The OECD Development Assistance Committee (DAC) conducts periodic reviews of the individual development co-operation efforts of DAC members. The policies and programmes of each member are critically examined approximately once every four or five years. Five members are examined annually. The OECD Development Co-operation Directorate provides analytical support, and develops and maintains, in close consultation with the Committee, the methodology and analytical framework – known as the Reference Guide – within which the peer reviews are undertaken.

With a population of 82.6 million, in 2014 Germany was the fourth largest economy in the world in terms of nominal gross domestic product. As a global economic power, Germany participates in many international bodies, including the G8 and G20, and is a key member of the European Union (EU).

Germany is a prominent player in promoting sustainable development on the international stage. Backed by strong political commitment and sound cross-government strategies for global engagement, it uses its position strategically to engage in key areas for development. In particular, it took the opportunity of its Presidency of the G7 in 2015 to encourage strong commitments on the 2030 and climate change agendas and enhance action in other important areas such as women’s entrepreneurship, financial market regulation, taxation, trade barriers, and responsible supply chains. Germany is also involved in partnerships targeting global public goods with a number of emerging economies.

Germany is engaging in development at the international level, especially in post-2015 processes and in tackling climate change. It is also involved in partnerships targeting global public goods – such as peace and security – with a number of emerging economies. Taking advantage of the government position on post-2015 and BMZ's Charter for the Future, Germany is well positioned to play a stronger role in promoting the implementation of the Sustainable Development Goals, at home and abroad. Its presidency of the G7 in 2015 offers a key opportunity for doing so.

Germany has established an overarching, value-driven policy for development co-operation, which seeks to advance sustainable development as both a domestic and global issue. BMZ now needs to translate the widely-owned vision into an operational framework that integrates the new ministerial priorities and helps work better across government, in order to inform programming and guide partners.

The German government has reaffirmed its commitment to meet the UN target of allocating 0.7% of its gross national income (GNI) as ODA and has announced important increases in its aid budget between 2014 and 2019. In 2014, German net ODA reached a historic high, bringing the ODA/GNI ratio from 0.38% to 0.41%. However, in light of Germany’s economic growth, further planned increases will only be sufficient to maintain ODA at a minimum level of 0.4% as a percentage of GNI, far from the 0.7% target. Germany has yet to adopt a timeline for meeting its ODA/GNI commitment.

Germany has taken further steps to streamline its institutional system. It has done so for policy by strengthening the Ministry for Economic Co-operation and Development (BMZ), and for implementation by merging three technical co-operation agencies to create GIZ. Germany now needs to revisit formal processes and refine BMZ’s business model to reinforce its steering function on German development co-operation and ensure that systems and procedures support context-based, flexible approaches in the field.

BMZ is increasing the predictability of German aid through multi-year commitments, but it could share long-term spending information more systematically with partner countries and has yet to finalise country strategies for more than half its partner countries since introducing a new template in 2012. While BMZ is increasingly combining technical and financial co-operation in an effective way, greater budget flexibility would help German development co-operation to adapt to evolving needs. Use of country systems varies across sectors and modalities, preventing Germany from meeting its commitment to make use of country systems the default approach. While technical co-operation is appreciated by partners, there may be benefits in using the various German instruments more flexibly and maximising the role of partner structures in programme implementation.

BMZ has strengthened its approach to results, which is now embedded in the commissioning process with implementing agencies. A results matrix which draws on indicators and data from partner countries provides the basis for GIZ and KfW programming and reporting. This matrix helps to clarify expectations and focus attention on what programmes can realistically achieve. To finalise its approach, BMZ needs to work out how to aggregate reporting from individual activities so as to use information on results consistently for policy, planning and budgeting. In doing so, it will have a better understanding of what constitutes success and how to measure performance. Embedding the results culture within BMZ will require steering from the top.

In Germany humanitarian assistance sits within the Federal Foreign Office; this is complemented by BMZ’s development and transitional aid; and BMZ’s special initiatives, which, at least in part, deal with the causes of, and fall-out from, humanitarian crises. There is a renewed political commitment in the German government to humanitarian aid through the coalition agreement. The Foreign Office has a new, strategic approach to humanitarian aid, covering both response and preparedness, an area where Germany is making significant efforts, both through its programming and on the global stage. The lack of clarity of BMZ’s transition strategy is limiting Germany’s ability to systematically support holistic responses in protracted crises and transition situations; the peer review team has been told that there are plans to redesign this area of the programme; this is welcomed. There is also scope for an increased budget share for humanitarian programming.