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How Saudi Arabia is supporting “Entrepreneurs” in its 2022 budget?

How Saudi Arabia is supporting “Entrepreneurs” in its 2022 budget?

It is not surprising that the Saudi 2022 budget is concerned with supporting entrepreneurs, and the private sector in general; This is because, since the launch of Vision 2030, the Kingdom has changed the ways of planning and looking at the economy, and has opened the way for entrepreneurs and emerging entrepreneurs; to enhance their contribution to supporting the national economy.

Saudi Arabia’s 2022 budget stipulates that the Minister of Finance will be authorized to issue debt instruments, issue all types of Sukuk, and borrow and finance in all its forms, whether locally or internationally, regarding any of the following:

1 – Covering any deficit – that may arise – in the state’s general budget for the fiscal year 1443/1444 AH.

2 – Strengthening the state’s general reserve account when necessary.

3- Financing the approved capital projects whose costs are in the budget.

4 – Refinancing of debts due in the fiscal year 1443 / 1444 AH or the following fiscal years.

5- Financing the payment of explicit and implicit government guarantees.

Saudi Arabia’s 2022 budget and economic reforms

The truth is that the Saudi 2022 budget is on the same path of supporting and promoting economic reforms. His Royal Highness Prince Mohammed bin Salman bin Abdulaziz Al Saud emphasized; The Crown Prince, Deputy Prime Minister, and Chairman of the Council of Economic and Development Affairs, on the occasion of the approval of the Saudi 2022 budget, that the journey of economic transformation adopted by the Kingdom’s government continues to achieve the achievements and targets following the directives of the Custodian of the Two Holy Mosques.

The budget was a confirmation of the results achieved from economic and financial reforms aimed at promoting economic growth and financial sustainability together towards a vibrant society, a prosperous economy, and an ambitious nation.

He added that the government is committed in the 2022 budget to the amount of planned spending in the medium term, which was previously announced during the past year, and we also expect to achieve budget surpluses for the fiscal year 2022 AD; By completing work on developing the financial planning process and raising spending efficiency, in addition to developing diversified and more stable sources of government revenue, which supports the objectives of the Financial Sustainability Program, which seeks to complete the march towards enhancing economic stability and sustainability in the medium and long term.

His Highness the Crown Prince explained that the economic and structural reforms that have been implemented since the launch of the Kingdom’s Vision 2030 have contributed to reducing the negative effects associated with the pandemic. Until the end of the third quarter of 2021, the Kingdom achieved high rates of real GDP growth for the non-oil sector, which amounted to about 5.4 percent, driven by the growth of the private sector by about 7 percent.

Prince Mohammed bin Salman continued: “We have seen a significant impact on the growth of many economic activities and various sectors, some of which have returned to pre-pandemic levels, and this growth was accompanied by a decrease in unemployment rates among citizens from 12.6 percent at the end of last year to 11.3 percent in the middle of the year as a result of increasing job opportunities available to citizens.

Saudi 2022 budget

The private sector is a partner in economic development.

As long as the Kingdom of Saudi Arabia strives to support and enhance the contribution of entrepreneurs to the national economy, it was incumbent upon it to work to overcome all difficulties facing the private sector and push it forward.

In this context, His Highness the Crown Prince stressed the importance of the role of the private sector as a major and vital partner in development, and that the government, in addition to areas of spending in general, is implementing some major initiatives that will contribute to strengthening the role of the private sector. The National Investment Strategy and the Partner Program in addition to the Public Investment Fund program will contribute to providing great opportunities for the participation of investors in many sectors and different regions within the Kingdom.

He said that the total spending in the Kingdom is planned to reach 27 trillion riyals by 2030, including the investments of the Public Investment Fund, the private sector, government spending, and private consumption.

Investment & Strengthening the position of the private sector

For his part, His Excellency the Governor of the Public Investment Fund, Mr. Yasser Al-Rumayyan, explained that the fund, despite the challenges resulting from the repercussions of the Corona pandemic, has maintained its performance and seizes many investment opportunities, and invests in achieving its goals at the local and international levels, in line with its strategy.

Al-Rumayyan stated that the assets rose and exceeded a target by the end of the third quarter of this year to reach 1.8 trillion Saudi riyals. He has established 47 companies since 2016 in several strategic sectors such as real estate development, infrastructure, recycling, clean energy, and others.

Since 2017, more than 400,000 direct and indirect job opportunities have been created until the end of the second quarter of this year 2021.

He added that the fund’s strategy focused on 13 local strategic sectors, which were determined based on an evaluation of the sectors based on the global and local perspective and the sectors in which there is potential to stimulate and competitive advantage for the Kingdom, in addition to evaluating the priority of the sectors following the Kingdom’s Vision 2030.

Al-Rumayyan stressed that these sectors contribute to empowering the private sector and creating job opportunities, noting that a group of companies affiliated with the Fund signed development contracts worth more than 13 billion riyals, representing more than 70% of the value of the contracts of the Red Sea Development Company.

He announced that Roshan signed strategic partnerships with a group of Saudi companies to develop the first phase in the site of its first district in Riyadh, and the King Abdullah Financial District signed contracts worth SAR 10 billion to complete the works and activate the center.

Meanwhile, Al Jadiyah Company has signed development contracts worth more than 5.5 billion riyals. The works include the initial priority of infrastructure and the development of the first entertainment facades. The Fund established a specialized department to support national development and enhance the impact of its investments on the local economy.

He stated that the fund, through the Local Content Development Program, aims to increase the contribution of the fund and its subsidiaries to the local content to reach 60% in 2025, by expanding opportunities for local companies, stimulating local suppliers, increasing the localization of imported goods and services, and opening up prospects for investment opportunities to improve local supply chains.

Al-Rumayyan pointed out that the launch of a partner program headed by His Highness the Crown Prince; aims to support and stimulate major partnerships in the private sector, enhance their investment capabilities, and accelerate the implementation of their projects, which will reflect on economic growth, enhance local content, and provide jobs in the Kingdom.

Al-Rumayyan explained that the program aims to develop local investments to reach SAR 5 trillion by 2030.

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