Official development assistance

Official development assistance (ODA) is a category used by the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) to measure foreign aid. The DAC first adopted the concept in 1969. It is widely used as an indicator of international aid flow. It refers to material resources given by the governments of richer countries to promote the economic development of poorer countries and the welfare of their people. The donor government agency may disburse such resources to the government of the recipient country or through other organizations. Most ODA is in the form of grants, but some is measured as the concessional value in soft (low-interest) loans. In 2019, the annual amount of state donor aid counted as ODA was US$168 billion, of which US$ 152 billion came from DAC donors. In order to co-ordinate and measure international aid effectively, the DAC needs its members to have agreed clear criteria for what is counted as aid. The precise type of aid to be counted was given the name of official development assistance (ODA) (where "official" indicates that the aid is public and from governments). The full definition of ODA is: In other words, ODA needs to contain the three elements: undertaken by the official sector (official agencies, including state and local governments, or their executive agencies) with promotion of economic development and welfare as the main objective; and at concessional financial terms (if a loan, having a grant element of at least 25 per cent). This definition is used to exclude development aid from the two other categories of aid from DAC members: Official Aid (OA): Flows which meet conditions of eligibility for inclusion in Official Development Assistance (ODA), other than the fact that the recipients are on Part II of the Development Assistance Committee (DAC) List of Aid Recipients.