Every year thirty percent of development aid fails to reach its “final destination” according to the U.N. Secretary-General Ban Ki-moon. The Organization for Economic Co-operation and Development’s (OECD) Development Assistance Committee members’ total budget reached $132 billion in 2015. This brings the estimated amount lost to a total of nearly $40 billion. This money is lost through a combination of human intervention, including fraud, waste, and corruption.

Official and unofficial development assistance is on the rise with the OECD reporting an increase from 2015, after adjusting for inflation and the appreciation of the US dollar, of 6.9% in real terms, the highest level ever achieved for net assistance. They also report that since 2000, net official development assistance (ODA) has increased by 83% in real terms.

The largest portion from a single country comes from the United States, which reports their budget for United States Agency for International Development (USAID) at $22.7 billion for 2017, of which $11.0 billion is in core USAID-managed accounts: Development Assistance, Global Health Programs-USAID, International Disaster Assistance, Food for Peace Title II, Transition Initiatives, Complex Crises Fund and USAID Administrative Expense accounts.

The following shows where the USAID was sent to in 2010, the largest share was sent to Sub-Saharan Africa and Asia.

Fraud in international development aid

In 2013, the European Union (EU) spent €56.2 billion on development aid, including aid from EU funds combined with aid from EU countries’ national budgets. That amounts to 0.43% of the EU gross national income. All the countries have committed to reach the target of 0.7% of gross national income by 2015.

Definition of Fraud
Waste, fraud, and corruption contribute to significantly decreasing the effect of the aid sent to these developing countries. Waste is defined by projects that either are significantly delayed/stopped or fail to meet their objectives. Fraud is defined as money being spent on the wrong items or significantly increasing the amount that should be spent so that the total effect of the project is decreased. Corruption is defined as dishonest activity by those in power that decreases the total effect of project, typically bribery.Vezde Remote Monitoring

 

 

Ingeborg Gräßle, the senior German Member of European Parliament who serves on the Parliaments Budgetary Control Committees, said more than 900 aid projects worth £11.5 billion are either significantly delayed or will fail to achieve their objectives this year. These include a fund of £26.8 million earmarked to combat corruption in Nigeria, which cannot be handed over because of fears it will be siphoned off by corrupt Nigerian officials.

 

The following is a breakdown of the error reported by the EU for their aid during 2013-2014. This shows what percentage each error was of the whole. The majority of the error came from ineligible claims and errors in public procurement.
Fraud in international development aid