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Published 22 October 2024 in Analysis
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This report is published against a backdrop of major budget cuts in France, which are particularly affecting Official Development Assistance. To gain further insight into the implications of these cuts, their consequences and the reactions of civil society organizations, take a look at Focus 2030’s analysis: “France reneges on its Official Development Assistance commitments ”. |
Humanity is facing an unprecedented number of simultaneous crises: wars, climate change, economic crisis, epidemics, famines... Nearly 700 million people are now living in extreme poverty, jeopardizing three decades of progress.
Rapid and globally coordinated resources and policies are needed to respond to current crises while preparing for the future. The Sustainable Development Goals investment gap in the Global South now stands at 4 trillion dollars per year, underlining the need for a urgent collective action and a more equitable resource redistribution.
Although Official Development Assistance (ODA), is just one instrument among others to mobilize resources for development, it remains the only redistributive public policy capable of addressing global emergencies and meeting the needs of the most vulnerable populations.
Since 2017, France has assumed a fair share of this effort. However, its ambition, which has been praised by its international partners, now appears to be undermined.
Indeed, France has initiated a significant reversal in its Official Development Assistance policy since 2023. Over the course of two years, the French government’s budget for international solidarity is projected to undergo a reduction of upwards of two billion euros.
In light of these developments, Focus 2030 has carried out an independent evaluation to assess the trends in France’s ODA policy since 2017. It analyzes the achievement of assigned objectives, planned reforms, modernization efforts and financial trajectories.
This study reveals that French Official Development Assistance, when it supports high-impact instruments and projects and is not diverted from its intended purpose, is undoubtedly the most efficient public policy in terms of cost-benefit.
Analysis.
Since 2017, France has spearheaded a series of international conferences, championing a multilateral response to global crises. Highlights include hosting the replenishment conferences of the Global Fund to Fight AIDS, Tuberculosis and Malaria and the Green Climate Fund, co-chairing the Generation Equality Forum with Mexico, and in 2023, organizing the Summit for a New Global Financing Pact, which led some sixty countries to support the Paris Pact for People and the Planet, a roadmap for reforming the international financial architecture to strengthen support for the fight against poverty and ensure the preservation of the planet.
Despite these initiatives, the OECD recommends that France mobilize more resources to implement the decisions taken at these summits, and better align national actions with international commitments.
By 2030, several multilateral events and replenishments, including the 4th International Conference on Financing for Development, the Nutrition For Growth Summit, the replenishments of IDA, Gavi, the Global Fund, Unitaid, and the Green Climate Fund, will provide France with the opportunity to consolidate its commitments to international solidarity.
In 1970, France, together with other industrialized countries, made a commitment to the United Nations, to allocate 0.7% of its national wealth to ODA. Despite the failure to reach this target, the trajectory initiated in 2018 was on an upward trajectory: the target of 0.55% was reached in 2022, and the objective of 0.7% was enshrined in the law in 2021, to be reached by 2025.
However, this trajectory has been reversed, as illustrated by an 11% decrease in French ODA in 2023 (i.e. 1.6 billion euros less than in 2022), a renunciation the government confirmed in 2023 by pushing back to 2030 the target of allocating 0.7% of GNI to ODA. In February 2024, the French government made a 742 million euros cut in the ODA budget line, which represents the core of French ODA (-11%). Additionally, the finance bill for 2025 plans a further 23.3% cut compared to the 2024 budget, i.e. 1.3 billion euros.
According to Focus 2030’s calculations, these reversals of recent gains represent almost 21.2 billion euros disinvested from international development between now and 2030.
France allocates the majority of its ODA bilaterally (57%), but its significant use of the multilateral system is a notable distinction from other OECD countries. In 2023, 43% of its ODA was channeled multilaterally (6.1 billion euros), well above the average of DAC countries (25%). In 2022, almost half of France’s multilateral aid was channeled through the European Union budget.
France is therefore among the major donors of a number of multilateral organizations and funds, including the Global Fund to Fight AIDS, Tuberculosis and Malaria, Gavi, the Vaccine Alliance, Unitaid, the Green Climate Fund and the Global Partnership for Education.
A distinctive feature of the French ODA, is that a part of these multilateral contributions is financed by the financial transaction tax (FTT) and the solidarity levy on airline tickets (TSBA), capped at 738 million euros each year. Various stakeholders point out that this amount could easily be multiplied up to five times, by optimizing the collection of these taxes, broadening their base and increasing earmarking for solidarity. However, the government plans to remove this earmarking as soon as 2025.
Official Development Assistance can be allocated either in the form of grants or concessional loans, i.e. with interest rates below the market rates. In 2021, France set a target of allocating 70% of its total ODA in the form of grants, a target that was exceeded as soon as it was adopted, reaching 88% in 2023. It nevertheless remains below the average of other donor countries (92%).France ranks 27th out of 31 countries, with 19 DAC countries allocating more than 98% of their ODA in the form of grants.
Mechanically, France has made a substantial use of loans, 19% of its bilateral aid in 2023, well above the DAC average (4%). Moreover, the loans provided are less concessional than the OECD standards, which contributes to exacerbating budgetary challenges faced by countries that are sometimes forced to choose between repaying their debt or investing in public services.
This heavy reliance on loans rather than grants influences the sectors supported through France’s ODA, to the detriment of social sectors such as health and education. Thus, the sectors identified as priorities by the Committee for International Cooperation and Development (CICID) in 2018 received only 41% of France’s ODA in 2022, despite the 70% increase in their funding between 2018 and 2022. In 2022, 29% of French ODA was allocated to infrastructure and economic services, while education received just 19% (of which two-thirds were scholarships and imputed student costs for foreign students) and health 9%.
Gender equality has been a long-standing objective of France’s ODA policy. In 2021-2022, 46% of its bilateral ODA commitments ($4.4 billion per year) targeted gender equality, in line with the OECD average but still far from the 75% target set for 2025. In addition, France’s support for multilateral organizations working on gender equality remains modest. Nevertheless, France is a notable pioneer in supporting feminist organizations, and it also champions this cause on the international stage through its feminist foreign policy.
France has one of the highest reported levels of climate finance among countries worldwide. In 2022, it declared allocating 59% of its bilateral ODA commitments to climate issues, i.e. 7.6 billion euros. Of this sum, only 15% took the form of grants, with the remainder distributed as loans. The latter form of support can exacerbate the financial situation of countries already on the verge of over-indebtedness. Furthermore, only 18% of France’s ODA is devoted to climate adaptation, compared with 28% on average among OECD countries.
The 2018 CICID established a list of 19 priority countries for France’s ODA, replaced in 2023 by a target of allocating 50% of ODA to least developed countries (LDCs). Despite these guidelines, France’s ODA has been primarily allocated to middle-income countries, which received 48% of total ODA disbursements in 2022, while LDCs received only 19%.
In terms of geographical distribution, the African continent was the primary recipient in 2022, accounting for 40% of disbursements, compared with 13% for Asia and 8% for Europe. This distribution has remained stable since 2017.
It should be noted that a significant proportion of the ODA declared by France is spent domestically. Like most DAC countries, France incorporates the costs incurred in supporting foreign students and refugees on its own territory within its ODA. On average, in 2018-2022, these two categories accounted for 26% of its bilateral ODA, compared to the OECD average of 14%. This practice has been the subject of criticism from a number of stakeholders, who consider these amounts to be "inflated aid", arguing that they do not directly contribute to the well-being of populations in developing countries, and therefore represent a misleading representation of the actual aid provided.
Part of France’s ODA is channeled through civil society organizations (CSOs), based in France or in recipient countries. Increased allocations to CSOs are generally recommended, notably by the OECD, given they are independent organizations with privileged access to marginalized and vulnerable populations. In 2017, 310 million euros of France’s ODA transited through CSOs, an amount that more than doubled to reach 711 million by 2022.
However, France relies on CSOs to a lesser extent than the OECD average (13%), with just 7.8% of bilateral ODA allocated to them in 2022. Despite the commitment made in the 2021 Programming Law to get closer to the OECD average, the 2024 Finance Law provides for only 8% of bilateral ODA to CSOs until 2026.
The implementation of France’s international development policy remains characterized by a lack of transparency and accountability, despite slow progress. The 2021 law introduced measures that have yet to come into effect. As a result, in 2024, the NGO Publish What You Fund ranked the French Development Agency 35th out of 50 institutions in terms of aid transparency, noting a regression since 2022. The Ministry of Foreign Affairs, absent from the ranking since 2020, demonstrated similar levels of transparency.
