Norway

At a glance

Funding Trends

  • Norway is the ninth-largest donor country, spending US$4.2 billion on official development assistance (ODA) in 2020 (current prices; US$4.7 billion in 2019 constant prices). It is second-largest donor in proportion to the size of its economy: ODA stood at 1.11% of Norway’s gross national income (GNI). There is a cross-party consensus to maintain ODA at around 1% of GNI.
  • ODA went up by 8% between 2019 and 2020, driven by an increase in health-related ODA and contributions to the Green Climate Fund. In 2015 and 2016 in-country refugee costs have strongly impacted Norway’s ODA volume. In the 2021 budget, they stand at 1.0% of total ODA, well below peak levels (2016: 18%).
  • For 2021, the government’s proposal set the ODA budget at NOK37.9 billion (US$4.3 billion in 2019 prices), in line with Norway’s 1%-commitment.

 

 Strategic Priorities

  • The Sustainable Development Goals (SDGs) form the basis of Norway’s development policy. To engage effectively with the Norwegian government, it is thus important to frame suggestions within the SDG framework.
  • In an action plan from 2019, the government spells out five priorities: 1) education; 2) health; 3) private-sector development, agriculture, and renewable development; 4) climate change, the environment, and oceans; 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 these, gender equality is a top focus.
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 Outlook

  • Thematic priorities are likely to remain unchanged for the rest of the current government’s term. In power since 2013, Prime Minister Erna Solberg currently heads a coalition composed of her Conservative Party, the Liberal Party, and the Christian Democratic Party. The next general election is set to be held in September 2021, with a campaign likely to focus on restoring the Norwegian economy after the COVID-19 pandemic.
  • Norway’s commitment to spend 1% of its GNI on development cooperation means that increases in ODA are closely linked to Norway’s economic growth. In May 2020, the government reiterated its intention to uphold this commitment, even in the wake of the COVID-19 crisis. Due to the economic downturn caused by the pandemic, the ODA budget is marginally lower than 2020. If the target is upheld, ODA levels are likely to start growing again, in line with the economy (+3.9% GDP growth projected in 2021 by the IMF).
  • According to the Minister of Foreign Affairs, between half and two thirds of the projected ODA budget for 2021 to 2025 has already been earmarked, due to the government’s many multi-year commitments. This leaves little flexibility within the budget in upcoming years.

Policy Priorities

The SDGs guide Norwegian ODA policy; Climate change, education and humanitarian assistance are top priorities

The Norwegian government has based its development policy on the UN’s Sustainable Development Goals (SDGs), ensuring alignment with global priorities.
Norway’s development policy priorities 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’, published in 2016. They include:

1.    Education;
2.    Global health;
3.    Humanitarian assistance;
4.    Private sector development, agriculture, and renewable energy; and
5.    Climate change, environment, and oceans.

These priorities are also reflected in the 2021 budget (see box) and additional funding since 2017 has mainly been directed towards these areas.


Norway’s development priorities:

  • Humanitarian assistance: Norway’s funding for humanitarian assistance has steadily increased in past years, reaching NOK6.3 billion (US$711 million) in the 2021 budget. It is the largest thematic budget line in Norway’s ODA budget.
  • 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 non-communicable diseases, women’s and children’s health, sexual and reproductive health (SRH), universal health coverage and global health security.
  • Education: Education funding focuses on children in crisis and conflict areas and girls’ and women’s education. Norway fulfilled its commitment to double spending between 2013 and 2017, reaching NOK3.4 billion (US$386 million) in 2017 and remaining at high level since.
  • Climate, environment, and oceans: A total of NOK4.5 billion (US$516 million) has been budgeted in 2021: NOK3,081 billion (US$350 million) from the Ministry of Climate and NOK1,460 billion (US$166 million) from the MFA.

ODA increases since 2017 mainly went towards these areas. These priorities are also reflected in the 2021 budget.

The Norwegian government’s commitment to climate change, the environment, and oceans is reflected in its substantial funding for the issue. One of its largest programs is the Norwegian International Climate and Forest Initiative (NICFI), under which it has pledged up to NOK2.9 billion (US$330 million) per year to reduce deforestation. Funding for this comes from the Ministry of Climate and the Environment. Norway is also a strong supporter of multilateral organizations for climate. In 2020, the government announced a doubling of its annual contribution to the Green Climate Fund (GCF) between 2020 and 2023, reaching NOK800 million (US$91 million) per year and making it third largest donor per capita. Other key partners include the Global Environment Facility (GEF) and the World Bank.

Since 2013, the successive governments of Prime Minister (PM) Erna Solberg have placed a strong focus on education, and particularly on girls’ and women’s education. Between 2013 and 2017, funding to the sector doubled and since then, funding has remained high (US$371 million in 2019 ; see sector page on education for more details). Within education, priority areas include, enhancing opportunities for women and girls to complete high quality, free and equal primary and secondary schooling, gender equal access to higher education (incl. university education), and to good technical and vocational training, as well as learning opportunities for children in crisis and conflict situations. Norway provides strong support to the Global Partnership for Education (GPE). It committed NOK2.1 billion (US$276 million) for 2018 to 2020, the third-largest pledge by any donor.

Norway regards education as an explicit component of its humanitarian assistance policy and shows international leadership in the area. It is one of five founding donors to the Education Cannot Wait (ECW) initiative, a special fund launched in 2016 that aims to improve access to education services in humanitarian emergencies and crises. In total, Norway has contributed US$84 million to the Fund. In 2020, it announced an additional NOK20 million (US$2 million) for ECW to support the education of children and youth impacted by the COVID-19 crisis.

Humanitarian assistance has grown significantly in recent years (67% since 2013, according to the government), in line with increasing needs linked to armed conflict, climate change, and poverty in countries and regions affected by fragility. The 2021 budget outlines a total of NOK6.3 billion (US$711 million) in funding for  humanitarian assistance, the most to  date. Funding to this sector was increased significantly throughout the budget process, from an initial NOK5.5 billion (US$625 million) proposed by the government. Focus areas will include protection (especially against sexual and gender-based violence) of children and young people, protection of civilians from land mines and other explosives, and the promotion of a green humanitarian response. Moreover, the government’s 2018 humanitarian strategy emphasizes the connection between long-term development assistance and emergency humanitarian activities, proposing an integrated and rights-based approach, and promoting effective, flexible, and predictable funding. Norway’s multi-year pledges include NOK1.7 billion (about US$200 million) for the Central Emergency Response Fund (CERF; 2018 to 2022).

Global health has been a longstanding priority for Norway and Norway’s commitment to the sector has been reinforced by COVID-19. The ‘health’ budget line within Norway’s ODA budget, stands at NOK4.0 billion (US$450 million) for 2021, up from NOK3.7 billion (US$420 million) originally budgeted for 2020. According to Norad’s 2020 statistics, Norway’s contributions towards health-related ODA, including core support for multilateral organizations, stood at NOK6.6 billion (US$750 million) in 2020. NOK2.8 billion (US$318 million) of that went toward fighting COVID-19 and its impacts in low-income countries. The bulk of Norway’s financing to the sector is channeled through multilateral organizations, with Gavi, the Vaccine Alliance (Gavi), the Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund), and the Global Financing Facility (GFF) as major partners. In the fall of 2019, the government launched its strategy ‘Better Health, Better Lives’, which focuses specifically on combatting non-communicable diseases within its development cooperation (2020 to 2024).

Civil society and human rights is another large priority for Norway, receiving substantial amounts of funding (see ‘ODA breakdown’).


Other relevant development strategies (white papers):

  • Global health (2012)
  • Fair distribution and growth (2013)
  • Global education (2014)
  • Private-sector engagement in development cooperation (2015)
  • Human rights in development policy (2015)
  • Equality and foreign development policy (2016)
  • Humanitarian strategy (2018)
  • Non-communicable diseases (2019)
  • Eliminating harmful practices (2019)
  • Norway’s role and interest in multilateral cooperation (2019)

ODA Breakdown

Norway relies heavily on multilateral organizations and CSOs to channel its ODA

Norway is a strong supporter of multilateral organizations. It channels just below one-quarter (23% in 2019) of its ODA as core contributions to multilateral organizations, significantly below the 41% average among members of the OECD Development Assistance Committee (DAC); however, Norway channels much of its multilateral funding in the form of earmarked funding through multilaterals (reported as bilateral ODA to the OECD, see details below).

Alongside multilaterals, civil society organizations (CSOs) are a key implementers of Norwegian ODA. In 2018, 27% of Norwegian bilateral ODA was channeled through CSOs (DAC average: 20%).

Norway’s bilateral funding is in line with its overall priorities

Norway’s strategic priorities are largely reflected in its bilateral funding allocations. According to OECD data, in 2019 16% (US$526 million) of bilateral ODA went to humanitarian assistance. The sector to receive the second largest share of bilateral ODA was environmental protection (13% or US$432 million). These were followed by funding for projects supporting government and civil society (12% or US$417 million), and education (10% or US$343 million).

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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$84 million in 2012 to US$255 million in 2019, a 203% 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.

Norway differentiates partners for long-term development cooperation and partners for conflict prevention

Norway’s ODA is mostly directed towards low-income countries, although this is not immediately evident from the ODA data. Because of the large share of Norway’s ODA channeled as earmarked funding to multilaterals, to support to CSOs, and toward in-country refugee costs, 56% of Norway’s bilateral ODA in 2019 was not allocated to a specific country. This means that low-income countries officially accounted for only one-quarter of bilateral ODA (22% in 2019). However, when only considering bilateral ODA allocated to specific countries, they received half (50%) of bilateral ODA.

Geographically, ‘sub-Saharan’ Africa (which includes Eastern, Western, Central, and Southern Africa) receives by far the largest share of Norway’s bilateral ODA (22% in 2019, according to OECD data), followed by the Middle East and North Africa (MENA) region (13%), and Asia (8%). Funding to the MENA region nearly doubled between 2013 and 2015, plateauing at a high level ever since (US$422 million in 2019). This is driven by large amount of funding for humanitarian assistance directed toward the region.

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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, with the aim of pursuing a holistic and cross-sectoral approach to development in each of its partner countries. It outlines two categories of partners:

  1. Partners for long-term development cooperation, with which Norway already has a long-standing engagement: Colombia, Ethiopia, Ghana, Indonesia, Malawi, Mozambique, Myanmar, Nepal, Tanzania, and Uganda.
  2. 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.

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Norway is a strong supporter of the multilateral system

Norway’s government considers funding through multilateral organizations an effective way to pursue its priorities. Norway supports multilateral organizations both through large core contributions (US$938 million in 2019 or 23% of its total ODA) and through significant earmarked funding amounts channeled through multilateral organizations for specific sectors or regions (US$1.5 billion or 34% of total ODA). This brings Norway’s total multilateral ODA to US$2.5 billion or 57% of its total ODA, putting it above the OECD DAC average of 55%. Funding channeled through multilateral institutions has increased by an annual average rate of 6% between 2015 and 2019 (it was US$1.9 billion in 2015). According to Norad’s 2020 statistics, this share went up to 59% in 2020, due to a NOK1.8 billion (US$205 million) increase from 2019 to 2020. Total funding through multilateral organizations amounted to NOK23.5 billion (US$2.7 billion) in 2020. Guidelines for Norway’s multilateral policy were published in 2019 in a MFA white paper titled ‘Norway’s Role and Interest in Multilateral Cooperation’.

Norway strongly supports the United Nations (UN) system. UN agencies received 43% of Norway’s core contributions to multilateral organizations in 2019. 12% went to the World Bank, and 10% to regional development banks. In 2020, according to Norad, the World Bank Group represented Norway’s single largest multilateral partner, receiving NOK4.6 billion (US$523 million). The current government also strongly supports vertical funds, especially in the global health sector. Key partners for Norway’s multilateral ODA include Gavi, the Vaccine Alliance (Gavi; 15% of multilateral contributions in 2019, according to OECD DAC data – 17% when including IFFIm), the Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund; 8%), and the Green Climate Fund (5%).  

 

Unless otherwise indicated, all data in this section is based on the grant-equivalent measurement system. For more information, see our Donor Tracker Codebook.

For more granular and up-to-date development finance data on Norway, including information on where and in which sectors it is spending both ODA and non-ODA funds, please consult the IATI d-portal. IATI is a reporting standard and platform on which organizations and governments voluntarily publish data on their development cooperation.

Main Actors

MFA steers strategy; Norad’s role strengthened after a 2020 reform

Norway’s coalition government is led by Prime Minister (PM) Erna Solberg. Solberg is a member of the Conservative Party (H), which has held power since 2013 and was most recently re-elected in October 2017. The Liberal Party (V) joined the ruling 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 Progress Party left the coalition in January of 2020. The government is now a minority government and is dependent on support of various parties in the Parliament. Norway’s next general elections are planned for September 2021.

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 and is thus in charge of development policy. In February 2020, Norway’s first-ever Ministry of Sustainability was created to coordinate the government’s work on the SDGs.

The MFA is responsible for the organization, coordination, and implementation of Norwegian foreign policy, including international negotiations, processes and global cooperation structures (e.g., United Nations, UN). It is also responsible for development cooperation within members of the Organization for Security and Co-operation in Europe (OSCE), Middle East, North Africa, and Afghanistan, as well as humanitarian assistance.

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 (partly reported as ODA), and the Ministry of Education and Research.

Norway Organisation Chart

Within the MFA, the Minister of International Development oversees the Norwegian Agency for Development Cooperation (Norad), Norway’s development finance institution (Norfund), and the Norwegian Agency for Exchange Cooperation (Norec). The Minister for Development is responsible for development cooperation outside of the states listed above, and with the United Nations (UN) system, the World Bank, and regional development banks.  

In an effort to increase transparency and to allow Norway to have a more strategic approach to development issues, a reform process shifted the distribution of roles and responsibilities between the MFA and Norad, which came into effect in February 2020. The MFA’s policy development competence was strengthened and consolidated by the reform, whereas Norad’s ODA management responsibilities were extended.

Under the new system, the MFA is in charge of developing policy, determining Norway’s main focus areas, and representing Norway in international arenas. The MFA then delegates much of Norway’s ODA management to Norad, with the exception of humanitarian assistance and human rights efforts which remain under the MFA’s remit. Concretely, this means that the responsibility for assessments, quality assurance, project implementation, follow-up, control and reporting goes to Norad. Norad now has a staff of 274 (an increase from 230 previous to the reform). It has no country offices but works closely with Norwegian embassies, which administer the majority of development assistance.

Norwegian embassies lead programming of bilateral cooperation in partner countries, based on the priorities outlined by the MFA. 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 outlining these priorities. Within them, embassies have ample financial and programming authority.

Norway’s development finance institution Norfund is a state-owned investment fund, operating under supervision of the MFA. Established in 1997, it supports private-sector activities in developing countries and focuses on renewable energy, agribusiness, and financial institutions. By the end of 2019, Norfund was managing investments worth over NOK24.9 billion (US$2.8 billion), almost half of which is in clean energy projects.

The Parliament, largely through its Committee of Foreign Affairs and Defense, scrutinizes 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.

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 more than one-quarter 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).

Budget Structure

Norway uses ’thematic cooperation’ budget lines to pursue its strategic priorities

Norway’s ODA budget for 2021 stands at NOK37.9 billion (US$4.3 billion), or 1% of Norway’s projected gross national income (GNI). While stable in terms of ODA-to-GNI ratio, this is a NOK1.3 billion (US$149 million) decrease over 2020 levels, due to the economic setback resulting from the COVID-19 crisis.

ODA comes from two main sources: the Ministry of Foreign Affairs (MFA) and the Ministry of Climate and Environment. According to the Minister of Foreign Affairs, between half and two thirds of the projected ODA budget for 2021 to 2025 has already been earmarked through multi-year commitments. This leaves little flexibility within the budget in upcoming years.

The MFA provides 92% (NOK34.7 billion or US$3.9 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.

  • Thematic cooperation combines bilateral and multilateral funding to advance specific areas. It receives by far the largest share of funding by the MFA, 65% of all Norway’s ODA expenditure in 2021. 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).
  • 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 United Nations (UN) development agencies and certain international financial institutions.

In addition to the MFA, the Ministry of Climate and Environment provides NOK3.1 billion (US$350 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.

     

2020 ODA budget

millions
NOK

millions

US$

Ministry of Foreign Affairs 34,740 3,948
Thematic cooperation 24,490 2,783
Humanitarian assistance 6,258 711
Business development, agriculture and renewable energy 3,470 394
Health 3,962 450
Education, research and professional cooperation 2,739 311
Civil Society 2,028 231
Peace, security, and global cooperation 2,036 231
Climate, environment and seas 1,460 166
Equality 1,234 140
Human rights 799 91
Costs of refugees in Norway 504 57
Bilateral cooperation 4,679 532
Africa 2,178 248
Europe and Central Aisa 776 88
MENA region 589 67
Afghanistan 475 54
Asia 484 55
Latin America 177 20
Multilateral funding 3,203 364
Multilateral financial institutions 2,379 270
UN development agencies 824 94
Administration costs 2,368 269
Ministry of Climate and Environment 3,081 350
Ministry of Finance 88 10
Ministry of Knowledge 16 2
Total ODA Budget 37,926 4,310

Budget Process

Indicative ministerial budget ceiling is set in March; budget details are determined from April to August

The 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 March/April and in the August.

Norway Budget Cycle
  • 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 senior officials from the Ministry for Foreign Affairs (MFA).
  • 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 ceilings 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.