Last updated: September 27, 2023
Sweden was the 8th OECD DAC donor in 2021. OECD 2022 preliminary figures show Sweden as the 9th largest DAC donor that year.
Sweden is the third-largest donor relative to its economy: the country spent 0.92% of its GNI on ODA in 2021. According to the 2022 OECD preliminary updates, they moved up to the second-largest DAC donor in relative terms, spending 0.9% of their GNI.
Sweden’s commitment to development cooperation remains one of the strongest in the world. Sweden held on to first place in the Center for Global Development’s 2021 ‘Commitment to Development Index.’
Sweden has a long history of providing development assistance and, since 1975, the country has exceeded the UN target of 0.7% of GNI for ODA. However, in September 2022, Sweden's new right-wing government announced that it was ending the country's commitment to spend at least 1% of its GNI on ODA. Instead, Swedish ODA will be decoupled from a specific funding target and set at a fixed amount for three years to make spending more predictable.
The government’s 2023 budget sets the ODA budget at SEK56 billion, or US$5.5 billion, annually in 2023-2025, which represents 0.88% of projected GNI.
Between 2014 and 2022, the cost of hosting refugees in Sweden accounted for a large share of the country’s reported ODA, peaking at US$2.7 billion in 2015 (34%), before gradually dropping to a decade low of US$88 million in 2021 (2% of total ODA). While these costs were likely to remain low going forward, Russia’s sudden invasion of Ukraine means that Sweden’s funding for refugee costs might experience a surge.
The 2023 budget sets an 8% cap for the use of Sweden’s development budget to cover in-country refugee costs.
The budget also highlights that Swedish ODA will be redirected from multilateral organizations to civil society. In addition to increased support to Ukraine, Sweden’s humanitarian assistance will increase. ODA will promote Agenda 2030; poverty reduction and health initiatives for the most vulnerable; support for human rights defenders and champions of democracy; expanded and streamlined climate assistance; and women’s and girls’ rights and opportunities, including improved SRHR.
Sweden has traditionally been a strong supporter of multilateral systems, although this support, especially for the UN system, has been declining. Sweden's right-wing government has indicated that it plans to redirect funding from multilateral organizations to CSOs.
Support for multilateral organizations is composed of earmarked funding channeled through multilateral organizations for specific sectors or regions as well as core funding to multilaterals.
In 2021, nearly 60% of their total ODA was disbursed as a combination of core contributions to multilaterals (34%) and earmarked funding channeled through multilateral organizations (26%)
Sweden channels a third of its bilateral ODA through CSOs, well above the DAC average of 17%. The government recognizes CSOs’ key role in reducing poverty, strengthening democratic development and supporting human rights.
Virtually all of Sweden’s ODA consists of grants (97% in 2021). The remaining 3% (US$117 million) is made up of capital subscriptions (equity investments) by the MFA into Swedfund, Sweden’s state-owned development finance institution.
In 2021, the largest share of bilateral ODA went to the ‘government and civil society’ sector (21% of bilateral ODA, or US$825 million, down from US$881 million in 2020). More than half of the funding in this area goes to projects supporting democratic participation or human rights. These areas remain salient for Sweden, especially following multiples instances of democratic backsliding, aggravated by the pandemic. Several cooperation strategies have received additional human rights funding to combat the increased repression of civil liberties during the pandemic.
Humanitarian assistance remains a growing funding area for Sweden, with a particular focus on conflict-affected areas. Accounting for 15% of bilateral funding, humanitarian assistance was the second-largest spending area of Sweden’s bilateral ODA in 2021. Funding to the sector has steadily increased in recent years, growing by 55% from US$271 million in 2017 to US$421 million in 2021. The 2022 budget set the overall funding level for humanitarian assistance at SEK4.5 billion ( US$444 million) but actual spend is likely to be much higher, driven by humanitarian support to Ukraine, of which Sweden has so far decided to increase by SEK600 million ( US$60 million).
Driven by COVID-19 related support, the health sector saw a 13% increase in bilateral funding in 2021, making it the third largest sector (11% of total bilateral funding).
The 2016 Policy framework for Swedish development cooperation and humanitarian assistance states that bilateral funding must be focused on the lowest-income and most vulnerable countries. This policy is backed by funding data: nearly a third (31%) of Sweden’s bilateral ODA was allocated to LICs in 2021. Sweden has recognized that an increasing proportion of global poverty is found in MICs, but the government is likely to continue to strengthen its focus on fragile states.
Sweden financially supports multilateral organizations both through core contributions (34% of total ODA in 2021, or US$2 billion) and through earmarked funding through multilaterals (26%, or US$1.5 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 MFA, Sida, and Swedish embassies.
Sweden has traditionally been a strong supporter of the UN, with 35% of core contributions to multilaterals in 2021 having gone to the UN. Sweden supports UN reform efforts and pushes its ‘women, peace and security’ agenda. Its priorities in the UN include conflict prevention, peacebuilding, gender equality, global development, climate, and human rights. Despite this longstanding support, Sweden’s right-wing government has signaled it intends to redirect funding from multilateral organization to CSOs.
Recent commitments to multilateral organizations are summarized below.
Sweden is a parliamentary democracy. At the national level, the people are represented by the Riksdag (Swedish parliament) which has legislative power. The government implements the Riksdag's decisions and draws up proposals for new laws or amendments. There are general elections every four years. The three dominant political parties are the Swedish Social Democratic Party, the Moderate Party, and the Sweden Democrats.
Prime Minister Ulf Kristersson of the Moderate Party took office in November 2022. Kristersson leads a right-wing coalition government encompassing the Liberal and Christian Democratic Parties, supported by the right-wing, anti-immigrant (as noted by Swedish media and political watchdogs) Sweden Democratic Party in parliament.
Minister for Foreign Affairs Tobias Billström (Moderate Party) presented Sweden's Statement of Foreign Policy, which summarizes the government’s ODA priorities, to parliament on February 15, 2023. Ukraine will remain a Swedish foreign and development policy priority. In 2023, the country is expected to become the largest recipient of Swedish bilateral development assistance.
Sweden also aims to use ODA as a lever to strengthen countries’ democracy and participation in the international economy. Sweden has an ambition to make ODA more focused, relevant, effective, and transparent. Objectives will be set in terms of quality and results.
In addition to support for Ukraine, ODA will prioritize poverty reduction and health initiatives for the most vulnerable, humanitarian support, democracy and human rights, enhanced climate action, and initiatives for the rights and opportunities of women and girls.
The government’s 2016 ‘Policy framework for Swedish development cooperation and humanitarian assistance’ outlines the overall objectives of Swedish development cooperation and sets eight focus areas:
- Human rights, democracy, and the rule of law
- Gender equality
- The environment and climate change, and the sustainable use of natural resources
- Peace and security
- Inclusive economic development
- Migration and development
- Health equity
- Education and research
Sweden defined three objectives in its 2018-2022 ‘Strategy for development cooperation in the areas of human rights, democracy and the rule of law’:
- Inclusive democratic societies
- Equal rights for all
- Security, justice, and accountability
Conflict prevention and humanitarian assistance are also seen as key priorities. 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 Policy framework for Swedish development cooperation and humanitarian assistance, but there is a focus on strengthening cooperation and increasing synergies between humanitarian initiatives and long-term development cooperation.
Given the new government’s particular focus on immigration, development assistance policy will focus on counteracting irregular migration, increasing repatriation, and effectively contributing to voluntary returns. Development assistance will also encompass effective measures ‘to reduce the root causes of migration.’
Synergies will be strengthened between Sweden’s global trade, export promotion and ODA policies. Sweden has therefore named a single minister responsible for development assistance and foreign trade. The incoming minister for development assistance and foreign trade has also been given special responsibility for Sweden’s support to the reconstruction of Ukraine.
In an interview on June 6, 2023, Swedish Minister for International Development Cooperation and Foreign Trade Johan Forssell stated the government's ambition to bring increase private sector involvement in development policy. Forssell emphasized the need for a modern approach to development, where trade and assistance are seen as two sides of the same coin.
Gender Equality: Sweden, a longstanding champion of gender equality, was the first country to implement an explicitly feminist foreign policy in 2014. The country’s right-wing government has announced it will not continue implementing this policy because, according to the new minister of foreign affairs, “the label obscures the fact the Swedish foreign policy must be based on Swedish values and Swedish interests.” Gender equality is nonetheless expected to remain a development priority. In 2023, Sweden sought to leverage its influence on gender equality through its EU presidency during the first half of the year.
Sweden published its first development cooperation 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$109 million) for 2018-2022.
Climate: Sweden is also committed to environmental protection and resilience, and disaster risk reduction, with a special emphasis on marine resources. In its 2018 Strategy for development cooperation in sustainable environment, climate and marine resources, and sustainable use of natural resources the government set aside SEK6.5 billion ( US$747 million) to promote progress in these areas between 2018 and 2022. This focus is also demonstrated at the multilateral level; Sweden is the largest per-capita donor to both the GEF and GCF. Sweden committed SEK2 billion ( US$217 million) to GEF for 2018-2022 (50% increase in SEK compared to 2014-2018) and almost doubled its contribution to GCF to reach SEK8 billion ( US$869 million) for 2020-2023. In October 2021, the Swedish government announced plans to double its climate development assistance budget to SEK15 billion ( US$1.8 billion) by 2025, compared with 2019 levels.
Global health, agriculture, and education are key development focus areas for Sweden, but are not prioritized within policy.
Sub-Saharan Africa: SSA was the recipient of over a third of Sweden’s bilateral ODA in 2021 (35%). In February 2022, Sweden adopted a new regional strategy for development cooperation with Africa, which will focus on strengthening regional cooperation and integration in environment and climate, democracy and human rights, migration and development, economic integration, and peaceful and inclusive societies. The new strategy covers SEK4.7 billion ( US$464 million in 2022 prices) in total for the period 2022-2026.
Sweden’s new right-wing government’s 2023 budget introduces a new framework with a fixed ODA amount (SEK56 billion, or US$5.5 billion, annually) set for three years (2023-2025), which is decoupled from GNI, but represents 0.88% of projected GNI.
Within the 2023 budget, Budget Area 7: ‘International assistance’ covers SEK47.2 billion ( US$4.6 billion, or 84% of the ODA frame), while SEK8.8 billion ( US$870 million,) covers all additional costs. These remaining costs mainly consist of assessed contributions to the EU (SEK3.4 billion, or US$336 million), in-donor refugee costs (SEK4.2 billion, or US$415 million), and MFA management costs (SEK471 million, or US$46.5 million).
'Budget Area 7’ includes all funding managed by Sida. This funding is divided into seven areas:
- Bilateral cooperation (including regional and country strategies)
- Thematic cooperation
- Humanitarian assistance
- Funding for Swedish CSOs
- Research cooperation
- Capacity development and agenda 2030
- Information and communication
Bilateral cooperation programs are guided by regional and country strategies, which define indicative budget allocations and focus on specific geographies. These strategies are developed by the MFA, with input from Sida and the various embassies, and are 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.
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.
- The Sida develops its draft budget: By March 1 of the year before a budget comes into force, Sida submits its draft to the 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.
- The 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.
- The government presents the 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 15.
- Parliament debates and amends the 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 Budget Area 7 which covers the ‘international assistance’ budget line, including 90% of the ODA Frame. Usually, under a minority government such as the current one, the government must negotiate closely with the opposition.
- Parliament votes on the budget bill: In mid-December, 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.
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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.
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