven by increased humanitarian assistance to the region.
According to the Ministry of Foreign Affairs (MFA)’s 2017 white paper on the Sustainable Development Goals (SDGs), Norway focuses its bilateral cooperation on 16 countries. This funding concentration comes from the government’s desire to pursue a holistic and cross-sectoral approach to development in each of its partner countries.
A November 2018 recommendation from Parliament to the government defines the criteria for selecting partner countries. It outlines two categories of partners:
Partners for long-term development cooperation, with which Norway already has a long-standing engagement. These include Ethiopia, Malawi, Mozambique, Nepal, Tanzania, Uganda, Ghana, Myanmar, Indonesia, and Colombia. Overtime, Norway will disburse a significant proportion of its bilateral assistance to this group of countries.
Partners for stabilization and conflict prevention, as Norway aims to reinforce its overall efforts in vulnerable states, with a holistic and long-term perspective. These include Afghanistan, Mali, Niger, Palestine, Somalia, and South Sudan.
In addition, Norway will continue to provide humanitarian assistance to other ODA-eligible countries as needed, including in countries which do not belong to either of the categories above.
Norway differentiates long-term development cooperation partners and conflict-prevention partners
Norway’s ODA mostly goes to low-income countries, although this is not obvious at first look at ODA data. Between 2015 and 2017, due to high costs of hosting refugees in Norway, earmarked funding to multilaterals, and support to CSOs, the share of Norway’s bilateral ODA is not reported as being allocated to a specific country was 56%. This means that low-income countries officially accounted for less than one-quarter of bilateral ODA (22% from 2015 to 2017). However, when only considering bilateral ODA allocated to specific countries, they received just over half (51%) of all bilateral ODA. In addition, Norway’s on-going forestry investment as part of the Norwegian International Climate and Forest Initiative (NICFI) drives high levels of ODA to certain middle-income countries with large rainforests, e.g., Indonesia and Brazil. Between 2015 and 2017, nearly all of Norway’s funding to Brazil – the second-largest beneficiary of Norway’s ODA – was channeled through the NICFI.
For a deeper understanding of funding at the recipient level, please consult data from the International Aid Transparency Initiative (IATI). IATI is a reporting standard and platform on which organizations and governments voluntarily publish data on their development cooperation, including more recent activity than is available through OECD data.
Data can be searched by recipient country, the ‘publisher’ (including funders that do not report to the OECD), and other filters. Click here for more information on IATI’s data. Click here to go directly to IATI’s ‘d-portal’, a user-friendly interface for data searches.
Norway is a strong supporter of the multilateral system
Norway considers funding through multilateral organizations an effective way to pursue its priorities. Norway supports multilateral organizations both through high levels of core contributions (US$998 million in 2017, or 24% of its total ODA), and through significant amounts channeled through multilateral organizations as earmarked funding (US$1,235 million, or 30% of total ODA). This brings the total amount of Norway’s multilateral ODA to US$2.2 billion, or 54% of its total ODA, slightly above the OECD DAC average of 53%. Funding channeled through multilateral institutions has increased by an annual average rate of 7% between 2013 and 2017 (It was US$1.7 billion in 2013). Norway strongly supports the UN system: UN agencies received 42% of Norway’s multilateral ODA in 2017. 12% was channeled through the World Bank, and 10% through regional development banks. Norway strongly support thematic funds, including within Global health initiatives: key partners for Norway’s multilateral ODA include the Global Fund, Gavi, and the Global Financing Facility (GFF).
- ForUm (Norway's CSOs umbrella organization); Website; 2019
- Norwegian MFA; 2019 Budget Proposal; 2018; (in Norwegian)
- Norwegian MFA; Common responsibility for a common future – the Sustainable Development Goals and Norwegian Development Policy’; 2017
- Norwegian MFA; Press release on 2019 ODA budget; 2018
- OECD; Norway Peer Review; 2013