At the end of March, Saudi Crown Prince Mohammed Bin Salman announced the launch of a new ‘Shareek’ partner programme between the private and public sectors to raise domestic investments to transform the economy as a part of his ambitious Vision 2030 project.
The aim is to mobilise the private sector to help diversify the economy away from oil exports, which still account for more than half of Saudi’s GDP, and help to create jobs for millions of Saudi citizens. Saudi oil giant Aramco and petrochemical firm SABIC are to lead domestic investments of SAR5 trillion (USD1.3 trillion) by the local private sector.
The overall investment programme encompasses three main initiatives with a SAR10 trillion target over the next ten years. In addition to the ‘Shareek’ programme, there is the Public Investment Fund (PIF) investment programme, as well as the soon-to-be-announced National Investment Strategy (NIS).
The PIF is intended to contribute SAR3 trillion in investments over the same period. The PIF domestic investments averaged SAR62 billion over the period from 2016 to 2020 and is now targeting annual investments of SAR150 billion over the period 2021 to 2025. Extending this level of annual investments to 2030 would bring cumulative investments by the PIF to SAR1.5 trillion over the 2021 to 2030 period.
The National Investment Strategy (NIS) is intended to generate a further SAR4 trillion in investments over the same period, which is estimated to include an ambitious target of SAR2 trillion in Foreign Direct Investments (FDI).
The Crown Prince said” “We’re talking with the big companies and the private sector, this is a huge opportunity. This is a new Kingdom of Saudi Arabia where spending is more than what has been spent in the past 300 years.”