At a glance
- Sweden is the largest donor in proportion to the size of its economy: In 2018, the country spent 1.04% of its gross national income (GNI) on official development assistance (ODA). In absolute terms, Sweden is the sixth-largest donor country, spending US$5.8 billion on ODA in 2018.
- Since 1975, Sweden has exceeded the United Nations’ (UN) 0.7% target for the ratio of ODA-to-GNI. Since 2008, it has maintained its long-term commitment to spending 1% of its GNI on ODA.
- According to the government’s budgets, ODA levels are estimated to reach SEK50.7 billion in 2019 and SEK52.1 billion in 2020. This is an overall increase compared to 2018, when the ODA budget stood at SEK50.0 billion.
- Sweden’s 2016 Aid Policy Framework is aligned with the Sustainable Development Goals (SDGs). It outlines eight focus areas: 1) human rights, democracy, and the rule of law, 2) gender equality, 3) the environment and climate change, 4) peace and security, 5) inclusive economic development, 6) migration and development, 7) health equity, and 8) education and research.
- Gender equality and women’s empowerment are central to Swedish foreign and development policy. Sweden was the first country to implement a Feminist Foreign Policy, starting in 2014.
- Sustainable use of natural resources, marine resources, environment, and climate change are other key priorities. These feature in many new country strategies and their prioritization is reflected in Sweden’s multilateral engagement. Sweden is the highest per-capita contributor to the Green Climate Fund and to the Global Environment Facility.
- Given their minority mandate, the government (Social Democrats and Green Party) is under pressure from the Center and Liberal parties, whose support it relies on. Democratic governance and human rights are central issues for the opposition parties. As a result, both topics are high on the government’s development agenda and accordingly, may see increased funding.
- The government’s 2020 ODA budget, set at SEK52.1 billion (US$6.0 billion in 2018 prices) represents an increase from SEK50.7 million in 2019, but a decrease in current US$. This is due to a drop in the conversion rate from Swedish Krona to US dollars. Using the February 2020 exchange rate (OECD), the 2020 budget stands at US$5.3 billion.
- The European Economic Forecast predicts a slowdown in Sweden’s economic growth, to 1.5% in 2020 down from 1.7% in 2019. This might affect development spending in two ways: ODA increases driven by economic growth under the 1%-of-GNI target might be lower, and fluctuations in exchange rates could impact the availability of funding in US$.
Sweden is the sixth-largest donor in absolute terms and first in proportion to the size of its economy
Sweden is the largest donor among members of the OECD Development Assistance Committee (DAC) in proportion to the size of its economy: ODA stood at 1.04% of Sweden’s GNI in 2018. This corresponds to US$5.8 billion, making Sweden the sixth-largest donor among DAC members in absolute terms.
Sweden has exceeded the UN’s target of 0.7% ODA-to-GNI ratio since 1975, and since 2008 it has been committed to spending at least 1% of its GNI on ODA. Between 2017 and 2018, ODA went up by 4.5% (in real terms), driven by the 1%-target. Since the new target was introduced, Sweden has increased its core contributions to multilateral organizations, in particular.
The ODA budget is set to remain in line with Sweden’s 1% ODA-to-GNI commitment. The volume of these increases is closely linked to Sweden’s economic growth. In February 2020, the European Economic forecast stated that “indicators on economic sentiment and orders point to relatively weak growth over the forecast period”, indicating that the volume of ODA increases might remain rather low until 2021. This might also further affect exchange rates (see below).
The 2019 budget sets ODA at SEK50.7 billion (US$5.8 billion in 2018 prices, which are used throughout this profile to allow for comparability). For 2020, the budget is set at SEK52.1 billion. This represents US$6.0 billion in 2018 prices. However, in 2019, the value of the Swedish Krona dropped significantly against the US$; the exchange rate went from 8.70 in 2018 to 9.46 in 2019, affecting the volume of development spending in US$ considerably. When using the 2019 annual average exchange rate, the 2020 budget amounts to US$5.5 billion.
Between 2014 and 2017, costs of hosting refugees in Sweden accounted for a large share of the country’s reported ODA, peaking at US$2.5 billion in 2015 (34%), before gradually falling back to US$522 million in 2018 (9% of total ODA, the lowest level since 2013). To cover these costs, Sweden partly uses funds that fall under its 1% commitment. These costs are likely to remain low in coming years (US$270 million budgeted for 2020), although the use of Sweden’s ODA budget to cover refugee related costs remains a point of debate.
Following the general elections in September 2018, negotiations to form a government succeeded in January 2019. The Social Democrats continue to lead a minority coalition with the Green Party and are now supported by the Center and the Liberal Parties. Defining issues of the previous government, including the feminist foreign policy and the fight against climate change, will continue to be prioritized. All parties except the Sweden Democrats (far-right) and the Moderates (center-right) support the 1% GNI-to-ODA commitment.
Unless otherwise indicated, all data in this section is based on the grant-equivalent measurement system. For more information, see our Donor Tracker Codebook.
Sweden’s policy focuses on democratic governance, gender equality, SRHR, climate, and environmental resources
The Agenda 2030 and the Sustainable Development Goals (SDGs) are central to Sweden’s policies, and the government seeks to be a leader in implementing them both nationally and internationally. In line with the overarching Agenda 2030 framework, the Swedish development policy strongly aligns with the SDGs.
The SDGs are central to all of Sweden’s policies, and particularly to its development cooperation.
The government’s 2016 Aid Policy Framework outlines the overall objectives of Swedish development cooperation and sets eight focus areas: 1) human rights, democracy, and the rule of law; 2) gender equality; 3) the environment and climate change, and the sustainable use of natural resources; 4) peace and security; 5) inclusive economic development; 6) migration and development; 7) health equity; and 8) education and research. The current government, sworn in in January 2019, will continue to focus on the previous government’s flagship issues: gender equality and women’s empowerment (against the backdrop of its feminist foreign policy), human rights, and climate change (see box). The promotion of democratic governance is also a priority. The latest OECD Development Assistance Committee (DAC) peer review, published in June 2019, commends Sweden for its leadership on peace and conflict prevention, environmental sustainability and climate change, and gender equality.
Sweden’s key development priorities:
- Gender equality and women’s empowerment: Sweden’s leadership is widely recognized in the area; feminist foreign policy governs overarching orientation of foreign policy.
- Climate change: Sweden is one of the largest per capita donors to GCF and GEF; strong focus on marine resources for bilateral ODA.
- Democratic governance, human rights, rule of law, and freedom of speech: New investments in these areas will be directed to Eastern Europe and EU neighboring areas.
In 2014, Sweden was the first country in the world to launch and implement a feminist foreign policy, allowing it to use all of its foreign policy tools (including development cooperation) to address gender equality globally and take a more systemic approach to the issue. In addition to mainstreaming gender in all its development programs, Sweden published its first strategy specifically for gender equality and women’s empowerment in May 2018. The strategy focuses on the full enjoyment of human rights by all women and girls, including through work on normative frameworks, discrimination, gender-based violence, safety, and security for actors and organizations that promote gender equality, and increased access and use of sex-disaggregated data and research. It is backed by a funding envelope of SEK1 billion (US$115 million) between 2018 and 2022.
Sweden implements a feminist foreign policy, in which SRHR is one of six objectives.
Sweden is also committed to environmental protection and resilience, and disaster-risk reduction, with a special emphasis on marine resources. In its ‘Strategy for development cooperation in sustainable environment, climate and marine resources, and sustainable use of natural resources’ for 2018 to 2022, the government set aside SEK6.5 billion (US$748 million) to promote progress in these areas. This focus is also demonstrated at the multilateral level: Sweden is one of the largest per-capita donors to both the Green Environment Facility (GEF) and the Green Climate Fund (GCF). Sweden has committed SEK2 billion (US$230 million) to GEF for 2018 to 2022 (+50% in SEK compared to 2014 to 2018) and almost doubled its contribution to the GCF to reach SEK8 billion (US$921 million) for 2020 to 2023.
Human rights, democracy, and the rule of law have become a greater priority since the formation of the new government in January 2019. It is a particularly important issue for the Center and the Liberal parties, which are not members of the ruling coalition, but on whose support the minority government depends to pursue its policies. Within this area, Sweden defined three objectives in its 2018-2022 ‘Strategy for development cooperation in the areas of human rights, democracy and the rule of law’: 1) inclusive democratic societies, 2) equal rights for all, and 3) security, justice, and accountability. Women's and girls’ enjoyment of human rights is central to the strategy. In 2020, the Swedish development agency (Sida) was allocated SEK1 billion (US$115 million) in the state budget.
Conflict prevention and humanitarian assistance are other key areas funded by Sweden’s ODA. Conflict prevention focuses on women, peace, and security, including training and integration of women in peace-negotiation processes. Sweden’s humanitarian assistance is needs-based and presented separately from development focus areas in the 2016 Aid Policy Framework. However, Sweden’s actions focus on strengthening cooperation and increasing synergies between humanitarian initiatives and long-term development cooperation.
Sweden provides strong support to multilateral organizations
Sweden is a strong supporter of the multilateral system. Core contributions to multilateral organizations account for slightly more than one third of Swedish ODA (34% in 2018). This is below the OECD Development Assistance Committee (DAC) average of 41%; however, when contributions passing through multilaterals that are earmarked for specific purposes are added, this share rises to 56% (DAC average: 55%; see below for more information on Sweden’s multilateral engagement).
Sweden channels almost a third its bilateral ODA through civil society organizations (CSOs; 30%), well above the DAC average (18%). The government recognizes CSOs’ key role in reducing poverty, strengthening democratic development, and supporting human rights, especially in countries that are not democratically governed.
Refugees costs have gone down; humanitarian assistance is on the rise; democratic governance and human rights are funding priorities
In 2018, the largest share of bilateral ODA went to the ‘government and civil society’ sector (20% of bilateral ODA or US$781 million in 2018, up from US$652 million in 2015). This was in line with Sweden’s focus on democratic governance and human rights and may increase further in 2019, due to the new government’s stronger focus on the topic. Around two-thirds of the funding in this area went to projects supporting democratic participation or human rights.
Costs for hosting refugees reported as ODA have greatly distorted Swedish ODA statistics over the past years. In 2015, Sweden received a particularly high number of asylum seekers, especially considering its population size. Consequently, ODA costs for hosting refugees went up significantly, reaching a peak of US$2.5 billion in 2015 (34% of total ODA at the time). These costs have gradually decreased, reaching US$525 million in 2018, though in-country refugees are still the second-largest spending area of bilateral ODA (13%). According to budget documents, refugee costs are expected to remain low in the coming years (US$270 million in 2020, around 5% of the total ODA budget).
Sweden's bilateral funding is strongly aligned with its policy priorities.
The third-largest share of Swedish bilateral ODA went to humanitarian assistance (12% of bilateral ODA, US$494 million). Funding to the sector grew by 22% between 2015 and 2016 and has remained high since. Sweden has been strengthening its focus on conflict-affected areas, and it will likely continue to do so.
According to the OECD, virtually all of Sweden’s ODA consists of grants (98% in 2018). The remaining 2% (US$69 million) is made up of capital subscriptions (equity investments) by the MFA into Swedfund, Sweden’s state-owned development finance institution.
Sweden’s funding targets low-income countries and countries in sub-Saharan Africa
Sweden’s ODA targets primarily partner countries in sub-Saharan Africa and low-income countries. High earmarked funding to multilaterals and funding to CSOs, as well as in-country refugee costs, are counted as bilateral ODA but cannot be allocated to specific countries; this distorts OECD data about recipients of Swedish ODA (see figure below). When excluding these unallocated funds (45%), sub-Saharan Africa accounted for over half of Sweden’s bilateral ODA in 2018 (51%). Funding to the Middle East and North Africa (MENA) grew significantly until 2015 and has hovered around 15% since. In 2018, it reached US$315 million.
The 2016 Aid Policy Framework states that its bilateral funding must be focused on the least-developed and most-vulnerable countries. This policy is backed by funding data: more than half (56%) of Sweden’s bilateral ODA is allocated to low-income countries (when excluding unallocated funding, 26% of total bilateral ODA) in 2018. Yet, the government also recognizes that an increasing proportion of global poverty is found in middle-income countries. Overarchingly, the government is likely to continue to strengthen its focus on fragile states.
The Swedish development agency, Sida, has 35 partner countries, the largest number of which in sub-Saharan Africa (see box).
Sida’s partner countries for bilateral cooperation
- Sub-Saharan Africa: Burkina Faso, the DRC, Ethiopia, Kenya, Liberia, Mali, Mozambique, Rwanda, Somalia, South Sudan, Sudan, Tanzania, Uganda, Zambia, Zimbabwe
- Asia: Afghanistan, Bangladesh, Cambodia, Iraq, Myanmar, Palestine, Syria
- Europe: Albania, Belarus, Bosnia-Herzegovina, Georgia, Kosovo, Moldova, North Macedonia, Russia, Serbia, Turkey, Ukraine
- Latin America: Bolivia, Colombia, Cuba, Guatemala
High earmarked funding to multilaterals and funding to CSOs, as well as in-country refugee costs, are counted as bilateral ODA but cannot be allocated to specific countries; this distorts OECD data about recipients of Swedish ODA (see figure below). When excluding these unallocated funds (45%), sub-Saharan Africa accounted for over half of Sweden’s bilateral ODA in 2018 (51%). Funding to the Middle East and North Africa (MENA) grew significantly until 2015 and has hovered around 15% since. In 2018, it reached US$315 million
Sweden is a strong supporter of the UN system
Sweden financially supports multilateral organizations both through core contributions (34% of total ODA in 2018; US$2.0 billion) and through earmarked funding (22%; US$1.3 billion). Funding to multilateral organizations is disbursed in line with the January 2018 ‘Strategy for multilateral development policy’, which defines the orientation of Sweden’s multilateral engagement and provides guidelines to the three main stakeholders for this area (the Ministry of Foreign Affairs [MFA], Sida, and Swedish embassies).
The un-earmarked character of financing is one of three core principles outlined in this strategy, for which Sweden strongly advocates at an international level. Large shares of what is reported as earmarked funding in OECD data is made up of funding to thematically focused organizations (e.g., the Global Partnership for Education) and funds, but not necessarily earmarked for a specific purpose within these funds. This is referred to as ‘soft’ earmarking. The second and third principles of Sweden’s ‘Strategy for multilateral development policy’ highlight the need for a long-term perspective in engagement with a multilateral organization and the need to foster coordination across the multilateral system.
Sweden is a strong advocate for unearmarked funding to multilateral organizations.
Within its multilateral engagement, Sweden is a strong supporter of the United Nations (UN): 41% of Sweden’s core contributions to multilaterals in 2018 went to the UN. Sweden supports UN reform efforts and pushes its ‘women, peace and security’ agenda within the UN. Its priorities in the UN include conflict prevention, peace building, gender equality, global development, climate, and human rights.
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.
MFA decides on strategy; Sida executes
The current Swedish government led by Prime Minister (PM) Stefan Löfvén of the Social Democrats (S), is a coalition between his party and the Green Party (MP). The government was sworn in in January 2019, after lengthy negotiations following inconclusive results from the September 2018 elections. Löfvén, now on his second term in office, leads a minority government with the parliamentary backing of the Center and the Liberal parties. Both were former members of the center-right opposition ‘Alliance’. As a minority coalition, the government is under great pressure from the opposition, particularly during budget negotiations.
SWEDEN'S DEVELOPMENT COOPERATION SYSTEM
The Ministry of Foreign Affairs (MFA) oversees development policy and financing and decides on core funding to multilateral organizations. Ann Linde (S) has led this ministry since September 2019. Previously, she worked as Sweden’s Minister for Foreign Trade, with responsibility for Nordic affairs (2019), and as Minister of EU Affairs and Trade (2016 to 2018). She follows Margot Wallström, who held the position since 2015.
Within the MFA, Peter Ericsson (MP) has served as Minister for International Development Cooperation since January 2019. He took over from Isabella Lövin (now Minister of Environment), under whose leadership environmental issues were a top focus. This is likely to continue under Ericsson’s leadership, with a parallel focus on democracy.
Key development-related units within the MFA include the Department for International Development Cooperation, responsible for overall governance and evaluation of development cooperation and for coordination to draft the ODA budget. It also coordinates planning on thematic focuses and strategy for the Swedish development agency, Sida.
Other relevant departments are the UN Policy Department, responsible for support through UN organizations and thematic funds, and the Global Agenda Department, which coordinates the 2030 Agenda for Sustainable Development. The Global Agenda Department also manages and develops the feminist foreign policy, including gender-equality issues in development cooperation.
The MFA oversees development policy and financing.
Sida administers and executes development policy implementation in cooperation with civil society organizations (CSOs), embassies, and other government agencies. Based on strategic guidelines set by the MFA, Sida and Swedish embassies draft strategies for countries, regions, and thematic areas. These are then further refined by the MFA and approved by the government. Country strategies outline key sectors of engagement and provide indicative budgets for the timeframe (usually three to seven years).
Sida manages about 50% of Sweden’s total ODA financing: SEK27.5 billion in 2020 (US$3.2 billion, including administrative costs), in accordance with the strategies developed by Sida and the MFA. It also provides increasing amounts of guarantees (debt-backing), covering a wide range of areas (e.g., infrastructure, market development, AG, health, democracy, and human rights).
Sida is managed by a governing board, appointed by the Swedish government. Besides its Director-General (Carin Jämtin since June 2017), who is responsible for Sida’s operational activities, the board includes members of the public administration, private sector, and academia. Sida has 782 employees, many of whom work at Swedish embassies and 65% of whom are women.
Sweden’s development finance institution, Swedfund, is a state-owned investment fund that supports private-sector activities aimed at promoting sustainable economic development in sectors such as energy, infrastructure, and industry. It is supervised by the Ministry for Enterprise and Innovation and provides risk capital and investment for projects that alleviate poverty in low-income countries.
CSOs play a major role in Sweden’s development assistance. In 2018, almost a third of the country’s bilateral ODA was channeled through them (30%), well above the average of 18% among members of the OECD’s Development Assistance Committee (DAC). Sida has increased its engagement with Swedish CSOs to identify new methods of delivering its bilateral programs and increasing aid effectiveness.
Sida manages half of Sweden’s ODA budget
The current government is committed to allocating 1% of Sweden’s GNI to ODA. This share is outlined in each year’s budget and the total of all funding sources contributing to it is referred to as the ‘ODA frame’. The 2020 budget sets the ODA frame at SEK52.1 billion, or US$6.0 billion in 2018 prices (used throughout this profile to allow for comparability). This represents 1.0% of GNI. Due to volatility in exchange rates, the ODA budget amounted to US$5.5 billion if converted using the 2019 annual average exchange rate (see ODA trends).
‘Budget Area 7: International assistance’ covers 88% of the ‘ODA Frame’ (SEK46.0 billion, or US$5.3 billion). The remainder consists mainly of spending to cover the costs of hosting refugees in Sweden (5% of the ODA frame), assessed contributions to the EU, and management costs of the Ministry of Foreign Affairs.
Sida manages both geographic and thematic cooperation budgets.
Budget area 7 includes all funding managed by Sida (the Swedish International Development Agency). Sida manages about 50% of Sweden’s total ODA financing (SEK27.5 billion or US$3.2 billion in 2020, including its administrative costs but excluding funds for which it only handles payment and financial monitoring). In 2020, this funding is divided between seven areas: 1) bilateral cooperation, 2) thematic cooperation, 3) humanitarian assistance, 4) funding for Swedish CSOs, 5) research cooperation, 6) capacity development and agenda 2030, and 7) information and communication.
‘Bilateral cooperation’ programs are guided by regional and country strategies, which assign indicative budget allocations. These strategies are developed by the MFA, Sida, and the various embassies, and approved by the government.
The ‘thematic cooperation’ program entails three main envelopes: 1) human rights, democracy, and the rule of law, 2) sustainable development, and 3) sustainable peace. As for country-based bilateral cooperation, each of these areas is governed by a strategy that defines spending ceilings and main funding areas.
Budget Area 7 also includes the MFA’s funding lines for core contributions to UN agencies and other multilateral funds, as well as for multilateral development banks, debt relief, and ‘strategically oriented grants’ (see table).
Sweden's 2020 ODA state budget
|Total Budget Area 7 (international assistance)||45,984||5,291|
|Funding for Swedish CSOs||1,875||216|
|Capacity development and agenda 203||710||82|
|Information and communication||155||18|
|Multilateral organizations (UN agencies) and funds||10,350||1,191|
|Multilateral development banks; debt relief||5,000||575|
|Strategically oriented grants||949||109|
|Administrative costs (including Sida's)||1,706||200|
|Costs of hosting refugees||2,346||270|
|MFA administrative costs||442||51|
|Other (e.g., funding for some UN agencies)||827||95|
|Total ODA ('ODA frame')||52,110||5,996|
The government allocates funding to specific areas from June to August
The Swedish budget process runs over a two-year period. It starts in the year that precedes its implementation and continues during the current fiscal year; the ongoing budget can be amended in spring and autumn.
- Sida develops its draft budget: By March 1st of the year before a budget comes into force, Sida submits its draft to the Ministry of Foreign Affairs (MFA). Sida’s full budget is organized by strategies consisting of regions, countries, and broad thematic priorities (such as ‘sustainable social development’). Sida’s leadership and regional departments are the main decision-makers regarding budget requests.
- Ministry of Finance develops the Spring Fiscal Policy Bill: From March to April, the Ministry of Finance develops the Spring Fiscal Policy Bill based on each ministry’s expenditure estimates. It includes ministerial expenditure ceilings for the next three years.
- Government presents the Spring Fiscal Policy Bill to Parliament: In mid-April, the government submits the Spring Fiscal Policy Bill to Parliament. The first decision on the overall ODA volume is made. Once determined, major changes to ODA volume are rare. The ODA budget is tied to the GNI level. This is followed by a debate in Parliament, which approves the budget bill in June.
- Minister for Development decides on specific budget lines: In July and August, the MFA’s Minister for International Development Cooperation allocates further funding to expenditure areas within the main ODA budget. Broad budget lines (e.g., Sida’s own budget) and allocations to specific budget items (e.g., Sida’s thematic budget line on ‘sustainable social development’) are decided at this time.
- Government presents budget bill to Parliament: The government presents its budget bill to Parliament in mid-September (at the latest on the 20th), except during election years when this may be postponed until November 15th.
- Parliament debates and amends budget bill: Debates take place from early October to early December. The Committee on Finance discusses the government’s draft expenditure ceilings for all budget areas. The Committee on Foreign Affairs may propose amendments to specific allocations within the ODA Budget Area 7. Usually, under a minority government such as the current one, the government must negotiate closely with the opposition.
- Parliament votes on budget bill: In mid-December, the Parliament makes the final decision on the budget bill. The government then sends its annual appropriation letter to Sida, which specifies overall funding to Sida and the allocation of funds by regions or thematic issues
The Spring Amending Budget Bill may be used to divert or reallocate funds originally allotted for the current year. The ongoing budget can also be amended in September, when the government presents its budget bill to Parliament for the next year.