Saudi Arabia hopes to raise about $55bn over the next four years as it plans to step up its nascent privatisation programme with the government seeking to boost revenue and narrow its yawning budget deficit.
Mohammed al-Jadaan, the finance minister, told the Financial Times that Riyadh had identified a pipeline of 160 projects across 16 sectors, including asset sales and public-private partnerships, through to 2025.
Riyadh’s aim is to outsource the management and financing of health infrastructure and services to the private sector, as well as city transportation networks, school buildings, airport services and water desalination and sewage treatment plants. Asset sales will include television broadcasting towers, government-owned hotels and district cooling and desalination plants.
The programme is part of Crown Prince Mohammed bin Salman’s drive to overhaul the state-dominated, oil-addicted economy and modernise the kingdom.
“It’s not a choice any more, but a requirement by the central government that these services or these utilities will no longer be run by the government,” Jadaan said. “It’s taking it [privatisation] to the next stage.”
He said the goal was to raise revenue in Riyadh, which is grappling with a budget deficit that hit $79bn last year, equivalent to 12 per cent of gross domestic product, and improve state services.
The minister hopes to secure $38bn through asset sales and $16.5bn through public-private partnerships.
Jadaan has set the ambitious target of reducing its fiscal deficit to 4.9 per cent of GDP in 2021 as the kingdom looks to recover from last year’s twin shocks of the coronavirus pandemic and the slump in oil prices.
The privatisation programme does not include entities owned by the Public Investment Fund, the sovereign wealth fund that has become the dominant force in the economy under Prince Mohammed’s leadership, or further asset sales by Saudi Aramco, the state oil company.
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