New CEO named for Saudi’s $1.3trn private sector push

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• Abdulaziz bin Abdulrahman Al-Arifi to lead ‘Shareek’ programme
• Investment deals worth at least $925m signed during Q2
• Non-oil GDP growth picked up 5.9 percent in first half of year

A new CEO has been appointed to the Private Sector Partnership Reinforcement Program which aims to facilitate investments of $1.33 trillion from Saudi private sector businesses by 2030.

Abdulaziz bin Abdulrahman Al-Arifi, advisor to the Secretariat General of the Cabinet and a former CEO of finance at Jadwa Investment, has been hired to lead the programme, better known as Shareek.

The Large Corporate Investments Committee, chaired by Crown Prince Mohammed bin Salman bin Abdulaziz, issued the decision today, according to Saudi Press Agency.

• Manufacturing and mining help Saudi industrial output rise 20.8%
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Shareek, the Arabic word for partner, aims to enhance partnership with the private sector and increase the contributions of national companies to the sustainability of the national economy.

Shareek is expected to help Saudi Arabia jump from the 18th to 15th largest economy in the world by 2030 and is managed from Riyadh under the Public Investment Fund.

Saudi’s Ministry of Investment said last month that 49 major investment deals were signed during Q2 worth at least $925 million.

A total of 4,455 investment licences were issued in Q2, a 673.4 percent increase over the 576 licences issued in Q2 2021, although they numbered less than half that of the record levels seen in Q1 (9,383).

Khalid Al-Falih, Minister of Investment, said at the time: “Despite global headwinds, we are seeing strong interest from global investors in diverse industries to partner with Saudi Arabia.”

The Crown Prince launched the programme in March 2021 and is aligned to the wider objectives of Vision 2030, including economic diversification and increasing private sector contribution to GDP to 65 percent.

Al-Arifi holds a BSc degree in business administration from the Babson College in Massachusetts, US and a master’s degree in business administration from Stanford University.

He also served as director of the treasury at the National Shipping Company (Bahri), in addition to assuming several posts at the Saudi Capital Markets Authority and his membership of boards of directors in various sectors.

The appointment comes as Saudi Arabia’s government is set to deliver a budget surplus of 6.3 percent of GDP in 2022, the first since 2013.

S&P Ratings Agency said it forecasts a further surplus of 3.5 percent in 2023 before a fall in oil prices leads to a return to deficits in 2024 and 2025.

It affirmed its A-/A-2 ratings on Saudi Arabia,with the outlook remaining positive, saying it reflects strong GDP growth and fiscal dynamics tied to the country’s emergence from the coronavirus pandemic, rising oil production, and the government’s reform programmes.

S&P analysts said in a research note that real GDP expanded by 11 percent in the first half of 2022, its highest in over a decade. 

Non-oil GDP growth picked up 5.9 percent during the same period, with mining and quarrying, wholesale and retail trade, and manufacturing leading a broad-based economic growth. 

The economy’s diversification away from oil and upstream crude production continues with the non-oil private sector accounting for well over half of GDP, significantly higher than a decade ago although much of the non-oil sector is in petrochemicals and hydrocarbon-related activities. 

However, S&P cautioned that while reform efforts have increased freedoms and jobs for women, they have struggled to create sufficient jobs for the fast-growing population.