This factsheet analyses several major international finance flows between 2000 and 2021 to countries which were eligible to receive Official Development Assistance (ODA). ^[1] Focusing predominately on 2021 – the latest year for which data is available for all the flows analysed in this factsheet – it provides an update on a previous factsheet published in 2018. The 2018 paper described key trends in international sources of finance over time and assessed their relative level of significance. In 2021, ODA continued to be a critical source of finance, ^[2] particularly to least-developed countries (LDCs) and to countries in fragile situations. ^[3] However, commercial flows still dominated the international financing landscape; these and other international financial flow trends will be explored in this factsheet.

The financial flows presented in this paper have been grouped into the following categories: official, commercial and private; details of which are available in the Appendix . The data discussed in this factsheet can be found in the accompanying dataset.

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• Commercial long-term debt was consistently the largest annual source of finance between 2011–2021 and was on average six times greater than ODA ( Figure 1 ).
• ODA was an important source of finance to ODA-eligible countries in Oceania and sub-Saharan Africa ( Figure 2 ).
• Remittance inflows were a significant source of finance for lower-middle-income countries, while commercial flows such as commercial long-term debt and foreign direct investment (FDI) were important sources of finance to upper-middle-income countries ( Figure 3 and Figures 4 and 5 within the case study).
• ODA was the largest source of finance to LDCs in 2021, accounting for nearly 30% of their total annual international revenue ( Figure 6 ).
• In 2021, ODA was an importance source of finance to countries classed as ‘extremely fragile’, with remittances also a significant flow to these countries ( Figure 7 , Figure 8 ).
• ODA was the largest source of finance for 30 ODA-eligible countries in 2021 (where data is known), including Afghanistan, Burundi and Central African Republic ( Figure 9 ).

• In 2021, total international flows to (or among) countries which were eligible to receive ODA amounted to US$3 trillion, representing 9% of their total GNI for that year. ^[4]
• Commercial flows – particularly commercial long-term debt – dominate the international financing landscape. Commercial long-term debt has consistently been the largest source of finance since 2011. In 2021, it amounted to almost US$1 trillion, a third of total international flows in that year. ^[5] This is despite the fact that over 40% of ODA-eligible countries are currently in debt distress or are at a moderate or higher risk of it. ^[6]
• ODA from the OECD’s Development Assistance Committee (DAC) donors ^[7] and multilateral donors to ODA-eligible countries was US$148 billion in 2021, a 7% decrease from US$160 billion in 2020. ^[8] Commercial long-term debt was five times the value of ODA in 2011, rising to seven times the value of ODA in 2021. Between 2011–2021, commercial long-term debt was on average six times the value of ODA.
• Following commercial long-term debt, remittances and FDI were both important sources of finance, with each consistently either the second or third largest inflow from 2011 onwards.
• 2021 saw an uptick in international financial flows following a marked decline between 2017 and 2020. As expected, 2020 saw a significant decrease when sources of finance such as inbound tourism expenditure and foreign direct investment (FDI) fell due to the Covid-19 pandemic.
• The increase in international financial flows in 2021 was largely due to a rise in FDI, remittances and net short-term debt. ^[9] FDI increased by 23% between 2020 and 2021 (from US$455 billion to US$559 billion) following a decrease of 14% between 2019 and 2020 when it fell to US$528 billion. At the same time, remittance inflows increased to US$588 billion in 2021 from US$568 billion in 2020.
• Net short-term debt saw the largest increase of all sources of international finance between 2020 and 2021, more than tripling in value from US$89 billion to US$279 billion. ^[10] Total net short-term debt received in 2021 was concentrated in just a few countries with China accounting for 75% (US$210 billion) while India (US$11 billion) and Brazil (US$10 billion) accounted for approximately 4% each. As Figure 1 shows, net short-term debt fluctuated greatly from one year to the next.
• 2021 saw an increase in several other sources of international finance such as export credits and inbound tourism expenditure. Export credits rose by over 90% between 2020 and 2021, from US$21 billion to US$40 billion. Inbound tourism expenditure decreased significantly in 2020 compared to 2019, falling by 69% from US$462 billion to US$145 billion. It rose to US$163 billion in 2021 but shows no sign of returning to its 2019 value. ^[11]

Sources of international finance for ODA-eligible countries varied significantly by geographic region in 2021:

• ODA accounted for almost 40% of all international financial flows to Oceania (US$3.1 billion) in 2021 and was the second largest financial flow to sub-Saharan Africa at 20% in that year (US$59.8 billion).
• Remittances were the largest source of international finance for the Middle East, North of Sahara, South & Central Asia, and Caribbean & Central America regions in 2021, accounting for at least a third of the total international revenue received by each.
• Commercial long-term debt was the most important form of international finance for ODA-eligible countries in Europe, Far East Asia and South America. However, approximately three-quarters of total commercial long-term debt disbursed in 2021 went to just one country in each region: Türkiye in Europe (74% of commercial long-term debt or US$63 billion), China in Far East Asia (76% or US$357 billion) and Brazil in South America (74% or US$152 billion).
• China also accounted for 70% (US$181 billion) of all foreign direct investment (FDI) and 94% (US$210 billion) of all net short-term debt received by the Far East Asia region.

International financial flows to ODA-eligible countries differ greatly when examined in terms of their income groupings. ^[12]

• Commercial flows such as commercial long-term debt and foreign direct investment (FDI) were significant sources of external finance for upper-middle income countries (UMICs). Commercial long-term debt accounted for 40% of all financial flows received by UMICs in 2021 while FDI accounted for 21%.
• Remittances represented the largest source of international finance for lower-middle income countries (LMICs) at 37%.
• ODA was the most important source of finance for countries in the low-income (LIC) and least-developed (LDC) categories. Although commercial long-term debt, FDI and remittances were important sources of finance, official flows was the most significant type of finance for countries in these categories. For LICs specifically, ODA from DAC countries and multilateral donors (at 41%) along with development cooperation from other government providers (at 8%) accounted for almost half of all international finance received in 2021. ^[13]

In 2021, only a small proportion of the commercial and private flows analysed went to least-developed countries (LDCs). In the same year, only 5% of all foreign direct investment (FDI) to ODA-eligible countries went to LDCs while only 10% of remittances went to LDCs. ^[17]

• ODA was the largest source of financing to LDCs in 2021, representing 29% of total international finance received. 43% of ODA disbursements from DAC countries and multilateral donors (US$64 billion out of a total US$148 billion) went to LDCs.
• 26% of all private development assistance provided in 2021 to ODA-eligible countries went to LDCs, totalling US$1.2 billion. ^[18]

Types of international finance received also vary greatly depending on whether a country has been designated as fragile or not. ‘Fragility’ is defined by the OECD’s States of Fragility platform as the “combination of exposure to risk and insufficient coping capacities of the state, system and/or communities to manage, absorb or mitigate those risks” and is measured across the following six dimensions: economic, environmental, human, political, security and societal. ^[19]

• ODA was the largest source of finance in 2021 for seven of the 15 countries classified as ‘extremely fragile’. These included the Democratic Republic of the Congo, Somalia, Sudan, South Sudan, Afghanistan, Burundi and Central African Republic. Further details are provided in Figure 8.
• Following on from this, remittances were the second most significant financial flow in 2021.

As mentioned previously, ODA was a significant source of finance for some countries in 2021, particularly least-developed countries (LDCs) and those classified by the OECD’s States of Fragility platform as ‘extremely fragile’. ^[20] In 2021, ODA from DAC countries and multilateral donors accounted for over half of all known international finance received by 30 ODA-eligible countries during that year. ^[21] Examples of LDCs – which are also classified as extremely fragile – for which ODA was a significant source of finance include:

• Afghanistan: the country received US$4.5 billion of ODA in 2021 which represented 89% of total international finance received. ^[22] Afghanistan’s next greatest source of finance in 2021 was remittance inflows at US$300 million.
• Burundi: received US$620 million of ODA in 2021, equal to 86% of total international finance received. ^[23] Like Afghanistan, remittances were Burundi’s next largest source of finance in 2021 at US$48 million.
• Central African Republic (CAR): received US$648 million of ODA (88% of international finance received). ^[24] The next greatest financial flow to CAR in 2021 was foreign direct investment (FDI) at US$30 million.