Sections:

Statistics on International Development 2007

Section 1

Contents | Section 1 | Section 2 | Section 3 | Section 4 | Table Index


What counts as aid? | When to use DFID figures, GPEX and UK ODA figures | Classification of Bilateral and Multilateral Aid | Classification of DFID Bilateral Aid Types  | Revisions

Understanding Aid Expenditure Statistics

Introductory notes for users

1. This is the 42nd edition of Statistics on International Development (SID), formerly known as British Aid Statistics, which is produced annually. It reports on the deployment of official UK financial resources to support international development, and shows how this funding is broken down by destination country or organisation, type of assistance and purpose.

2. As well as showing total development assistance from all official UK sources, SID reports in detail on the Department for International Development’s (DFID) aid programme – through which most UK funding for international development is channelled. It is important to understand the distinction between different UK and DFID figures and in this report, readers can see from the table titles whether figures are for the UK as a whole, or for DFID only. The section ‘What counts as aid? later in this chapter describes the various components of UK aid in detail and is followed by an explanation of when the use of different figures might be most appropriate.

3. The UK is a member of the Organisation for Economic Co-operation and Development’s (OECD) Development Assistance Committee (DAC) which is a forum for consultation among 22 donor countries and the European Commission. The DAC sets the definitions and classifications for reporting on aid financing internationally and produces a statistical report on international aid flows annually1 . As a DAC member, the UK is committed to transparent reporting of development assistance in a way that permits international comparisons. Thus while DFID (like other UK Government Departments) has moved to resource accounting, SID continues to be produced on a cash basis in line with international reporting   practices.                                                                                                   

4. SID also excludes some DFID voted funds2 that are not counted as aid, and includes some attributed funds from outside DFID’s vote. In addition SID  reports some debt relief on a ‘benefit to country’ basis. This means that total figures in SID differ from those published in DFID’s departmental report. The data in SID can be reconciled to DFID’s formal resource accounts for 2006/07 as shown in the glossary item on ‘resource accounting’.

5. This edition incorporates new figures, mainly covering the 2006/07 financial year and 2006 calendar year. Tables showing data reported internationally to the OECD-DAC are prepared on a calendar year basis while most other statistics are presented on a UK financial year (April-March) basis.

Back to topBack to top

What counts as aid?

6. Aid is a broad term and SID reports a number of different aggregations of development assistance, key ones being:

  • DFID programme of aid;
  • Gross Public Expenditure on Development (GPEX) and;
  • Net UK Official Development Assistance (ODA).

The components of each of these are described below.

7. The major part of the UK aid effort is money channelled through the DFID programme. This includes bilateral and multilateral expenditure from DFID funds voted by parliament including activities funded from the Africa Conflict Pool and Global Conflict Pool (see Glossary for more detail). Beyond DFID voted funds, the DFID programme also includes an attribution of EC budgetary spending (the UK’s contribution to the EC is paid directly by the Treasury and then attributed to different departments with DFID receiving the attribution of the development budget3) . It should be noted that DFID debt relief reported within the DFID programme represents the annual benefit to recipient countries of debt relief that has been agreed. This is explained in ‘Classifications of DFID Bilateral Aid Types’ at the end of this section.

8. Gross Public Expenditure on Development (GPEX) shows development aid flows from all official UK sources. This includes the entire DFID programme, aid flows from other central government departments, investments and debt reorganisation from the UK government body that invests in the private sector in developing economies (CDC Group PLC or CDC) and debt reorganisation from the Export Credit and Guarantee department (ECGD). See the glossary at Annex 2 for more on CDC and ECGD.

9. The DFID programme and GPEX figures both report gross flows from the UK and are reported according to UK financial years. The other important aid classification reported is net ODA (also referred to as UK ODA) which is compiled according to an internationally agreed definition set by the DAC (see the glossary at Annex 2) and is thus comparable with figures for other donors. This is produced on a calendar year basis.

10. As well as ODA, the DAC also requires international reporting of ‘Other Official Flows’ or OOF. These are official flows to developing countries which do not meet the ODA criteria.

11. UK ODA, is largely equivalent to GPEX in terms of  definition, although there are five key differences (shown below), that result in different figures:

  • ODA is reported on a calendar year basis, while GPEX is reported on a financial year basis.
  • ODA only includes aid to recipient (countries and institutions) defined to be eligible by the DAC, while GPEX covers all developmental aid
  • While GPEX shows gross flows, ODA is reported as a net figure, taking into account of any loans repaid or grants recovered.
  • Promissory notes for the World Bank and Regional Development Banks are counted as ODA at the time they are deposited but are not counted against DFID programme spend (hence GPEX) until the time the funds are drawn down (encashed).
  • Debt relief is eligible to be reported as ODA, however, some 'DFID debt relief' provided in 1978,  which is reported in SID in small amounts annually, was scored as ODA in a lump sum in 1978, and so is not scored as ODA in the year it is reported in SID.

Back to topBack to top

When to use DFID figures, GPEX and UK ODA figures

12. If readers are interested in making international comparisons, UK ODA figures which follow international  reporting practices should be used. Although UK figures for 2006 have just been finalised. for some analyses including data for other donors, 2005 figures are the latest available.

13. An important United Nations target was  established in 1970 which states that each donor should aim to spend 0.7 per cent of its gross national income as ODA. Progress against this target and more detail on UK ODA can be found in Tables 7external link (33 kb) and 8 external link (25 kb).

14. Readers interested in wider aid spend (not just ODA) should look at the DFID or GPEX figures (or figures reported to the DAC on ODA, OOF and private flows4).

15 . Those interested in DFID in particular, will want to focus on DFID programme figures. For some analyses figures are only available for the DFID programme. To be able to fully understand DFID programme figures, readers may wish to consult the Aid Types table at the end of this section which summarises what counts as different types of aid. Definitions of all the classifications used in tables appear in the glossary at Annex 2.

Back to topBack to top

Classification of Bilateral and Multilateral Aid

16.  The classification of aid as bilateral or multilateral is based on definitions laid down by the DAC. On the whole bilateral assistance is provided directly to partner countries while multilateral assistance is provided to international organisations. While much DFID expenditure is clearly identifiable as bilateral or multilateral in nature, there are some anomalies.

17.  Funds can only be classified as multilateral if they are channelled through an organisation on a list in the DAC Statistical Reporting Directives which identifies all multilateral organisations. This list also indicates some bodies that might appear to be multilateral but are actually classified as bilateral (in particular this latter category includes some international non-governmental organisations such as the International Committee of the Red Cross and some Public-Private Partnerships such as the Global Alliance for Vaccines and Immunisation. The DAC list of multilaterals is updated annually based on members nominations; organisations must be engaged in development work to be classified as multilateral aid channels.

18.  Aid may be classed as bilateral while a case is being made for the recipient institution to be recognised by the DAC as a multilateral organisation. Once the DAC has recognised the multilateral organisation the aid may be retrospectively re-classified as multilateral.

19.  While core funding to multilateral organisations is always classified as multilateral expenditure, additional funding channelled through multilaterals is often classified as bilateral expenditure. This would be the case in circumstances where DFID has control over what the money is being spent on/or where it is being spent. (For example, where a DFID country office transfers money to a multilateral organisation for a particular piece of work in that country.) As a result, some organisations, such as UN agencies have some of their DFID funding classified as bilateral and some as multilateral.

Back to topBack to top

Classification of DFID Bilateral Aid Types

20. Financial Aid – Poverty Reduction Budget Support (PRBS) – Funds provided to developing countries for them to spend in support of a government policy and their expenditure programmes whose long-term objective is to reduce poverty; funds are spent using the overseas governments’ own financial management, procurement and accountability systems to increase ownership and long term sustainability. PRBS can take the form of a general contribution to the overall budget - general budget support - or support with a more restricted focus which is earmarked for a specific sector - sector budget support.

21.  Other Financial Aid – Funding of projects and programmes such as Sector Wide Programmes not classified as PRBS. Financial aid in its broader sense covers all bilateral aid expenditure other than technical cooperation and administrative costs but in SID we separately categorise Humanitarian Assistance, DFID Debt Relief and ‘other bilateral aid’. Aid and Trade Provision which was previously identified in SID has now been merged into ‘other financial aid’ as it is a rapidly declining flow.

22.  Technical Cooperation - Activities designed to enhance the knowledge, intellectual skills, technical expertise or the productive capability of people in recipient countries. It also covers funding of services which contribute to the design or implementation of development projects and programmes.

This assistance is mainly delivered through research and development, the use of consultants, training (generally overseas partners visiting the UK or elsewhere for a training programme) and employment of ‘other Personnel’ (non-DFID experts on fixed term contracts). This latter category is becoming less significant over time as existing contracted staff reach the end of their assignments.

23.  Humanitarian Assistance - Provides food aid and other humanitarian assistance including shelter, medical care and advice in emergency situations and their aftermath. Work of the conflict pools is also included.

24.  DFID Debt Relief - This includes sums for debt relief on old DFID aid loans and cancellation of debt under the Commonwealth Debt Initiative (CDI). The non-CDI DFID debt relief is reported on the basis of the ‘benefit to the recipient country’. This means that figures shown represent the money available to the country in the year in question that would otherwise have been spent on debt servicing. The CDI debt cancellation is reported on a ‘lump sum’ basis where all outstanding amounts on a loan are shown at the time the agreement to cancel is made. See Annex 3 for more details on debt relief.

25.  Support to CSOs - This category comprises support to the development work of UK and other international Civil Society Organisations (increasingly through partnership agreements with CSO's) and grants to the British Council.

26.  Aid Not Elsewhere Classified - This category covers equipment and supplies that the UK might provide (e.g, medical supplies).  It includes aid which does not fit into any of the other categories (such as the Education Fast Track Initiative).

27.  Between 2007/08 and 2008/09 DFID will be introducing a new reporting system, ARIES, which will integrate all of the systems DFID’s current financial  and project management systems. To coincide with the introduction of this new system, DFID is reviewing how it classifies its aid delivery types. The outcome of this review may lead to the introduction of a new set of classifications which may result in changes to the format of future publications.

Back to topBack to top

Revisions

28.  On 3rd June 2006 Montenegro formally declared independence from Serbia and Montenegro, thus ending the union with Serbia. From 2006/07, DFID must report on Montenegro and Serbia separately. To this end, an exercise has taken place to attribute any expenditure received by Serbia and Montenegro between the two countries. Thus, in this publication, any spend under Montenegro is spend identified as only benefiting Montenegro, all other spend appears under Serbia.

29.  The sector analysis in Section 4 incorporates a new method to notionally allocate General Budget Support to sectors. This has led to revisions to previously published estimates of sector breakdowns of DFID aid. More information is available in Section 4.

30.  In previous editions of SID debt relief was reported under the economic sector. However, it cannot be shown that debt relief benefits only the economic sector and thus, to avoid confusion and a mis-interpretation of the data, all debt relief has been coded under ‘sector unallocated’.

31.  Part of the debt relief reported for Cameroon, Ghana, Honduras, Malawi and Tanzania over the period 2001/02 to 2004/05 reflected amounts that would have been given had the countries reached completion point. However, these countries had not reached completion point when the debt relief was reported. As such the debt relief totals for these countries were incorrect. Data has been amended to reflect when these countries actually received debt relief.

32.  Contributions to the Commonwealth Foundation have been amended in Table 18external link (32 kb). Previously, due to a coding error, DFID’s contribution was recorded under both the DFID Programme and Other Government Departments, resulting in double counting. This error has been corrected in this edition of SID.

33.  The statistics given here for 2005/6 and earlier years may differ slightly from the previously published figures due to revisions to coding of projects which have been applied retrospectively.


1. OECD (2007) Development Co-0peration Report 2006 (Volume 8, No 1)
2. Voted funds are the budget allocations set by Parliament.
3. Prior to 2004/05 aid to the group of 10 countries that joined the EC in 2004 was attributed to DFID; since 2004/05 these sums have become part of the UK's total contribution and cannot be attributed directly to DFID.
4.Private flows are not classified as aid, but are reported to the DAC separately and shown in SID Table 6external link (23 kb). See glossary for definitions.