Rich nations' overseas development aid dropped nearly a quarter in 2025, says OECD

By Duncan Miriri

NAIROBI, April 9 (Reuters) - Overseas development aid from the world's richest nations to poorer countries dropped by 23.1% in 2025 to $174.3 billion, the biggest ever year-on-year reduction, the Organisation for Economic Co-operation and Development said on Thursday.

The OECD's Development Assistance Committee, which includes the United States, Japan and the European Union, reported a drop in provision of assistance by 26 out of its 34 member countries, mainly due to political and fiscal pressures in their own economies.

"The message is extremely sombre," Carsten Staur, the chair of the OECD assistance committee, told a news briefing.

The U.S. alone drove three-quarters of the decline, the organisation said, with assistance falling by the largest reduction by any provider in any year on record.

"The scale of the decline by the United States meant that Germany became the largest provider of overseas development assistance for the first time," it said.

President Donald Trump has been cutting U.S. contributions to various institutions and has closed the U.S. aid agency.

Washington cut its development assistance to Ukraine sharply last year, the OECD said, but increased funding by EU institutions led to an increase on the previous year in net terms.

OTHER DONOR NATIONS CUT FUNDING SIGNIFICANTLY

Germany, France, Britain and Japan, which normally make up the top five donors, also cut their assistance significantly during the year, the OECD added.

The provisional data measures overseas development assistance (ODA) - government aid given to poorer countries to support their economic development and welfare. The final data is usually released in December.

The data also includes funding for some United Nations development projects, as well as for multilateral development banks. Such funding to the UN dropped by more than a quarter while the World Bank saw its funding increase, OECD said.

The cash has become increasingly important to recipient nations, said Mathias Cormann, the secretary general of the OECD, as they wrestle with an increase in expensive debt.

"Official development assistance helps countries manage some of these pressures," he said, adding that some components of the funding also attract private capital into projects.

Bilateral aid to African states, and those classified as least developed countries including in other regions, also dropped by more than a fifth during the period, the OECD said.

Cormann said one answer to the decline in funding is for governments to strengthen their tax collection efforts, adding that the organisation is working with Ivory Coast, Ethiopia, Kenya and Tunisia to strengthen their resource mobilisation.

OECD projected a 5.8% decline in overseas development assistance this year, without accounting for any shocks from the war in Iran, it said.