Last updated: April 26, 2023
ODA in Context
Germany was the second-largest donor country among members of the OECD DAC in 2021.
Germany is the fourth-largest donor in proportion to the size of its economy. The country spent 0.76% of its GNI on ODA in 2021, or 0.7% excluding in-country refugee costs. Germany is one of the few European countries that does not offset the costs associated with hosting refugees with cutbacks in funding for global development.
2022 preliminary figures show Germany's rankings stayed the same in both absolute and relative terms.
Driven by increased contributions to multilaterals, bilateral support for Ukraine and in-donor refugee costs, Germany's ODA rose to historic 0.83% of GNI in 2022, up from 0.76% in 2021. Germany's ODA levels have been elevated since 2020, initially by additional funding from its domestic COVID-19 supplementary budget.
2022 was the third year since 2016 that Germany has reached the 0.7% ODA/GNI target. The German government has committed to reaching the target but fell short in 2018 and 2019.
Total ODA increased by 8% between 2020 and 2021 in real terms, due to an increase in Germany’s bilateral and multilateral ODA spending to fight the COVID-19 pandemic and provide vaccine donations. The OECD DAC estimates total COVID-19-related ODA from Germany at US$3 billion in 2021.
After Germany’s ODA level reached record-high levels in 2020 and 2021, driven by Germany’s response to the COVID-19 pandemic, the government expected ODA to decrease in 2022 to EUR23 billion ( US$27.2 billion) and EUR22.4 billion ( US$23.6 billion) in 2023, in line with a decreasing budget for the BMZ. However, the projections did not account for the unexpected influx of refugees from Ukraine, which will likely inflate ODA levels, as costs for receiving refugees in Germany are partially counted as ODA and financed from additional budgets.
The German government has a strong preference for bilateral funding. In 2021, bilateral funding accounted for 77% of total ODA, well above the DAC average of 59%. This includes earmarked funding through multilaterals. Germany’s preference for bilateral funding is driven by its two large government-owned implementing agencies, the GIZ and the KfW. Germany channels only 8% of its bilateral ODA through NGOs, about half the DAC average of 17%.
Germany channels the largest share of its bilateral ODA as grants totaling 81% in 2021, below the DAC average of 91%, with the remaining 19% disbursed as loans and equity investments, down from 25% in 2020. The responsibility for administering loans is assigned by the BMZ to the KfW. Most loans are provided in the energy sector to LMICs and UMICs.
In response to the influx of asylum seekers to Germany since 2015, spending on humanitarian assistance and migration has increased significantly from pre-2015 levels. Even after a decrease since 2017, the cost of hosting refugees in Germany still accounted for the third-largest share of Germany’s bilateral funding in 2021. Due to the influx of refugees from Ukraine to Germany in 2022, Germany’s in-country refugee costs will likely increase again in 2022.
While education received the largest share of Germany’s bilateral ODA in 2021, more than US$2 billion, or 59%, represents costs for students from partner countries studying in Germany. A significant proportion of Germany’s bilateral ODA is spent within Germany and does not support partner countries directly.
Agriculture has been a priority for German development cooperation for several years, and funding to the agriculture sector has increased by 31% since 2017. However, the sector receives a relatively small share of bilateral ODA, only 5% in 2021. Additional ODA for agriculture comes from Germany’s contributions to multilateral organizations.
The portion of bilateral ODA going to LICs is relatively low compared to other DAC donors. Current spending also falls short of Germany’s ambition to spend 0.2% of ODA/GNI on LICs, which was reaffirmed in the 2021-2025 Coalition Agreement. In 2020, only 0.15% of GNI was spent on ODA to LICs.
Asia received the largest share of Germany’s bilateral ODA in 2021 (17%), followed by Sub-Saharan Africa (16%) and the MENA region (15%).
ODA to Sub-Saharan Africa has steadily increased over the last years, from 12% of Germany’s bilateral ODA in 2017. As the German government increases its focus on fighting the root causes of migration in the Middle East, North Africa, and Sub-Saharan Africa, larger portions of ODA will likely go to these regions in the coming years.
Germany channels 36% of its bilateral ODA to MICs, with India, China, and the Syrian Arab Republic comprising the largest individual country recipients. However, most funding to India (70%) and about half of funding to China (45%) is provided in the form of loans or equity investments.
The top recipients of German grant funding are the Syrian Arab Republic, Afghanistan, China, and Yemen. This is in line with the BMZ’s prioritization of partnerships within the MENA region.
Multilateral Spending and Commitments
Before 2013, the German Parliament had capped multilateral spending at one-third of total German ODA. Although this cap has since been lifted, core funding to multilaterals remains significantly lower than the DAC average of 41%. Like many EU Member States, the largest recipients of Germany’s multilateral funding in 2021 were EU Institutions. Germany is also among the largest donors to Gavi, the Global Fund, and UN agencies.
Germany’s earmarked funding to multilaterals, which is channeled through multilateral development organizations for use in a specific sector or country, has increased significantly in recent years. The growth has largely been driven by Germany’s funding to UN agencies active in humanitarian assistance and crisis response.
Recent commitments to multilateral organizations are summarized below.
Politics & Priorities
Germany is a parliamentary democratic republic. Political power is divided among three branches:
- The legislature, which includes the Bundestag, or parliament, and the Bundesrat, the representative body for Germany’s regional states;
- The executive branch, including the Head of Government, the Head of State, and the Cabinet; and
- The judiciary, which is independent of the other branches.
There are elections for the Bundestag every four years. The political parties with the largest share of votes are the CDU, with its sister party, the CSU, and the SPD.
Olaf Scholz ( SPD) is the current chancellor and has been in office since December 2021. The SPD party won a plurality of seats in the Bundestag during the 2021 elections and formed a coalition with Alliance 90/The Greens and the FDP. The governing coalition is committed to an ODA quota of at least 0.7% of Germany’s GNI and plans to channel 0.2% of the country’s GNI to so-called LDCs.
Under the Chancellery, which is responsible for determining policy guidelines, the BMZ sets development priorities. Development Minister Svenja Schulze ( SPD) has led the BMZ since December 2021.
The BMZ is organized across six Directorates-General. The regional subdivisions allocate Germany’s bilateral development assistance according to the BMZ’s strategy and priorities. Sectoral subdivisions formulate Germany’s sector strategies, interface with multilateral development institutions, and advise on bilateral programs.
Germany’s two major state-owned development agencies, the GIZ and KfW operate under the political supervision of the 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 the BMZ’s sectoral divisions through its ‘sector initiatives,’ or Sektorvorhaben.
- KfW leads on Germany’s bilateral financial cooperation with partner countries. It receives funding from the BMZ and raises its own funds on capital markets.
The BMF, led by Minister Christian Lindner ( FDP) develops caps for the federal budget and individual ministerial budgets. This makes it an important stakeholder when it comes to ODA levels, the BMZ’s budget, and long-term ODA contributions.
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The government’s 2021-2025 Coalition Agreement lists the following development priorities:
- Global Health, especially One Health and the fight against poverty-related and neglected tropical diseases;
- Global health R&D;
- Gender equality & SRHR;
- Agriculture, Climate, and Social Protection; and
- Multilateralism, Security, and strengthening relations with the African continent.
Since 2014, part of the BMZ’s budget has been channeled through ‘special initiatives’, programs spearheaded by the development minister. Theere are four special initiatives for 2023:
- Transformation of agricultural and food systems;
- Refugees and host countries;
- Stability and development in the MENA region; and
- Good employment for socially just change.
The BMZ has set out four focus areasfor its bilateral and multilateral development cooperation in 2023 and the following years:
1. Fighting the COVID-19 pandemic and its effects, preparing for future pandemics by supporting:
- Resilient health architecture;
- Access to vaccines and medical supplies;
- One health;
- Primary health care; and
2. Eradicating poverty and hunger by:
- Fighting the acute hunger crisis;
- Fostering sustainable nutrition systems;
- Limiting inequalities concerning the distribution of wealth, resources, and rights;
- Building social security systems; and
- Supporting vocational training and good jobs.
3. Supporting a just energy transition vis-a-vis:
- Expansion of clean and safe energy;
- Climate-just employment;
- Social-ecological transformation of the economy;
- Adaptation to climate change and loss and damage; and
- Climate-friendly cities.
4. Establishing a feminist development policy that foregrounds:
- Anchoring feminist principles and gender equality in nearly all (93%) of new BMZ’s programs by 2025;
- Strengthening political, social, and economic participation and equitable access to resources; and
- Promote gender mainstreaming in international and multilateral initiatives and institutions.
Global health is an important issue for Germany’s development policy and was highlighted in Germany's G7 and G20 presidencies in 2017 and 2022, respectively. In line with Germany’s strong international response to the COVID-19 pandemic, pandemic response and preparedness have been a focus since 2020. To this end, the BMZ established a new sub-division entitled Special initiative for pandemic and global health, pandemic prevention, One Health. Under Germany’s 2022 G7 presidency, a G7-Pact for Pandemic Readiness was initiated to strengthen and align efforts to bolster worldwide pandemic readiness.
Climate protection has been emphasized by the BMZ as a ‘cornerstone’ of German development policy and increased in focus in recent years. Within this sector, the BMZ focuses on supporting LMICs in climate change mitigation, especially through enhancing the energy transition in these countries. Germany entered into so-called ‘Just Energy Transition Partnerships’ with South Africa in 2021 and with Indonesia and Viet Nam in 2022.
German development minister Svenja Schulze ( SPD) set a feminist development policy as one of her main priorities when she took office in December 2021. Schulze prioritizes development projects that involve women on an equal footing wherever possible. In March 2023, the BMZ published a new strategy on feminist foreign policy. The strategy applies an intersectional approach specifically mentioning disabled people, Indigenous peoples, and the LGBTQ+ community.
Agriculture was one of the strategic priorities of former Development Minister Müller, who in 2014 launched ‘ONE WORLD - No Hunger,’ a special Initiative on food and nutrition security and rural development. The special initiative, now called ‘Transformation of agricultural and food systems,’ has been carried into the 2021-2025 legislative period under the development minister Svenja Schulze.
ODA to education, in line with Germany’s ‘special initiative’ on vocational training and jobs, prioritizes higher education and vocational training. These objectives are mainly supported through bilateral development cooperation.
According to the BMZ’s partnership model, introduced by the BMZ 2030 Reform, bilateral partner countries are categorized by different partnership models. As of March 2023, the BMZ cooperates bilaterally with 65 countries. With its bilateral partners, the BMZ is pursuing a joint long-term development goal. Part of these countries are so-called ‘reform partners,’ or countries with a focus on reforms. Bilateral partner countries in the EU neighborhood focused on political and economic transformation are considered ‘transformation partners’. ‘Global partners’ is a category composed mainly of MICs, where cooperation focuses on cross-border issues, such as climate change. With ‘nexus and peace partners’, the BMZ aims to work on the causes of conflicts and flight and promote stability and peace.
North Africa and SSA: The German government's development approach across the African continent focuses on promoting economic development and the creation of jobs, digitalization, climate mitigation, and participation of women.
In January 2023, the BMZ published its new Africa Strategy, called Shaping the future with Africa. It is an update of the previous government’s strategy Marshall Plan with Africa, published under Minister Gerd Müller in January 2017. The updated strategy aims to supplement the development goals set by the AU and its member states, work together with African partners on the global transformation toward a decent and secure life for all in an intact environment, and to cooperate visibly and in solidarity with Africa in times of crisis.
The strategy focuses on six thematic priorities:
- Sustainable economic development, employment, and prosperity;
- Overcoming poverty and hunger and building social security;
- Health and pandemic prevention;
- Feminist development policy and gender equality;
- Rule of law, democracy, human rights, and good governance; and
- Peace and security.
Latin America and Caribbean: The collaboration of the BMZ in Latin America and the Caribbean is largely focused on climate and environmental protection, as well as supporting just energy transitions. Indigenous communities and women thereby play a central role, in line with the BMZ’s feminist development policy. Columbia, Brazil and Mexico were the largest recipients of Germany’s ODA in the region in 2021.
Asia: Even though the SSA and MENA regions are priorities for the BMZ, Germany allocates the largest shares of its bilateral ODA to Asia. In Asia, the BMZ works mostly with regionally influential MICs including China, India, Indonesia, and Vietnam. The BMZ’s work in these countries seeks to address global issues such as climate change by leveraging their large populations, economic strength, and wealth of resources such as tropical forests, biodiversity, and commodities.
In December 2021, Svenja Schulze ( SPD) took office as the German Development Minister after serving as the Minister for the Environment under the last government from 2018-2021. Schulze focuses on implementing a feminist development policy, climate mitigation and loss and damage, and social security. Schulze also promotes the reform of the World Bank and a broader reform of the global financial architecture to better meet current needs, known under the Bridgetown Agenda. In 2022, her priorities were largely influenced by the war in Ukraine and its global effects, especially on food security.
The political discourse continues to be dominated by the Russian war of aggression in Ukraine and its domestic and international consequences. Three days into the Russian invasion of Ukraine, Chancellor Scholz announced the Zeitenwende, meaning "turning-point," or "watershed," including far-reaching policy shifts for Germany such as the creation of a EUR100 billion ( US$118 billion) special fund for the military to invest more than two percent of GDP on defense.
Overall, the German government advocates for a holistic approach to human security and supports multilateral solutions. The government’s security policy focuses on a triad of foreign, defense, and development policies. The BMZ initiated a platform to strengthen Germany’s engagement in the reconstruction of Ukraine in March 2023 and has set up an emergency program for Ukraine with a volume of EUR652 million ( US$686 million) (as of February 2023), which is expected to be further expanded throughout 2023 to address the increasing need for the reconstruction of Ukraine.
Under its latest G7 Presidency in 2022, Germany launched three initiatives:
- The GAFS, which aims to increase funding for and coordinate international efforts for food security;
- The G7 Pact for Pandemic Readiness, a global network of health experts, aims to strengthen and align efforts for worldwide pandemic readiness; and
- The Global Shield Against Climate Risk, which aims to scale up climate risk financing, improve climate resilience and preparedness, and promote the development of rapid solutions in the case of climate-related damages. The initiative is supported by the V20 was launched at COP27 in November 2022.
Germany’s ODA is sourced from the budgets of different ministries. The largest share of ODA comes from the BMZ, totaling 47% in 2020, the latest year for which total ODA data is available from the BMZ. The AA, which manages most of the funding for humanitarian assistance and UN peace missions, accounts for 14% of ODA. Another 6% is raised the KfW on capital markets, and 9% is the ODA-eligible share of Germany’s EU budget.
The federal budget for 2023 was finalized in November 2022 and projects spending worth EUR476.3 billion ( US$501.4 billion). This is a decrease of 3.9% (EUR19.5 billion or US$20.5 billion) compared to the federal budget in 2022. The decrease is driven by the government’s return to the constitutionally enshrined debt brake in 2023, which was suspended for the past three years due to extraordinary spending related to the COVID-19 pandemic and the Russian war in Ukraine.
The return to the debt brake and the decrease in the total budget also impacted spending for the BMZ. The BMZ’s 2023 budget stands at EUR12.2 billion ( US$12.8 billion), which is EUR193 million ( US$203 million) less than was allocated to the BMZ in 2022. The parliamentary budget process did not result in increases to the BMZ’s 2022 budget, but secured an increase compared to the government’s draft budget. The draft budget set BMZ spending at EUR11.1 billion ( US$11.7 billion) in 2023, which was EUR1.3 billion ( US$1.4 billion) less than in 2022. The amendments made by the parliament resulted in an additional allocation of EUR1.1 billion ( US$1.2 billion) for the BMZ in 2023.
Most of the EUR1.1 billion ( US$1.2 billion) increase is sourced from an additional budget envelope sitting outside the ministries’ core budgets. The ‘Budget Plan 60’ includes an envelope on ‘global crisis response’. This funding can be accessed to address acute global challenges, such as the COVID-19 pandemic or the Russian invasion of Ukraine. In total, the 2023 budget allocated EUR5 billion ( US$5.3 billion) for global crisis response from this plan. Of this, the AA also received an allocation of EUR1.0 billion ( US$1.1 billion). This leaves still some funding available for further crisis relief in 2023.
Multilateral spending saw large cuts in the Cabinet’s draft budget for 2023. Despite the increases negotiated in parliament, the multilateral budget envelope decreased by 19% from EUR3 billion ( US$3.2 billion) in 2022 to EUR2.4 billion ( US$2.5 billion) in 2023. This extraordinary drop is partly due to the expiration of ACT-A financing, which was previously financed partly through this budget line. Funding for bilateral cooperation stands at EUR5.8 billion ( US$6.1 billion) in 2023, marking a 7% increase from 2022 levels.
Additionally, the downward trend of the BMZ’s budget is anticipated to continue in the upcoming years from EUR10.7 billion ( US$11.3 billion) in 2024 down to EUR10.4 billion ( US$11.0 billion) in 2026, as foreseen in the mid-term financial planning published in June 2022 by the BMF. Therefore, the likelihood of Germany acheivingt he 0.7% ODA/GNI ratio in 2024 is uncertain, despite the government’s commitment to the target.
The BMZ’s budget (see table) is composed of different budget envelopes, including:
- The Bilateral development cooperation envelope includes budget lines for major regions and is broken down by annual allocations to specific country programs;
- The European development cooperation, UN, and other international organizations envelope includes budget lines for multilateral organizations related to climate change and biodiversity, global health multilaterals, and various UN programs; and
- The Multilateral development banks envelope includes contributions to the World Bank Group, as well as the AfDB and ADB.
The German government’s fiscal year runs from January to December. The chart depicts the regular budget decision-making process:
- February/March: Cabinet agrees on caps for federal and ministerial budgets. In March, the BMF publishes caps for the federal budget and individual ministerial budgets. At this point, major decisions on increases in ODA and overall funding allocations are made by key stakeholders, including the Finance Minister, with input from the BMZ. In 2023, the announcement of the budget caps was delayed due to disagreements in the budget negotiations.
- April-June: Negotiations within ministries. Ministries develop their budgets in April and submit them to the BMF. Allocations to individual international organizations are determined during this period. In parallel, between April and August, the BMZ plans its bilateral spending and multilateral funding envelopes.
- June: Draft budget and medium-term financial planning. The Cabinet negotiates the budget and publishes the final government’s budget draft in June before parliament’s summer break. Key players in this period are the Chancellery, the BMF, and the BMZ.
- September/Beginning of October: Parliamentary debates and proposed amendments. The first reading in Parliament takes place in early September. Parliament debates the budget until early November.
- September/October: Amendments reviewed and recommendations to committees. The Development Committee makes recommendations on budget amendments in September. In October, the BMZ’s budget is debated by the Development and Budget Committees.
- November: Amendments, decisions on each ministerial budget, and voting. Key stakeholders during this phase include the Budget Committee, which takes final decisions in November.
- December: The final budget draft is voted on in plenary and signed by the President.
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