EU budget support is a means to deliver effective assistance, including in situations of crisis. Budget support helps strengthen country systems and budget processes to implement public policies and deliver sustainable results.

It has been instrumental during the COVID-19 pandemic. Budget support offered additional fiscal space to tackle the negative impact of the pandemic. These efforts may continue in the near future in view of the devastating global effects of the Russian war of aggression against Ukraine.

At the same time, budget support helps achieving progress towards the sustainable development goals (SDGs) despite adverse conditions. It remains at the core of the Neighbourhood, Development and International Cooperation Instrument – Global Europe (NDICI-GE) and the Instrument for Pre-Accession (IPA III). It provides a platform for policy dialogue with authorities and promotes accountability for the use of public funds, while putting forward EU priorities of the Global Gateway, such as the Green Deal and digitalisation. It also represents an EU asset to the Team Europe approach.

In 2021, EU budget support continued to cover a large variety of sectors, with payments in 59 countries or overseas countries and territories. Budget support payments accounted for 11.5 % of the overall payments by the Commission within the framework of NDICI-GE and IPA III or under predecessor instruments.

This report depicts the EU budget support’s contribution to different regions and countries, mainly to advance public administration reform. The report has three parts.

Part I presents the results achieved by partner countries and examples of EU budget support contributions to 15 of the 17 SDGs through 38 concrete cases. In 2021, there was still a major focus on the socioeconomic response to the pandemic, besides monitoring progress towards the SDGs.

Part II analyses the risks and mitigation measures associated with budget support. The protracted effects of the COVID-19 pandemic strongly influenced the breadth and depth of risks. Macro-economic and financial risks increased considerably, along with political risks, as lockdowns and political crises constrained freedoms and civic space. A new risk management framework was introduced in 2021, going beyond the previous focus on budget support.

Part III describes the financial and geographical distribution. Sub-Saharan Africa remains the largest recipient of EU budget support (35 %), followed by the European neighbourhood (31 %), Asia (16 %), Latin America (6 %), the western Balkans (4 %), the Caribbean (3 %), overseas countries/territories (3 %) and the Pacific region (2 %). By contract type, sector reform performance contracts (SRPCs) outweigh state- and resilience-building contracts (SRBCs) and SDG contracts (SDG-Cs), with 79 % of the portfolio value, compared to 19 % and 2 % respectively.