Donor Profile

Italy

Last updated: May 13, 2024

Summary



ODA Spending 


How much ODA does Italy contribute?


In 2022, Italy spent a total of US$7.2 billion on ODA, making it the 7th-largest donor country among members of the DAC. In relative terms, Italy was the 21st-largest donor.


Italy’s ODA only represented 0.33% of the country’s GNI in 2022, putting it below the UN target of 0.7% and the DAC average of 0.45%.


Preliminary data for 2022 show that Italy spent US$7.2billion in ODA, marking an increase of 19% from 2021. However, the increase was due to a sharp increase in IDRCs. Excluding these costs, Italy’s ODA dropped by 1% from the previous year.



How is Italian ODA changing?


Following steady decreases between 2018-2020 due to a reduction in IDRCs, Italy’s ODA increased in 2021 and 2022 due to COVID-19 response and rising IDRCs.


Italy’s ODA/GNI ratio increased from 0.29% in 2021 to 0.33% in 2022. In the country’s 2018 Update to the Economic and Financial Document, Italy committed to gradually increasing its ODA to GNI ratio to 0.36% in 2020, to 0.4% in 2021, and 0.7% by 2030—targets Italy has not been on track to meet.


In November 2023, the Italian Parliament adopted a COP28 resolution, signed by 19 Italian MPs from all parties in the majority coalition, committing to the 0.7% ODA/GNI ratio with half of ODA dedicated to tackling climate change. This is also in line with the Italian government’s commitment to the 0.7% ODA to GNI ratio by 2030.


In 2022, Italy's Parliament voted to approve a budget for 2022-2026, which includes an increase in the international cooperation budget by EUR99 million ( US$104 million) for 2022, EUR199 million ( US$210 million) for 2023, EUR249 million ( US$262 million) for 2024, EUR299 million ( US$315 million) for 2025, and EUR349 million ( US$368 million) per year starting from 2026.


IDRCs have taken up a significant share of Italy’s ODA. In 2022, Italy spent US$1.6 billion or 22% of its total ODA on these costs, continuing an upward trend from 2020 and 2021.


The 2022 budget clarified the practice of counting IDRCs as funds for Italian ODA, in addition to counting the resources for hosting refugees and asylum seekers in their first 12 months in Italy. The unspent part of these funds intended for the reception of refugees and asylum seekers will be redirected from the Ministry of Interior to the Ministry of Foreign Affairs and International Cooperation.



Where is Italian ODA allocated?


Italy traditionally disburses most of its ODA multilaterally. On average, Italy directed 67% of its ODA to multilateral institutions between 2013-2022. However, between 2013-2017, Italy’s share of bilateral contributions increased due to the high costs associated with hosting refugees, a trend which has repeated itself since 2020.


In 2022, Italy channeled 48% of its ODA multilaterally, well above the 32% average of all members of the OECD DAC. Meanwhile, Italy provided 52% of ODA bilaterally, or US$3.9 billion. Of the US$3.9 billion in bilateral ODA, US$3.04 billion was direct bilateral funding and US$891 million was earmarked funding through multilaterals.



Bilateral Spending 


Italy’s bilateral contributions decreased significantly after 2017 but rebounded in 2021. Italy’s overall bilateral ODA increased from US$2.7 billion in 2021 to US$3.9 billion in 2022, marking a significant jump of 46%, including earmarked funding through multilaterals. The increase was partly driven by IDRCs, which rose from US$556 million in 2021 to US$1.6 billion. The cost of hosting refugees accounted for 41% of the 2022 bilateral total.


64% of Italy’s bilateral ODA is disbursed through the public sector, above the DAC average of 56%, followed by 20% to multilateral organizations as earmarked funding, in line with DAC average. Bilateral funding through multilateral organizations jumped in absolute terms from 2021-2022, most likely due to COVID-19 response but has declined in relative terms.


Italy provided the 88% of bilateral ODA in the form of grants in 2022, just below the DAC average of 92%, in part due to increasing earmarked contributions to multilateral organizations. Following a drop in grant proportion in 2020, it has climbed back up in 2021-2022.


Although Sub-Saharan Africa was a priority region for Italy’s bilateral development cooperation, receiving 37% or US$984 million in 2021, funding towards the region fell by 60% in 2022, with the region receiving US$402 million. Italy’s bilateral funding to the SSA region is now below the DAC average of 17%. However, according to the Programming and Policy Document, the SSA region remains a priority. A large share of Italy’s bilateral funding, 54% or US$2.1 billion, is unallocated by country and region.


On October 9, 2023, the Italian Joint Committee for International Development decided to raise resources allocated to bilateral cooperation by 60% in 2024, with 25% and 15% of remaining resources for 2024 to be given to emergency and multilateral interventions, respectively.



Multilateral Spending and Commitments 


Italy is a strong supporter of multilateralism, particularly health multilaterals. In recent years, Italy has increased its contributions to health multilaterals such as Gavi and the Global Fund.


Core contributions to multilateral organizations made up 48% of Italy’s ODA in 2022, above the DAC average of 32%. A large proportion is channeled to EU Institutions, which received close to US$2.5 billion of Italy’s ODA in 2022, or 69% of the country’s total contributions to the multilateral system. Other recipients of Italy’s multilateral ODA in 2022 included the World Bank Group (US$437 million, or 12%), UN agencies (US$235 million, or 7%), and regional development banks (US$117 million, or 3%).


Recent commitments to multilateral organizations are summarized below. 



Politics & Priorities


What is the current state of Italian politics?


Italy is a representative democracy with a parliamentary system. Elections take place every five years or in the event of a dissolution.


The last election was in September 2022. The center-right coalition led by Giorgia Meloni won the Italian political elections with 44% of the votes, making her Italy’s first female prime minister. Brothers of Italy led with more than 26%, up from just 4% in the last national election in 2018, supplanting Matteo Salvini’s League for Salvini Premier party as the driving force on the right. LSP took less than 9% of the vote, down from more than 17% in 2018. The other major conservative party, Silvio Berlusconi's Forza Italia, garnered around 8% of the vote.


Voter turnout was historically low, at just 64%, compared to 73% in the previous election. The right took full advantage of Italy's electoral law, which benefits parties that forge pre-ballot alliances. Centre-left and centrist parties failed to align, and even though they collectively won more votes, they received far fewer seats. The center-left Democratic Party received 19% of the vote, while the left-leaning, unaligned Five Star Movement received around 15%, exceeding pre-election expectations. The centrist coalition, Azione, led by former Prime Minister Matteo Renzi and Carlo Calenda, won almost 8%. Enrico Letta the head of the main opposition, PD said he would not contest the leadership in the next party congress. 


In February 2024, the European Commission estimated that Italy's GDP would grow by 0.6% in 2023, marginally below the Autumn 2023 forecast. Private consumption moderated, and investment slowed down considerably due to rising financing costs and the phasing out housing renovation tax credits. After decreasing by 0.3% in the second quarter, GDP increased in the third and fourth quarters, providing a marginally positive carryover into 2024. The GDP is expected to grow by 0.7%in 2024 and 1.2% in 2025.


The IMF also projected that Italian unemployment would fall to 8.8% in 2022 before rising to 9.3% in 2023. However, the reality seems rosier as the latest data in July 2023 shows unemployment at 7.6%. Inflation is expected to steadily decrease from an average of 5.9% in 2023 to 2% in 2024 and 2.3% in 2025.


Who is responsible for allocating Italian ODA?



Development cooperation is defined as an ‘integral and qualifying part’ of Italian foreign policy and builds on the following architecture:

  • Parliament is composed of the Chamber of Deputies and the Senate. They examine, amend, and vote on the draft budget developed by the government. The Foreign Affairs committees of both chambers give recommendations on ODA budget amendments, while the budget committees of both chambers make final decisions.
  • MAECI headed by Antonio Tajani since October 2022 is responsible for defining the strategic direction of Italy’s development policy. Within MAECI, the Vice-Minister of Foreign Affairs and International Cooperation plays a key role in overseeing the development of the ODA budget as well as the development of the triennial programming guidelines, which define the country’s development objectives and priorities.
  • MEF led by Giancarlo Giorgetti ( League for Salvini Premier) has joint control over the cooperation with and contributions to development banks as well as funds together with MAECI. MEF collaborates with MAECI on the ODA budget. The Directorate III on International Financial Relations is an important part of MEF, which consists of 10 specific offices that participate in informal government groups such as the G7 and the G20, and deal with development-related initiatives.
  • CICS, established in 2014, usually meets twice a year to approve the three-year programming guidelines and ODA budgets. CICS is chaired by the Prime Minister and is composed of the Minister and Deputy Minister of Foreign Affairs, as well as representatives from other ministries, including finance and the environment.
  • The Joint Development Cooperation Committee decides on operational issues, including all projects worth over EUR2 million ( US$2 million). It is chaired by MAECI and composed of the heads of MAECI’s DGCS and AICS. The current Director General of the DGCS is Stefano Gatti.
  • AICS develops, supervises, and implements Italy’s development programs. It was set up in January 2016 and is led by Marco Riccardo Rusconi since 2023.
  • CDP is a joint-stock company under public control, which provides technical and financial support to MAECI and AICS. It acts as the administrative manager of development financing, by signing agreements with the governments of partner countries or by managing Italian, European, international, and private sector funds. CDP itself can also finance development projects, using its own resources or private/public blending instruments.
  • The Mattei Plan’s Steering Committee, established in November 2023, is chaired by the Prime Minister and composed of all the ministers, with Foreign Minister Antonio Tajani acting as deputy chair. Other members include the representatives from Italy’s twenty regions and the heads of the Italian Trade & Investment Agency, the Italian Export Credit Agency, and CDP, as well as other State-participated companies and academic staff. This newly established entity will reside within the PM’s offices and be divided into a series of units better to manage each part of the Plan’s implementation. It will be headed by a coordinator, and support the Prime Minister in directing and coordinating the Plan, in addition to drafting an annual report to the Italian Parliament.
  • Embassies play a key role in programming bilateral funds. Allocations to partner countries are based on multi-year country programs developed by DGCS, in consultation with local technical units and embassies. At the country level, regional departments at DGCS’ headquarters develop and approve projects after consultation with the embassies.
  • Civil society is involved in the policy-making process mainly through the CNCS. It is a consultative body bringing together 50 members of different backgrounds, including private-sector organizations, CSOs, as well as public authorities, to provide feedback on the government’s development policies. The CNCS divides its work between three groups, namely ‘Agenda 2030’, ‘private sector’, and ‘migration and development’. Each group is supposed to meet every two months, but there has been public criticism that the Council remains largely inactive.

What are Italy's development goals?


Italy’s strategic priorities for development cooperation are spelled out in the three-year Programming and Policy Document and Directions for Italian Development Cooperation, developed by MAECI. The most recent document for 2021-2023 confirms Italy’s focus on the African continent and on mitigating the root causes of migration and displacement as well as health, education, agriculture, food security, nutrition, and environmental protection. The priority intervention areas center around five strategic pillars:


  • People, which includes food security, sustainable agriculture, health; education, cultural and natural heritage, promoting sustainable tourism, social, economic, and political inclusion, and migration;
  • Planet, foregrounding protection of the environment, management of natural resources and the fight against climate change and access to reliable and sustainable energy;
  • Prosperity, which comprises inclusive and sustainable economic growth and decent work;
  • Peacebuilding for democracy, effective and responsible institutions, rule of law and human rights for all; and
  • Partnerships supporting the mobilization of domestic resources; debt relief and restructuring; promoting triangular cooperation and public-private partnerships; engaging civil society actors; and strengthening statistical skills.

On January 28-29, 2024, Italy hosted the Africa-Italy Summit, chaired by the Italian Prime Minister Giorgia Meloni, during which 25 African leaders and diplomats joined Italian and EU leaders to launch the pilot programs of Italy's flagship foreign policy initiative, also known as the Mattei Plan for Africa.

Meloni announced EUR5.5 billion (US$6 billion) in credits, grants, and guarantees under the plan. EUR3 billion (US$3.3 billion) will come from the Italian Climate Fund, as announced at abbr:COP28, and EUR2.5 billion (US$2.7 billion) will come from the newly created multilateral fund at the AfDB. The Plan identifies a set of countries in SSA and North African regions for the implementation of projects, and focuses on the following priorities:

  • Education and training;
  • Agriculture;
  • Health;
  • Energy; and
  • Water.

On November 3, 2023, the Italian Council of the Ministries approved the decree that defined the governance and the scope of the four-year Mattei Plan.

The Mattei Plan will aim to strengthen collaborative initiatives between Italy and African states to identify, define, and implement initiatives in the following areas:

  • International cooperation;
  • Imports, exports, and the promotion of investments;
  • Education, R&D, and innovation;
  • Global health;
  • Agriculture and food security;
  • Sustainable supply and use of natural resources, including water and energy;
  • Environmental protection and adaptation;
  • Modernization of infrastructure, including digital infrastructure;
  • Support for entrepreneurship, in particular, youth and women's entrepreneurship;
  • Tourism and culture; and
  • Prevention and countering of irregular migration and management of legal migration flows.

On July 23, 2023, Italy hosted the first International Conference on Migration and Development in Rome, Italy.

More than 20 leaders from the southern shores of the Mediterranean, the Middle East, and the Gulf participated. Also in attendance were leaders of EU port-of-entry states, partners from the Sahel and the Horn of Africa, various heads of European institutions, and heads of international financial institutions. The conference discussed and addressed roots causes of and responses to increased migration flows.

The Italian government declared the main objectives of the conference as:

  • Managing migration flows;
  • Bolstering the fight against human trafficking; and
  • Promoting the economic development of vulnerable countries to tackle migration at the source.

AICS, which manages Italy’s bilateral development cooperation, focuses development cooperation in five thematic areas:

  • Economic development and opportunities;
  • Human development, including health, education, gender equality, and disabilities;
  • Environment and use of natural resources;
  • Rural development and food security; and
  • Conflict-affected and fragile states.  

By issue 


Global health is a key issue for Italy. Food security is another priority for Italy in light of the COVID-19 crisis. Italy is promoting the ‘One Health’ approach, which puts forth the interdependency between human and animal health as well as its linkage to the health of entire ecosystems.

Read more about Italy’s ODA to Global Health


Agriculture is a key issue for Italy, especially with major UN food and agriculture organizations based in Rome.

Read more about Italy’s ODA for Agriculture


Climate and gender equality: Climate change and gender equality are prioritized in Italy’s development cooperation. However, funding levels remain moderate.

Read more about Italy’s ODA for Gender Equality

Read more about Italy’s ODA for Climate Change


Education is not a major priority for Italy. However, the issue is largely related to Italy’s work in gender equality.

Read more about Italy’s ODA for Education


By region 


Due to Italy’s geographic location as the first port of call for many refugees entering Europe, the country’s development priorities include a strong emphasis on tackling the root causes of migration, particularly in the African continent. However, Italy has not yet adopted the Global Compact on Migration, an intergovernmental agreement prepared by the UN that lays out objectives to facilitate legal migration.


Budget 


What are the details of Italy's ODA budget?


Italy’s budget documents indicate that the country would spend EUR6.3 billion ( US$6.6 billion) on ODA in 2024, a slight increase from 2023.


MEF manages the largest part of Italy’s ODA budget in 2024, 41% or EUR2.6 billion (   US$2.7 billion). The MEF mainly contributes to Italy’s development funding through contributions to the EU's general budget, which includes the DCI.


The Ministry of the Interior controls the portion of the  ODA  budget, EUR1.5 billion ( US$1.6 billion), allocated for spending on refugees and migration-related issues.


MAECI  manages 19% of the ODA budget in 2024 at EUR1.2 billion ( US$1.3 billion), a decrease from 2023. The main development assistance-related budget envelope within MAECI is program 4.2, ‘Development Cooperation’. It comprises ‘chapters’ of funding to AICS  (EUR647 million, or US$681 million in 2024), and contributions to the EDF. It also includes several ‘chapters’ of contributions to the UN and other multilaterals.


 


How does Italy determine its ODA budget?


Parliamentary budget discussions run from October to December, and overall ODA levels are set from February to June. Italy's fiscal year corresponds to the calendar year.



In addition to the regular budget process, the government usually issues a Decree known as the 'Milleproroghe Decree’ in February. It uses this decree to finance additional measures in the next budget year, relating to any budgetary issue. Parliament examines and may amend the Decree from January-February. This typically provides an additional opportunity for interest groups to influence the ODA budget.   


The Donor Tracker team, along with many DAC donor countries, no longer uses the term "foreign aid". In the modern world, "foreign aid" is monodirectional and insufficient to describe the complex nature of global development work, which, when done right, involves the establishment of profound economic and cultural ties between partners.


We strongly prefer the term Official Development Assistance (ODA) and utilize specific terms such as grant funding, loans, private sector investment, etc., which provide a clearer picture of what is concretely occurring. “Foreign aid” will be referenced for accuracy when referring to specific policies that use the term. Read more in this Donor Tracker Insight.

Our Italy Experts

Tanvee Kanaujia

Tanvee Kanaujia

Associate Consultant