|
Getting your Trinity Audio player ready...
|
The crown prince of Saudi Arabia says the oil company Aramco and the petrochemical firm SABIC will lead investments of five billion sewers ($ 1.3 billion) through the private sector of the country by 2030 under an economic diversification program.
The move, announced on Tuesday, aims to mobilize the private sector of the Gulf Arab state to help the economy reduce its dependence on oil exports, which still account for more than half of the state’s revenue and to develop new sectors to create jobs for millions of Saudis.
Read more news from Daily Research Editor
The program is part of 12 billion riyals ($ 3.2 billion) in investments planned for 2030, Crown Prince Mohammed bin Salman said in television comments. It also includes three trillion ($ 800 billion) from the Public Investment Fund (PIF) and four trillion ($ 1.1 trillion) under a new Saudi investment strategy, of which two trillion ($ 533 billion) would be foreign investment
The total amount would rise to 27 billion riyals ($ 7.2 billion) with government spending and domestic consumption.
“The new Shareek (Partner) program will help the private sector create hundreds of thousands of new jobs and will increase the private sector’s contribution to [gross domestic product] by up to 65 percent by the end of the decade,” the prince said.
Read more news from Daily Research EditorÂ
He later told reporters in a virtual briefing that Aramco and Saudi Basic Industries Corp (SABIC) would represent 60 percent of the five billion riyals ($ 1.3 billion) investment.
Prince Mohammed said the government had asked the largest participating companies to lower their dividends to raise capital expenditure.
‘This will lead to growth in the company so that stakeholders will own more money. In return, the Saudi government will help them with regulations, more subsidies and other incentives. The prince said the dividends for those who own shares in Aramco, which are listed on the local stock exchange in 2019, will remain stable.
Read more news from Daily Research EditorÂ
“We promised them that, and we will keep the promise,” he said. The Saudi government still owns 98 percent of the business.
Finance Minister Mohammed al-Jadaan told Reuters that 24 companies, most of which are publicly listed companies, would have two billion sewers ($ 533 billion) by 2025 and another three billion ($ 800 billion) by 2025. by 2030 will invest. PIF is a shareholder. in most of them, he added.
Read more news from Daily Research EditorÂ
Jadaan said the state would provide support, including soft loans from Saudi development institutions and tax incentives at free zones, in line with World Trade Organization guidelines.
The Crown Prince has said the government plans to drop its shares in the coming years and launch initial public offerings (IPOs) for projects it launches.
“We will recover the money. We must not keep our shares forever. Regardless of the mature investment we have, we need to list. “For example, if you own 70 percent of a company, PIF should keep the majority at 30 percent and sell 40 percent,” he told reporters.
Read more news from Daily Research EditorÂ
The prince said Aramco would sell more shares as part of plans to strengthen the sovereign wealth fund PIF, the main means of promoting Saudi investment abroad.
The prince said PIF, along with other sovereign wealth funds in the region, was working on a fund called “Invest In Saudi” worth between 500 billion riyals ($ 133 billion) and one billion riyals ($ 267 billion).
PIF supports local mega-projects such as the flagship tourism project at the Red Sea, the planned $ 500 billion Neom economic zone and the entertainment center in Qiddya.