Rethinking Nutrition Financing for Greater Impact and Sustainability

Later this month, policymakers, international organizations, and global partners will gather in Paris for the 2025 Nutrition for Growth (N4G) Summit. This should be a pivotal opportunity for the global nutrition community to secure policy and financial commitments and elevate nutrition as a priority on the global development agenda.

But in today’s highly uncertain development landscape, funding for nutrition-specific interventions—delivered through the health sector to address the immediate causes of undernutrition—is increasingly fragile.

In a new CGD policy paper, we analyze challenges and opportunities for nutrition-specific financing, drawing on relevant insights from the broader global health landscape. Below, we summarize three key dynamics of the nutrition-specific financing landscape and offer four policy recommendations to enhance impact and sustainability.

Rising needs, shrinking resources

The global architecture to address undernutrition—a leading cause of under-five mortality—is evolving against a backdrop of shrinking donor resources and constrained budgets in low- and middle-income countries (LMICs). This puts available funding for nutrition-specific interventions at risk amid growing needs.

Still, despite strong evidence of impact and cost-effectiveness, nutrition interventions have remained underprioritized and underresourced. Consider these statistics: less than 1 percent of official development assistance goes to nutrition-specific interventions, and nutrition receives a small share of domestic health sector budgets, averaging just 3 percent in LMICs.

As a result, funding gaps are significant. For example, as of 2022, there is an estimated $2.1 billion shortfall in donor funding needed to meet nutrition-specific targets. This gap risks widening even further as several major European donors are slashing their aid budgets and the United States is actively disengaging as a donor, all while LMICs are facing mounting debt pressures.

Key dynamics posing challenges for funding

Nutrition-specific financing faces three key challenges:

1. Highly fragmented architecture

The nutrition-financing landscape is complex and marked by various degrees of fragmentation.

One factor contributing to this fragmentation is the complex web of funding flows from multiple donors, delivered through myriad channels to recipient countries. This complexity leads to duplication and inefficiencies at both global and national levels, ultimately undermining government ownership. The absence of a comprehensive data source to systematically track nutrition financing flows further exacerbates these challenges.

Figure 1. Fragmentation across financing flows for basic nutrition

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Additionally, differences in how the development and humanitarian sectors fund nutrition create misalignment, as short-term, unpredictable emergency funding can undermine longer-term efforts to address undernutrition.

2. Reliance on volatile external funding from a small group of core donors

Nutrition-specific financing is dependent on external aid. With donor contributions to nutrition-specific funding plateauing since 2020, the outlook for future funding remains highly uncertain.

Figure 2. Disbursements to priority interventions by the top 10 nutrition donors, with average annual percent change

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Still, there are notable trends from the past decade. First, the World Bank has risen as a prominent funder, now ranking as the top donor to the World Health Assembly priority nutrition interventions. However, there is still room to further leverage its role going forward. Second, private foundations—particularly the Gates Foundation—are also significant contributors. In fact, the Gates Foundation’s contributions are comparable to, and even greater than, several bilateral donors. Lastly, recent aid cuts by key bilateral donors underscore long-standing volatility. Notably, the UK has plummeted down the rankings in recent years, particularly since slashing its aid budget for nutrition in 2021 by a staggering 60 percent compared to the previous year. And there might be more cuts on the horizon, as the UK’s overall aid budget is set to shrink further from 0.5 percent of gross national income to 0.3 percent by 2027.

3. Low domestic spending that is not sufficiently incentivized

Domestic spending on nutrition by LMIC governments remains low and insufficient to meet rising needs. LMICs allocate less than 2 percent of health budgets to nutrition-specific interventions, with some low-income countries spending as little as $0.43 per person. Even in periods of economic growth, nutrition spending in many LMICs has stagnated or declined, reflecting a lack of prioritization.

Furthermore, reliance on donor support can inadvertently disincentivize domestic investment by creating a perception that nutrition will continue to be externally financed.

Figure 3. Domestic general government expenditure on nutritional deficiencies in low-income and lower-middle-income countries

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Policy recommendations

1. Leverage additional resources for nutrition by pooling financing with multilateral development banks

There is untapped potential to further leverage the role of the multilateral development banks (MDBs)—the World Bank and regional development banks (RDBs)—in supporting nutrition. One promising avenue to pursue is pooling grant financing with MDB operations to generate more on-budget resources for nutrition and promote better alignment with country priorities. MDB concessional financing is particularly relevant as major bilateral donors pull back funding.

2. Explore options to make external financing for nutrition more stable and predictable

Identifying stable and predictable financing mechanisms is more urgent than ever to mitigate volatility faced by nutrition financing. Innovative financing mechanisms, such as bond models and endowments for nutrition, can provide a steady stream of funding and may be well suited to enhance demand certainty and visibility for manufacturers of nutrition products.

3. Prioritize long-term planning to prepare countries to transition from external financing to domestic financing

The nutrition financing community, together with partner countries, should establish a clear and realistic pathway to sustainability that adequately prepares countries to transition from external financing. A key step in this process is incentivizing domestic investment in nutrition, including through “co-financing” mechanisms designed to promote sustainability and country ownership.

4. Ensure strong accountability for performance and results

To strengthen accountability for performance and results, global nutrition partners should look to deploy results-based funding approaches where relevant. These could be in the form of “performance compacts” with governments that link funding to progress on nutrition coverage and quality indicators, or performance-based lending from MDBs. Such approaches can improve results, data transparency, and health systems integration.

The path forward

The upcoming N4G Summit will take place amid a broader funding crisis for global health and development. The role of the MDBs and private donors may be particularly critical to help fill near-term gaps left by shrinking bilateral support and overstretched domestic budgets. But overcoming long-standing challenges will require reforming the nutrition-specific financing landscape for lasting impact and sustainability. A unified approach depends on sustained investment and collective action from all stakeholders, and it starts with integrating nutrition financing into broader discussions on the evolving global health financing architecture.