At a glance
- Norway is the tenth-largest donor country, spending US$4.3 billion on official development assistance (ODA) in 2018.
- Norway the third-largest donor in proportion to the size of its economy. In 2018, ODA stood at 0.94% of Norway’s gross national income (GNI). There is a cross-party consensus to maintain ODA at around 1% of GNI, but in 2018, this target was not met due to Norway’s economic performance, which was better than estimated in the budget.
- Lower costs of hosting refugees in Norway have been driving decreases in ODA. After falling by 11% between 2016 and 2017, these costs decreased by another 4% between 2017 and 2018. Excluding refugee costs, Norway’s ODA increased by 2% from 2016 to 2018. In-country refugee costs are set at 2% of total ODA budget for 2020, well below peak levels (2016: 18%).
- The government’s 2020 ODA budget stands at US$4.8 billion (NOK39.2 billion), the largest ODA budget to date.
- The Sustainable Development Goals (SDGs) are very important for the government, and are the basis of its development policy. To engage effectively with the Norwegian government, it is thus important to frame suggestions within the SDG framework.
- In an action plan from 2019 , the government spells out five sectoral priorities: 1) education 2) health, 3) private-sector development, agriculture and renewable development, 4) climate change, the environment and the oceans, and 5) humanitarian assistance.
- The government identifies four cross-cutting issues for its development policy: 1) human rights, 2) women’s rights and gender equality, 3) climate change and the environment, and 4) the fight against corruption. Among these, gender equality is a top focus.
- Norway’s commitment to spend 1% of its GNI on development cooperation means that the increases in ODA volume are closely linked to Norway’s economic growth.
- Thematic priorities are likely to remain unchanged for the rest of the current government’s term. In power since 2013, Prime Minister Erna Solberg will continue to head a coalition composed of her Conservative Party, joined by the Liberal Party and the Christian Democratic Party in 2018 and 2019. The next election is set to be held in 2021.
- In 2020, Norwegian ODA management was reformed to increase transparency and bring a clearer division of labor between different stakeholders. Norad, the Norwegian Agency Development Cooperation, was strengthened, with increased funding and extended remit.
Norway is committed to continue spending 1% of its GNI on ODA
Norway is the third-largest donor in relation to the size of its economy among members of the OECD Development Assistance Committee (DAC). In 2018, it spent 0.94% of its GNI on development cooperation (US$4.3 billion). In absolute terms, this makes Norway the tenth-largest DAC donor.Norway has reached the United Nations (UN) 0.7% ODA-to-GNI target since 1976 and is committed to maintain spending at about 1% of its GNI. This target has cross-party backing. Norway managed to meet the 1% commitment every year between 2013 and 2017. In 2018, ODA fell slightly below the target threshold because, according to government, Norway’s economy performed better than predicted by estimates used in the state budget.
ODA decreased by 4% between 2017 and 2018 due to lower spending on in-country refugees. (Some of the costs associated with hosting refuges are reportable as ODA.) This follows a 11% decrease in ODA between 2016 and 2017, also driven by shrinking refugee costs, which at their peak in 2016, made up 18% of total ODA. In the past, these costs have impacted development funding in two major ways: 1) funds were reallocated from development programs, and 2) reported ODA increased, driven by additional refugee-related costs outside of the ODA budget. These costs have decreased to 1 to 2% of ODA between 2018 and 2020, and are expected to remain low going forward.
ODA volumes are closely linked to Norway’s economic growth due to the 1%-to-GNI target. The budget for 2020 is the largest to date, with ODA set at NOK39.2 billion (US$4.8 billion). This represents a 4% increase from the ODA budgeted for 2019. Additional funding will target the country’s five main thematic priorities: 1) education, 2) health, 3) private-sector development, agriculture and renewable development, 4) climate change, the environment, and oceans, and 5) humanitarian assistance. In the 2020 state budget, the government announced its intention to intensify Norway’s work promoting the sustainable development goals (SDGs) and its climate-related efforts, with an emphasis on the fight against hunger and poverty.
In 2019 and 2020, debate around Norway’s development cooperation revolved around the use of ‘vertical’ multilateral funds (multilateral organizations that have a narrow focus on one or a few specific issues). Norway is a strong supporter of multilateral organizations and the government considers vertical funds an effective way to pursue its priorities internationally. Critics — mainly members of the Norwegian academia and members of the opposition in government — have argued that while they are effective, the focus of such funds is often too narrow (e.g., on vaccination or on specific diseases) and leads to fragmentation within sectors (e.g., global health). In addition, they warn that use of these funds might lead Norway to lose control over its own funding. The government nonetheless, has reiterated its support for ‘vertical’ multilateral funds.
Unless otherwise indicated, all data in this section is based on the grant-equivalent measurement system. For more information, see our Donor Tracker Codebook.
The SDGs guide Norwegian ODA policy; Climate change, education and humanitarian assistance are top priorities
The Norwegian government has based its development policy on the UN’s Sustainable Development Goals (SDGs), ensuring alignment with global priorities.
Norway’s development policy priorities are spelled out in the Ministry of Foreign Affairs’ (MFA’s) white paper, ‘Common responsibility for a common future – the Sustainable Development Goals and Norwegian Development Policy’, published in 2016. They include:
- Global health
- Humanitarian assistance
- Private-sector development, agriculture, and renewable energy
- Climate, environment, and oceans.
These priorities are also reflected in the 2020 budget (see box) and additional funding since 2017 has mainly been directed towards these areas.
Norway’s development priorities in 2020:
- Humanitarian assistance: Norway’s funding for humanitarian assistance is steadily increasing. A record NOK5.5 billion (US$678 million) is budgeted for humanitarian assistance for 2020.
- Global health: Global health is a long-standing priority of the Norwegian government, which plans on sustaining high levels of funding to the sector until 2030. Focus is on non-communicable diseases, women’s and children’s health, sexual and reproductive health, universal health coverage and global health security.
- Education: Education funding focuses on children in crisis and conflict areas and girls’ and women’s education. Norway fulfilled its commitment to double spending between 2013 and 2017, reaching NOK3.4 billion (US$417 million) in 2017.
- Climate, environment and oceans: A total of NOK5.2 billion (US$639 million) has been budgeted for this sector in 2020 — a NOK500 million increase (US$61 million) from 2019.
The Norwegian government’s commitment to climate change, the environment, and oceans is reflected in its substantial funding for the issue. One of its largest programs is the Norwegian International Climate and Forest Initiative (NICFI), under which it has pledged up to NOK3.0 billion (US$369 million) per year to reduce deforestation. Norway is also a strong supporter of multilateral organizations for climate. The country increased its support to the United Nations' Environment Program (UNEP) in 2019, to NOK360 million (US$44 million). In February 2020, the government announced a doubling of its annual contribution to the Green Climate Fund (GCF) between 2020 and 2023, reaching NOK800 million (US$98 million) per year. The government has also allocated NOK517 million to it in 2020 (US$64 million) to promote sustainable oceans and support measures to combat marine litter.
Since 2013, the successive governments of Prime Minister (PM) Erna Solberg have placed a focus on education, and particularly on girls’ and women’s education. Between 2013 and 2017, funding to the sector doubled, reaching NOK3.4 billion (US$417 million) according to the government. Funding has remained high since then (NOK3.7 billion in 2020 or US$451 million). Within education, priority areas for 2020 include, enhancing opportunities for women and girls to complete high quality, free and equal primary and secondary schooling, gender equal access to higher education (incl. university education) and to good technical and vocational training, as well as learning opportunities for children in crisis and conflict situations. Norway provides strong support to the Global Partnership for Education (GPE). It committed NOK2.1 billion (US$276 million) for 2018 to 2020, the third-largest pledge by any donor.
Education is the flagship priority of the government and global health is a lonstanding focus
Norway regards education as an explicit component of its humanitarian assistance policy and shows international leadership in the area. It is one of five founding donors to the Education Cannot Wait (ECW) initiative, a special fund launched in 2016 that aims to improve access to education services in humanitarian emergencies and crises. In 2019, the government pledged a total of NOK520 million (US$64 million in 2018 prices) to ECW. In addition, the government announced an NOK75 million (US$9 million) to support comprehensive sexuality education in partner countries.
Humanitarian assistance is another growing focus area. Norway’s humanitarian budget has increased 68% since 2013, according to the government. The 2020 budget outlines a total of NOK5.5 billion (US$678 million) in funding for humanitarian assistance, the most to date. The government’s 2018 humanitarian strategy emphasizes the connection between long-term development assistance and emergency humanitarian activities, proposes an integrated and rights-based approach, and promotes effective, flexible, and predictable funding. Norway’s multi-year pledges include a NOK10.0 billion (around US$1.2 billion) allocation for Syria and its neighboring countries for 2016 to 2020, and NOK1.7 billion (US$203 million) for the Central Emergency Response Fund (CERF; 2018 to 2022).
Global health has been a longstanding priority for Norway, and this focus has been maintained under the current government. Funding levels are set at NOK3.7 billion (US$454 million) for 2020, according to the budget. The bulk of Norway’s financing to the sector is channeled through multilateral organizations, with Gavi, the Vaccine Alliance (Gavi), the Global Fund to Fight AIDS, Tuberculosis, and Malaria (Global Fund), and the Global Financing Facility (GFF) as major partners. In the fall of 2019, the government launched its strategy ‘Better Health, Better Lives’, which focuses specifically on combatting non-communicable diseases within its development cooperation (2020 to 2024).
Civil society and human rights is another large priority for Norway, receiving substantial amounts of funding (see ‘ODA breakdown’).
Other relevant development strategies (white papers):
- Global health (2012)
- Fair distribution and growth (2013)
- Global education (2014)
- Private-sector engagement in development cooperation (2015)
- Human rights in development policy (2015)
- Equality and foreign development policy (2016)
- Humanitarian strategy (2018)
- Non-communicable diseases (2019)
- Eliminating harmful practices (2019)
- Norway’s role and interest in multilateral cooperation (2019)
Norway heavily relies on multilateral organizations and CSOs to channel its ODA
Norway is a strong supporter of multilateral organizations. It channels a quarter (24% in 2018) of its ODA as core contributions to multilateral organizations, significantly below the 41% average among members of the OECD Development Assistance Committee (DAC). However, Norway chooses to channel much of its multilateral funding in the form of earmarked funding through multilaterals (reported as bilateral ODA to the OECD). When considering these, a total of 56% of Norwegian ODA flows through the multilateral system (up from 54% in 2017). This is slightly above the DAC average of 55%.
Alongside multilaterals, civil society organizations (CSOs) are a key implementer of Norwegian ODA. In 2018, 26% of Norwegian bilateral ODA was channeled through CSOs (DAC average: 18%).
Norway’s bilateral funding is in line with its overall priorities
Norway’s strategic priorities are largely reflected in its funding allocations. According to OECD data, in 2018 16% (US$514 million) of bilateral ODA went to humanitarian assistance. Although funding to the sector has remained high, 2018 was the first year since 2012 that flows for humanitarian purposes decreased.
In line with Norway’s priorities, the sector to receive the second largest share of bilateral ODA was environmental protection (13% or US$436 million). These were followed by funding for projects supporting government and civil society (12% or US$377 million), and education (11% or US$374 million). Global health was the fifth-largest sector, receiving 8% of ODA (US$271 million) in 2018.
In recent years, private sector development and job creation have become more important to Norway’s development cooperation. This is reflected in increased ODA for financial services and business support (from US$92 million in 2012 to US$232 million in 2018, a 152% increase in real terms according to OECD data). Much of Norway’s support to economic development goes through Norfund, a state-owned investment fund supporting private-sector activities in partner countries, whose investments are not ODA-eligible.
Since 2014, Norway has provided all its bilateral ODA in the form of grants.
Norway differentiates partners for long-term development cooperation and partners for conflict prevention
Norway’s ODA is mostly directed towards low-income countries, although this is not immediately evident from the ODA data. Due to earmarked funding to multilaterals, support to CSOs, and spending on in-country refugees, the share of Norway’s bilateral ODA reported as not allocated to a specific country was 54% in 2018. This means that low-income countries officially accounted for a quarter only of bilateral ODA (25% in 2018). However, when only considering bilateral ODA allocated to specific countries, they received over half (54%) of all bilateral ODA.
Geographically, sub-Saharan Africa receives by far the largest share of Norway’s bilateral ODA (22% in 2018, according to OECD data), followed by the Middle East and North Africa (MENA) region (13%), and Asia (9%). Funding to the MENA region nearly doubled between 2013 and 2017, reaching US$480 million, before slightly decreasing in 2018 (US$415 million). This was driven by strong increases in humanitarian assistance to the region until 2017.
According to the Ministry of Foreign Affairs (MFA)’s 2017 white paper on the Sustainable Development Goals (SDGs), Norway focuses its bilateral cooperation on 16 countries, with the aim to pursue a holistic and cross-sectoral approach to development in each of its partner countries. It outlines two categories of partners:
- Partners for long-term development cooperation, with which Norway already has a long-standing engagement: Colombia, Ethiopia, Ghana, Indonesia, Malawi, Mozambique, Myanmar, Nepal, Tanzania, and Uganda.
- Partners for stabilization and conflict prevention as Norway aims to reinforce its overall efforts in vulnerable states, with a holistic and long-term perspective. These include Afghanistan, Mali, Niger, Palestine, Somalia, and South Sudan.
In addition, Norway will continue to provide humanitarian assistance to other ODA-eligible countries as needed.
Norway differentiates long-term development cooperation partners and conflict-prevention partners.
Norway is a strong supporter of the multilateral system
Norway’s government considers funding through multilateral organizations an effective way to pursue its priorities. Norway supports multilateral organizations both through large core contributions (US$1.0 billion in 2018 or 24% of its total ODA) and through significant earmarked funding amounts channeled through multilateral organizations for specific sectors or regions (US$1.4 billion or 32% of total ODA). This brings Norway’s total multilateral ODA to US$2.4 billion or 56% of its total ODA, putting it slightly above the OECD DAC average of 55%. Funding channeled through multilateral institutions has increased by an annual average rate of 5% between 2014 and 2018 (it was US$1.9 billion in 2014). Guidelines for Norway’s multilateral policy were published in 2019 in a MFA white paper titled ‘Norway’s Role and Interest in Multilateral Cooperation’.
Norway strongly supports the UN system. UN agencies received 43% of Norway’s core contributions to multilateral organizations in 2018. 12% went to the World Bank, and 11% to regional development banks. The current government also strongly supports vertical funds, especially in the global health sector. Key partners for Norway’s multilateral ODA include the Global Fund, Gavi, and the Global Financing Facility (GFF). Opposition parties have voiced criticism of these funds, and called for a more holistic approach, especially to global health.
Unless otherwise indicated, all data in this section is based on the grant-equivalent measurement system. For more information, see our Donor Tracker Codebook.
MFA steers strategy; Norad’s role strengthened after a 2020 reform
Norway’s coalition government is led by Prime Minister (PM) Erna Solberg. Solberg is a member of the Conservative Party (H), which has held power since 2013 and was most recently re-elected in October 2017. The Liberal Party (V) joined the ruling coalition in January 2018, and the Christian Democratic Party (KrF) joined in January 2019 after a year of cooperation with the government on an ad-hoc basis. The Progress Party left the coalition in January of 2020. The government is now a minority government and is dependent on support of various parties in the Parliament.
The Ministry for Foreign Affairs (MFA) is responsible for setting the strategic direction of development cooperation. Since October 2017, it has been led by former Minister of Defense Ine Eriksen Søreide (H). In January 2018, the minister of the European Economic Area and EU affairs within the MFA was replaced with a Minister of International Development, who is a co-minister to the Minister of Foreign Affairs. Dag-Inge Ulstein (KrF) has held this position since January 2019 and is thus in charge of development policy. In February 2020, Norway’s first-ever Ministry of Sustainability was created to coordinate the government’s work on the SDGs.
The MFA is responsible for the organization, coordination, and implementation of Norwegian foreign policy, including international negotiations, processes and global cooperation structures (e.g., United Nations, UN). It is also responsible for development cooperation within members of the Organization for Security and Co-operation in Europe (OSCE), Middle East, North Africa and Afghanistan, as well as humanitarian assistance.
Other relevant ministries include the Ministry of Climate and Environment, which manages the budget for the Norwegian International Climate and Forest Initiative (NICFI), the Ministry of Justice, which manages budget lines for costs related to hosting refugees in Norway (partly reported as ODA), and the Ministry of Education and Research.
Within the MFA, the Minister of International Development oversees the Norwegian Agency for Development Cooperation (Norad), Norway’s development finance institution (Norfund), and the Norwegian Agency for Exchange Cooperation (Norec). The Minister for Development is responsible for development cooperation outside of the states listed above, and with the UN system, the World Bank, and regional development banks.
NORWAY'S DEVELOPMENT COOPERATION SYSTEM
In an effort to increase transparency and to allow Norway to have a more strategic approach to development issues, a reform process shifted the distribution of roles and responsibilities between the MFA and Norad, which came into effect in February 2020. The MFA’s policy development competence was strengthened and consolidated by the reform, whereas Norad’s ODA management responsibilities were extended.
Under the new system, the MFA is in charge of developing policy, determining Norway’s main focus areas, and representing Norway in international arenas. The MFA then delegates much of Norway’s ODA management to Norad, with the exception of humanitarian assistance and human rights efforts which remain under the MFA’s remit. Concretely, this means that the responsibility for assessments, quality assurance, project implementation, follow-up, control and reporting goes to Norad. Norad now has a staff of 274 (an increase from 230 previous to the reform). It has no country offices but works closely with Norwegian embassies, who administer the majority of development assistance.
A 2020 reform strengthened Norad's role
Norwegian embassies lead programming of bilateral cooperation in partner countries, based on the priorities outlined by the MFA. Leadership and program officers in Norwegian embassies, and regional sections within the MFA’s Department for Regional Affairs and Development play a key role in outlining these priorities. Within them, embassies have ample financial and programming authority.
Norway’s development finance institution Norfund is a state-owned investment fund, operating under supervision of the MFA. Established in 1997, it supports private-sector activities in developing countries and focuses on renewable energy, agribusiness, and financial institutions. By the end of 2019, Norfund was managing investments worth over NOK24.9 billion (US$3.1 billion).
The Parliament, largely through its Committee of Foreign Affairs and Defense, scrutinizes government and prepare recommendations on draft legislation. It comments and votes on the government’s ‘white papers’, which outline strategies regarding development and the MFA’s budget. The Committee on Finance and Economic Affairs is the most relevant to budget development, including for ODA.
Norwegian CSOs and faith-based organizations play an important role in development policy. Domestically, Norwegian CSOs educate the public about development issues, act as watchdogs by critically assessing development policy, and carry out lobbying activities targeted at Parliament and the government. CSOs also implement development projects, partly with government funds: Norway channels more than a quarter of its ODA through CSOs. In total, 50 CSOs coordinate their advocacy and research work within the umbrella association, Forum for Utvikling og Miljø (Forum for Development and Environment; ForUM).
Norway uses ’thematic cooperation’ budget lines to pursue its strategic priorities
The 2020 ODA budget is the largest to date, at NOK39.2 billion (US$4.8 billion). The government’s budget proposal, approved by Parliament in November 2019, represents a 4% increase over the 2019 budget in NOK (NOK1,420 million or US$175 million). ODA comes from two main sources: the Ministry of Foreign Affairs (MFA) and the Ministry of Climate and Environment.
2020 ODA budget
|Ministry of Foreign Affairs||35,952||4,420|
|Industrial development, agriculture and renewable energy||4,525||556|
|Education, research and professional cooperation||3,668||451|
|Peace, security, and global cooperation||2,175||267|
|Climate, environment and oceans||1,926||137|
|Costs of refugees in Norway||719||88|
|Europe and Central Aisa||810||100|
|UN development agencies||1,193||147|
|Multilateral financial institutions||2,421||298|
|Funding for AIIB||190||23|
|Ministry of Climate and Environment||3,181||391|
|Ministry of Finance||86||11|
|Ministry of Knowledge||17||2|
|Total ODA Budget||39,126||4,823|
The MFA provides 92% (NOK36.0 billion or US$4.4 billion) of the ODA budget. The MFA’s ODA budget provides detailed information on the allocation of funding, and can be divided into four major categories: 1) thematic cooperation, 2) bilateral cooperation, 3) multilateral funding (outside of specific thematic cooperation), and 4) administration costs.
- Bilateral cooperation comprises regional budget lines for Africa, Asia, Middle East and North Africa (MENA region), and Latin America.
- Multilateral funding includes spending not connected to a specific thematic area and funds disbursed to United Nations (UN) development agencies and certain international financial institutions. Funding for the Asian Infrastructure Investment Bank (AIIB; NOK190 million or US$23 million in 2020) is disbursed by the MFA but sits outside of the official ‘multilateral spending’ envelope.
- Thematic cooperation combines bilateral and multilateral funding to advance specific areas. It receives by far the largest share of funding by the MFA, 68% of all Norway’s ODA expenditure in 2020. There are currently 10 thematic budget lines in Norway’s ODA budget. Those that receive the most funding are in line with Norway’s strategic priorities (see table).
In addition to the MFA, the Ministry of Climate and Environment provides NOK3.2 billion (US$391 million) in ODA, mainly for Norway’s International Climate and Forest Initiative (NICFI). The initiative aims to slow, halt, and eventually reduce greenhouse-gas emissions from deforestation and forest degradation in partner countries.
Indicative ministerial budget ceiling is set in March; budget details are determined from April to August
The budget process runs over a two-year period. Preparatory work starts about a year before the actual fiscal year and the ongoing budget may be amended in the March/April and in the August.
- Ministries prepare initial internal budget drafts: From November to the end of January, Norway’s development agency Norad and Norwegian embassies prepare budget input to submit to the relevant ministries, which in turn start their preparations for developing their budget for the following year. Budget suggestions by the ministries are due by January 25 each year. Key stakeholders during this period are senior staff at the Norwegian embassies, Norad, and senior officials from the Ministry for Foreign Affairs (MFA).
- First budget conference – government decides on indicative ministerial budget ceilings: By March, Norwegian embassies and Norad have prepared their preliminary internal budgets. MFA and Norad leadership ultimately make decisions on budget allocations. In parallel, embassies start identifying bilateral projects for the coming year. Ministerial budget proposals are presented to the government at its first budget conference around March 10, on the basis of which the government sets indicative budget ceilings for each ministry. Budget ceilings are handed out around March 20.
- The MFA further refines internal budgets: Once the government has set the MFA’s indicative spending, the MFA further develops its budget from April to July/August.
- Second budget conference – government makes final decision on overall draft budget: Usually in late August/September, the government holds its second budget conference to agree on final ministerial budget caps and political priorities. At this stage, the government approves the overall ODA volume and funding for major initiatives. It usually does not debate further details of the ODA budget.
- The government presents its budget proposal to Parliament: Around September 20, the government approves its ‘Yellow Book’, its first budget proposal. In the beginning of October, the budget proposal is presented to Parliament. From October to December, the MFA and the other ministries adapt their budget draft to fit within the final caps.
- Parliament debates draft budget: From October to November, Parliament debates the government’s budget draft. The Standing Committee on Finance and Economic Affairs can amend the proposed ceilings and detailed allocations for main expenditure areas until November. The Standing Committee on Foreign Affairs and Defense may propose amendments, but in practice, the Committee on Finance leads on reallocations between budget lines. The additional proposals need to be presented by November 10.
- Parliament approves budget: By mid-December, the Parliament signs off on the budget for the upcoming year.