Saudi unveils $19.2bn stimulus package for private sector

Saudi Arabia has unveiled a SAR72bn ($19.2bn) stimulus package to boost the private sector in 2018.

The plans form part of a four-year stimulus programme announced last year.

They include 17 different initiatives the government hopes will create direct and indirect jobs.

Earlier this week the government unveiled plans to increase electricity and fuel prices.

It said the money saved from lifting subsidies would be used to support a new citizen’s account programme, which will make its first payments to households on December 21, and provide private sector stimulus packages.

Read: Saudi to increase electricity, fuel prices in Q1

The Saudi private sector has been hit particularly hard by the slump in oil prices, which has seen government spending on contracts cut.

Crown Prince Mohammed Bin Salman is seeking to wean the economy off oil and attract new investment through the Vision 2030 reform programme.

Read: New Saudi mega city NEOM is Crown Prince’s desert dream

The plans include new bankruptcy legislation, which commerce and investment minister Majid Al-Qasabi told Bloomberg he expected to be in place within three months, and separate laws for commercial asset-based financing and franchising that are expected to be ready within six months.

Read: Saudi Shoura Council approves draft bankruptcy law

The stimulus package

The private sector stimulus package includes SAR21bn ($5.59bn) for housing, SAR14bn ($3.73bn) for efficient home design and engineering and SAR5bn ($1.3bn) for an export-import bank.

Other plans include a SAR1.5bn ($399m) fund to support troubled companies, SAR2.56bn ($682.5m) to rollout broadband and fibre optic networks, SAR13.87bn ($3.69bn) to build the kingdom’s technology sector and several initiatives to support small and medium enteprises (SMEs).

These include SAR1.6bn ($426.6m) for indirect lending to SMEs, SAR2.8bn ($746.5m) for an SME investment fund and SAR7bn ($1.86bn) to refund government fees paid by new SMEs.

Elsewhere, SAR100m ($26.6m) has been set aside for offices, SAR20m ($5.3m) for a private sector platform and SAR80m ($21.3m) for private sector workshops.

The government said the package was intended to boost the competitiveness of the national economy, develop its products, improve the business and investment environment and enhance the private sector’s role in development.