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Revised National Budget

Norway’s development aid budget is adjusted to meet needs created by the coronavirus pandemic

New hardships have arisen during the coronavirus crisis. Poor countries with weak health systems and large, vulnerable population groups are likely to be the hardest hit. To mitigate the health, social and economic consequences of the pandemic, Norway was quick to devise initiatives and measures capable of saving lives and reducing the pandemic’s damaging effects.

However, numerous measures and programmes that Norway supports have been delayed, and others have stopped operating. As a result the Government is proposing amendments to the development aid budget in connection with the Revised National Budget. Within certain budget items the Government also proposes an increase in spending flexibility.

While a great deal of money and attention is currently focused on the coronavirus pandemic, the Government maintains its commitment to top development policy priorities such as education, climate change and food safety.

New needs

The development aid framework remains as it was in the 2020 central government budget adopted in December 2020. Coronavirus-related efforts will be paid for by moving funds between budget items (taking from measures that can and must be delayed) as well as reordering spending within individual budget items. Additional funds have become available due to reduced refugee cost estimates in Norway.

Health

The coronavirus situation makes it imperative to strengthen global health efforts. The Government proposes to increase funding in 2020 by NOK 541 million, to NOK 4.15 billion. The pandemic has heightened the need for infection control and prevention, testing, treatment, sanitation improvement and efforts to reduce starvation and malnutrition.

Humanitarian assistance

People already stricken by crisis and conflict are suffering even more during the pandemic. The Government is therefore proposing to allocate an extra NOK 38.2 million to humanitarian efforts in 2020. That is in addition to the already record-high humanitarian budget of NOK 5.5 billion for the year. This support will help humanitarian organisations to meet immediate needs such as access to food, water, shelter and education.

Africa

Dealing with the coronavirus pandemic is a major challenge for African countries. For the most vulnerable ones, the pandemic is an added burden amid hardships such as conflict, climate change and food security. For this reason the Government proposes to increase its spending on sub-Saharan Africa by NOK 30 million and to set aside an additional NOK 7 million for stabilisation measures in Sudan. In the wake of the country’s spring 2019 revolution, Sudan is pursuing a crucial but fragile peace and reform process.

IMF’s Catastrophe Relief Fund

The Government proposes giving NOK 180 million to the International Monetary Fund’s (IMF’s) Catastrophe Relief Fund. The fund assists the world’s poorest countries by covering their fixed debt obligations to the IMF. Providing extra resources to this fund frees the poorest countries to deal with the effects of the pandemic.

World Bank

The World Bank responded quickly to the Covid-19 emergency by releasing large amounts of pandemic-related funding. The Government proposes to add NOK 102 million to Norway’s core funding for the International Development Association (IDA), which is the World Bank fund for the world’s 76 poorest countries. This contribution will fund health-care efforts related to the coronavirus pandemic. It comes on top of Norway’s contribution to donor-country replenishment for the 2020–2022 period and is a result of reprioritising funds for the International Finance Corporation (IFC) and for strategic cooperation with development banks and funds.

More flexibility for civil society

Norwegian organisations and local partners in developing countries can play an important role in helping those who need it most. The Ministry of Foreign Affairs and Norad have already agreed to give civil society more flexibility as a result of the coronavirus crisis. The Government has also signed major new agreements with the six largest Norwegian humanitarian aid organisations. The agreements will allow the organisations to be more flexible in their rapid response to crises.

Less activity

The Government proposes allowing certain budgeted funds to be spent on measures to mitigate short-term and long-term pandemic impacts. The Government also proposes increased spending flexibility under a number of budget items. Reallocations are an essential aspect of responding promptly where and when needed. Permitting them is possible because activities in some projects have come to a halt or fallen short of expectation due to the coronavirus pandemic.

Several education initiatives that Norway supports have been less active and made less progress. To meet needs arising during the pandemic, the Government proposes to reduce spending on education in developing countries by a total of NOK 165 million. The Government is proposing a NOK 50 million reduction in funding for the Norwegian Programme for Capacity Development in Higher Education and Research for Development (Norhed) and a NOK 15 million reduction for the Norwegian Partnership Programme for Global Academic Cooperation (Norpar). In addition, the Government plans to postpone until next year a payment to the Global Partnership for Education (GPE). Because of delays, other measures will also see reductions. To address new needs that arise during the pandemic, the Government proposes that budget allocations for education may also be spent on health-related measures that complement the right to education.

The Government strengthened climate-related assistance in the fiscal budget by specifically targeting climate-change adaptation and food security. Some of the countries that have done the least to cause global climate change are its worst victims. The Paris Agreement signatories envisaged a balance between efforts to cut emissions and efforts to help the countries hardest hit by climate change to adapt to its effects. Key ways of adapting include climate-smart food production and improved food security. The Government’s commitment to climate-change adaptation is undiminished even amidst the extraordinary circumstances of the coronavirus pandemic.

Because shuttered communities and severe travel restrictions make it hard to execute projects or begin new ones, the Government proposes to reduce funding for renewable energy and business development by a combined NOK 240 million, and for ocean-related initiatives by NOK 135 million.

The Government also proposes reducing funding to the Knowledge Bank and specialised collaboration by NOK 200 million in 2020. Delays in a number of programmes help to make this possible, as does postponing payments and new agreements.

Travel restrictions and reduced activity are also why the Government is proposing to cut support to the Norwegian Agency for Exchange Cooperation (Norec) by NOK 59.5 million.

Certain expenses tied to refugees staying in Norway and to the reintegration of refugees in their home countries may be classified as aid in the development aid budget. New estimates indicate lower spending in this area in 2020. The Government proposes to reduce this budget item by NOK 143.2 million and allow the money to be used on other measures in the development aid budget.

 

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