Briefing
This briefing analyses how the Covid-19 pandemic continues to affect development finance in low- and middle-income countries, with a particular focus on countries facing the highest levels of poverty, including least developed countries (LDCs), fragile states, small island developing states and protracted crisis contexts. Using projections and recent data, it compares trends in domestic public revenues and key international financial flows – including official development assistance (ODA), foreign direct investment, remittances and tourism – before and after the onset of the pandemic.
The briefing shows that domestic revenues in poorer and fragile countries were hit hardest in 2020 and are recovering more slowly than in other contexts, while major international flows such as tourism and investment have declined sharply. Although ODA is projected to increase in the medium term, support to the poorest and most fragile countries continues to grow more slowly than overall aid. The analysis highlights the implications of these trends for financing recovery, resilience and progress towards the Sustainable Development Goals.