Jobs created

Norfund contributes to creating jobs directly in portfolio companies and indirectly through their value chains.

Development rationale

Creating and sustaining jobs is vital to reduce poverty. Jobs generate household income, are a basis for taxation, provide security, and can enable knowledge and skills development. It is a prerequisite that the jobs are in businesses that are financially viable to sustain the impacts. 

Investing in businesses and creating jobs encourages the transfer of technology and skills, equipping the workforce with the tools needed for innovation and productivity improvements. In essence, investing in job creation in developing countries can be seen as a catalyst for a virtuous cycle of growth, poverty reduction, and enhanced social stability. 

Following a period of stability in number of unemployed people worldwide, the pandemic brought on a surge in the number of unemployed individuals. Even though the level has come down from the peak during the pandemic, global unemployment levels maintain above the level that was achieved before the pandemic.  

Also in Norfund´s markets the unemployment and informal sector jobs remain substantially higher than before the pandemic. High levels of informal jobs and unemployment makes Norfund´s investments, targeted at creating and sustaining jobs ever more important. Investments not only support the immediate need for quality jobs but also lay the foundation for sustainable development by investing in specific sectors. By channeling funds into sectors and businesses with high growth potential, Norfund is stimulating economic growth.  

In Africa, nearly 83% of the jobs are within the informal sector. This means that the workers are unregistered, have no insurance or sick leave schemes and have limited access to training. Therefore, it is crucial to develop formal job opportunities and ensure that these are jobs where workers’ rights are protected.   

Avoiding further job losses and creating a substantial number of quality jobs in the formal sector in developing countries is therefore imperative to achieve growth and sustainable development.  

Results 2023

Record high number of jobs in Norfund portfolio companies 

By the end of 2023, a record high number of 625,000 people were employed in the companies in which Norfund is invested, either directly or through funds. 77% of these were permanent jobs.   

The below figure shows the number of jobs directly supported through the companies Norfund has invested in during the last five years. Figures are not directly comparable across years due to variations in the portfolio composition from new investments and exits. However, we see that since 2019 the number of direct jobs supported through our investments has increased by 64 %.

 Total jobs in Norfund’s portfolio companies

Note: The numbers are affected by new investments and exits from companies. Therefore, a sale of a large investment will affect these aggregated numbers greatly

Considering companies that Norfund has been invested in during two consecutive years allows for calculation of the jobs that are created. From the end of 2022 to the end of 2023, Norfund’s portfolio companies (with two consecutive years of reporting) reported a net increase of new jobs of 9 %, or 37,200 new jobs. This is a record high number. In 2022, the corresponding figure was 24 500. Thus, Norfund contributed 52 % more jobs in 2023 than in 2022. In 2020 the number of jobs created was low, mainly due to many companies struggling during the pandemic.  

 Jobs created

Note: Covering only investments with two consecutive years of reporting.

Jobs created are also affected by the composition of the portfolio in terms of size of companies and sector distribution. In addition, the figures on job creation are not attributed to the share of the investment held by Norfund.  

From 2022 to 2023, the development mandate delivered an estimated return, measured as IRR, of 1.8 % measured in the investment currency and 4.1 % measured in NOK. 

Approximately 38% of the total people employed in Norfund’s investees by the end of 2023 were women, and 19% were youth, defined as below 25 years.  

More than 400,000 people were employed in companies operating in Africa, making up almost 65 % of total employees in Norfund’s portfolio companies. 

23 % were employed in companies in Asia, 11 % were employed in companies in Latin America and 1% were employed in companies operating globally.   More than 167 000, 27%, of the jobs were in Least Developed Countries (LDC).  

Jobs per region

Joint Impact Model

Since 2020, Norfund has applied the Joint Impact Model (JIM) to estimate indirect jobs supported through our portfolio companies. We have applied the JIM to get an indication of the wider, indirect jobs effects than the direct jobs held in our portfolio companies. However, the results are modelled estimates, do not reflect actual numbers and should therefore be interpreted with caution.

This year, we are reviewing how to best use models and other analyses to keep learning and improve our understanding of the indirect effects of our investments. We are therefore not reporting estimates on indirect jobs through the JIM. Read more about the indirect job estimates for 2022 here.

Promoting job quality 

Norfund promotes job quality using the IFC Performance Standards (PS) on Environmental and Social Sustainability in our investment processes. 

The IFC PS is the key tool used by development finance institutions, such as Norfund, to assess the environmental and social risks of investments. One of the PS focuses on Labour and Working conditions and includes provisions for issues such as workers’ rights, health and safety, anti-discrimination and equal opportunity. The standards are aligned with the ILO’s core conventions.