Finland

ODA Spending

How much ODA does Finland contribute?

In 2022, Finland provided US$1.6 billion in ODA funding, according to the OECD’s preliminary figures. By volume, Finland ranked 20^th among DAC donors. In 2022 Finland’s ODA/GNI was 0.58%, ranking 8^th among DAC countries.

How is Finland's ODA changing?

Finland’s ODA volumes have steadily increased from 2018 to 2022, representing a 64% increase. However, the increase in ODA in 2022 was driven by a five-fold increase in in-donor refugee cost. Excluding in-donor refugee costs, support to Ukraine (beginning 2022), and COVID-19 vaccine dose donations (beginning 2021), Finland’s ODA/GNI ratio fell from 0.45% in 2021 to 0.41% in 2022.

Prime Minister Petteri Orpo’s 2023 government program indicates that total ODA volume will decrease in 2023-2027. The program also explicitly mentions that Finland will not aim to reach the 0.7% ODA/GNI target in this period, as the current government’s priorities are focused on minimizing spending.

How is Finland's ODA allocated?

In 2022, US$824 million (48%) of Finland’s ODA was spent on: in-donor refugee costs ( US$435 million, 25%); contributions to the EU (US$305 million, 18%), support to Ukraine ( US$65 million, 4%); and COVID-19 vaccine dose donations ( US$21 million, 0.2%). In comparison, the total DAC share for the same year was 25%. This leaves US$887 million of ODA for development priorities.

Support for Ukraine is going to be a priority in Finnish development assistance in upcoming years. Finland has planned a total of EURR58 million for 2024-2027. This likely means reprioritizing bilateral assistance by reducing the number of partner countries that Finland works with.

In 2021, 47% of Finland’s ODA was channeled bilaterally (including direct and earmarked funding), below the DAC average of 59%. Finland’s share of ODA channeled as direct bilateral funding is relatively low at 30%, compared to the 43% DAC average. In 2021, 53% of total gross ODA was core funding to multilaterals, compared to the DAC average of 41% in 2021.

As a smaller economy, Finland works to create an impact largely through EU institutions or larger multilaterals. One of the key changes to Finland’s development priorities over the next few years is a stronger emphasis on multilateral assistance, mainly channeled through EU institutions, UN agencies, and MDBs.

Bilateral Spending

Finland is shifting away from bilateral country programs towards development cooperation by domestic CSOs. The ability of domestic organizations to acquire international funding (e.g., EU, UN, foundations funding) and to participate in multi-stakeholder projects is being strengthened.

The top five partner countries in 2021 were Ethiopia, Afghanistan, Nepal Somalia, and Tanzania, all of which are long-term partner countries.

Multilateral Spending and Commitments

In 2021, Finland’s funding to core multilaterals was US$795 million (53%) of total gross ODA.

What is the future of Finland's ODA?

Official estimates indicate a decrease in Finland’s ODA and ODA/GNI in 2023 and 2024.

Politics & Priorities

What is the current state of Finland's politics?

Finland’s current government was formed after the general election in spring 2023 and will be in power until 2027. It consists of Finnish Kokoomus (market liberal party), Perussuomalaiset (right-wing populist party), and a few minor parties. The government won the election largely based on the promise to cut down government spending in light of high inflation. Perussuomalaiset, in particular, has been promoting a political stance advocating against immigration and development cooperation. This is reflected in the current government program, where development assistance and annual refugee intakes are being cut.

The Prime Minister’s office steers the ministries based on the government program, and the ministries in turn steer implementing agencies under them. Implementing agencies (e.g., those responsible for different subsidies) have limited autonomy for decision-making. The political system in Finland is relatively rigid compared to Sweden, where agencies have more autonomy.

Finland will hold its next presidential election in 2024. However, this likely will not have significant relevance for development priorities.

Who is responsible for allocating ODA?

The Department for Development Policy within the Ministry of Foreign Affairs is responsible for Finland’s development cooperation policy and implementation, and development finance. The majority of ODA is allocated by the MFA. A small part of the ODA budget is channeled through Finnfund, Finland’s development finance institution.

In addition, the KPT, Finland’s government-appointed advisory body, monitors and reviews Finland’s development cooperation and policy. The Political Department and the Department for External Economic Relations provide policy guidance to the regional departments responsible for their respective geographic areas.

Other relevant ministries include the Ministry for Employment and Economy (responsible for R&D subsidies), the Ministry of Education and Culture (responsible for research funding), and the Ministry of Social Affairs and Health (mainly responsible for national matters, but also international cooperation to some extent).

What are Finland's development priorities?

The cross-cutting key priorities for Finland’s development cooperation are:

• Strengthening women’s and girls’ position, self-determination, and sexual and reproductive health;
• Education; and
• Climate action.

Budget

Soon after releasing the government program in the summer of 2023, the current government published the budget for the electoral cycle 2023-2027, which will be renewed annually.

The state budget, also known as the fiscal plan, is an annual plan concerning the state's economy and financial management. The budget includes the state's appropriations and revenues for the following year. It also decides on the amount of debt to be taken out to cover deficits, if necessary.

Finland's fiscal year corresponds to the calendar year.

Budget Cycle

• January: Ministries submit their budget proposals to the Ministry of Finance. These proposals are part of the multi-year financial and operational planning of the ministries and agencies. The Ministry of Finance compiles the state’s financial frameworks for the coming years.
• March-April: The government approves the financial frameworks as part of the public finance plan. The budget preparation continues in the ministries based on the approved public finance plan and the guidelines provided by the Ministry of Finance.
• May: The ministries compile their administrative branch’s budget proposal from their respective agencies and institutions and submit the proposal to the Ministry of Finance.
• July-August: The budget proposal is finalized and presented in the general session of the Council of State and approved by the Parliament. Supplementary budget proposals are added as necessary.