Development finance gap risks reversing decades of progress

This article is published in association with United Nations.

Global fragmentation, deepening geopolitical tensions and conflicts are putting decades of development progress at risk, the UN warned in a report published on Thursday – calling for stepping up investment to meet internationally agreed goals. 

The 2026 Financing for Sustainable Development Report assesses progress on the Sevilla Commitment, a 2025 agreement that aims to secure the $4 trillion needed annually to achieve the Sustainable Development Goals (SDGs) by the end of the decade. 

“Implementing the Sevilla Commitment is our best chance to demonstrate the global community’s enduring commitment to cooperation and to unlock the finance needed to keep the promise of the Sustainable Development Goals,” UN Deputy Secretary-General Amina Mohammed said ahead of the launch. 

Debt over development 

While a massive scale-up investment is needed to deliver the goals within the next four years, “regrettably, the financing gap is widening,” said UN Under-Secretary-General for Economic and Social Affairs (DESA) Li Junhua. 

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Development aid is falling sharply as developing countries – particularly the poorest and most vulnerable – face rising costs from environmental degradation and climate impacts, high costs of capital and mounting debt pressure. 

Among the report’s findings is that Official Development Assistance (ODA) dropped by 6 per cent in 2024 and by another 23 per cent the following year.  Meanwhile, debt servicing burdens have hit 20-year highs. 

Trade and tariffs 

“Multilateralism itself is under threat,” said Mr. Li, speaking at the report’s launch.  

“Powerful nations are redrawing trade and investment alliances, often at the expense of the poorest countries. This undermines the very foundations of global cooperation.” 

For example, average tariffs on exports from the world’s Least Developed Countries (LDCs) surged from 9 per cent to 28 per cent in 2025. For other developing countries, excluding China, average tariffs rose from 2 per cent to 19 per cent – a more than eightfold increase. 

Moreover, the conflict in the Middle East has triggered a significant shock to the already fragile global economy and developing countries are already feeling repercussions regarding energy, food, trade and debt sustainability. 

Bridge the gap 

The report also highlights positive developments, including record high spending on renewable energy in 2024 at $2.2 trillion, doubling investment in fossil fuels. South-South trade – that is between developing countries themselves – also increased fourfold over the past 20 years. 

“Implementing the Sevilla Commitment remains the only viable path to bridging the financing gap towards the SDGs,” Mr. Li concluded.  

“The world is now looking to the collective political will of Member States,” he said. “We must move from the rhetoric of commitment to the mechanics of concrete action.”