Vision 2030 has created a substantial number of opportunities for foreign businesses seeking expansion into Saudi Arabia. The Vision 2030 aim is improving the Saudi economy and diversifying it away from oil. To support the objectives of Vision 2030, the Saudi government launched the National Transformation Program 2020 (NTP), to develop initiatives and detailed implementation plans.
Opportunities are increasing in industries such as: power and renewable energy, mining, water and waste management, oil, gas, petrochemicals, tourism and hospitality, communications, data and IT, transport, healthcare and pharmaceuticals, agriculture, aquaculture and construction of affordable housing and transport.
The private healthcare industry is growing in Saudi, part of the NTP, is to have greater participation of the private sector in the healthcare industry. The NTP have made the following objectives:
- Increase spending in the private sector from 25% to 35%
- Increase total revenue generated by the private sector from SR300 million to SR4 billion.
- Ensure sufficient supply of basic medicines
The government will spend SR29 billion on the restructuring of primary health care, establishing private-public partnerships, privatizing one of the Saudi medical cities and localization of the pharmaceutical industry. Foreign pharmaceutical companies are being invited to develop manufacturing plants in Saudi with public-private partnerships and joint ventures with Saudi nationals. As an incentive, the government are also giving exclusive distribution advantages and preferences to these companies for volume tenders in the future.
The NTP targets set for transport include:
- To increase private sector contribution to railway projects from 5% to 50%
- Increase contribution to port projects from 30% to 70%.
The Ministry of Transportation will invest SR5.5 billion into private sector operation and maintenance concession contracts and to develop an integrated program that will increase the efficiency of ports.
In the housing industry, NTP objectives include:
- Increase real estate contribution to GDP from 5% to 10%
- Increase percentage of new and unoccupied housing units to eligible citizens from 10% to 50%.
This is an extensive opportunity for foreign residential construction and development companies looking to enter the Saudi market. The Ministry of Housing will spend SR59 billion over the next 4 fiscal years to promote the success of these objectives through; creating savings programs to allow eligibles to save for a portion of the cost to own their own home, encouraging companies in the private real estate developing sector to invest in the development of housing, by fast tracking licenses and special financing packages, and establishing partnerships with private sector developers to develop government-owned land into large-scale housing projects.
The objectives set for 2020 in the water industry include:
- Increase the percentage of water desalination through strategic partnerships from 16% to 52%
- Increase the percentage of treated water production from 0% to 20%
- To increase the percentage of cities with water and sewage services from 42% to 70%.
The Ministry of Environment, Water and Agriculture will spend SR12.9 billion, ensuring that all cities have access to the services offered by The National Water Company, in partnership with the private sector.
Targets of NTP for technology include:
- To increase the number of establishments to develop local content from 8 to 17
- To increase the number of technology companies from universities, through the “Innovative Companies Program” to 800
- To increase the number of localized and developed technologies in specific sectors to 125
- To increase the number of patents issued by the government from 700 to 5000
The King Abdulaziz City for Science and Technology will spend over SR8.3 billion including the localisation and transfer of technology in mining, health, transport, logistics, water, oil and gas.
Energy, mineral resources and industry
The NTP targets for energy, mineral resources and industry include:
- Decreasing water and electricity subsidies by SR200 billion
- Increasing the annual non-oil exports to SR330 billion
- Increasing the percentage of power plant electricity generation through strategic partners to 100%
- Increasing local content in total expenditure from 36% to 50% in private and public sectors
- Increasing the volume of private sector investments in less-developed regions from 0% to SR28 billion.
- Increasing local pharmaceutical manufacturing from 20% to 40% in the total market
The Ministry of Energy, Industry and Mineral Resources will invest SR2.5 billion through coordinating the relevant bodies to build production manufacturing centres.
- To increase the number of tertiary students in non-governmental schooling from 6% to 15%.
The Ministry of Education will invest over SR24 billion to encourage private sector investment in public education.
The NTP objectives for tourism are focused on Haj and Umrah, they include:
- Increasing total new tourism from SR145 billion to SR171.5 billion
- Increasing total revenue from partnerships with the private sector from SR80 million to SR19 billion
To aid this the Saudi Commission for Tourism & National Heritage will spend over SR10 billion on initiatives to develop Ola City, Uqair, Farasan Islands and Okaz City.
The Vision 2030 and NTP’s objective is to encourage the progression of foreign businesses establishing themselves in Saudi. To increase the appeal to foreign businesses, the Saudi government are committed to providing incentive’s to businesses that transition into the Kingdom. The above is only an overview list of all the NTP objectives, and should be viewed as such.
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