Discerning Funding Sources of ODA Loans
A significant part of the loans counted as ODA is not coming from budgetary resources of the donor government, but is raised on the capital market. At present, the OECD statistics on ODA allow to include the total net flows of loans without distinguishing by source of the respective resources, whenever they meet the established – and highly controversial - criteria of concessionality. This leads to the problem that the budgetary efforts involved in providing equal amounts of loans that are accepted as ODA may differ widely. Especially in the aftermath of the financial crisis some donors are able to borrow money on the capital market at low interest rates and pass it over to developing countries at a higher rate, and still comply with the currently required concessionality level. In this case there is no cost or financial effort for the donor except the risk of default when the borrower fails to pay for the loan.
In the case of Germany the volume of lending using private capital was raised extensively since 2010 with the effect of inflating official ODA figures. When we look at the flows funded with budgetary resources, however, the repayments including both principal and interest were in fact higher than new disbursements during all years except for a small surplus in 2011. In the other years there was a net gain for the donor government budget representing practically an inverse subsidy that needs to be taken into account when calculating real transfers of ODA grants.
How to use:
Removing specific items by clicking on them in the legend allows viewing the net flows according to the source of funding.