Record growth in jobs and tax revenues from Norfund investments

June 18, 2024

Norfund’s annual report shows that Norfund’s investees are delivering record results in terms of new jobs and increased tax revenues.

“By supporting companies that create new jobs and finance public welfare through taxes, we see that we are helping to fight poverty in an effective, sustainable and scalable way,” says Tellef Thorleifsson, CEO of Norfund.

220 million unemployed people were looking for work in low- and lower middle-income countries in 2023, according to ILO.

At the end of 2023, as many as 625,000 people were employed in the companies in which Norfund has invested under its development mandate, either directly or through funds. Figures from investees Norfund has received reports from for two years in a row, show a net increase in new jobs of a record 9 per cent, or 37,200 new jobs, from 2022 to 2023. This is an increase of 52 per cent from 2022, when the figure was 24,500.

Paid work is the sustainable way out of poverty, and in a challenging year for many poor countries, we are pleased to be able to report a record increase in the number of jobs

Tellef Thorleifsson, CEO Norfund

Norfund also invests in access to energy and financial services, crucial prerequisites for businesses to develop that create a large number of indirect jobs. The annual report shows that in 2023, 420,000 new households gained access to renewable energy through companies in Norfund’s portfolio, and the financial institutions in the portfolio served 11.5 million more customers.

Increased tax revenues for developing countries in debt crisis

In total, companies in the portfolio under Norfund’s development mandate paid a record NOK 32.7 billion in taxes in 2023. Of this, NOK 21.2 billion was in Africa. A comparison of the figures from the companies Norfund received reports from over two years shows an increase in total tax paid of NOK 3.6 billion.

Total tax revenues from the companies in the portfolio account for more than half of total Norwegian aid in 2023, while the increase in tax revenues from 2022 to 2023 alone is almost NOK 2 billion more than what Norfund was transferred to its development mandate in the same year (NOK 1.68 billion).

“Increased tax revenues are crucial for governments in poor countries to become independent of aid and be able to afford to provide basic services such as education, healthcare and infrastructure development, while at the same time being able to service debt”

Tellef Thorleifsson

The annual report shows that the return from Norfund’s development mandate was 1.8 per cent (IRR) in investment currency, giving an average return per year since inception of 4.8 per cent. In NOK, the return was 4.1 per cent in 2023, giving an average return of 7.8 per cent since inception.