Saudi Minister of Finance and Chairman of the Financial Sector Development Program Committee, Mohammed Al-Jadaan, said that Saudi Arabia continues, under Vision 2030, “the ongoing process of economic development thanks to the financial and economic reforms that lead us towards a bright and developed future in the financial sector.”
He added that the Financial Sector Development Program seeks to achieve an economic and advanced future, by connecting the financial sector to the digital and technical economy, and exploiting modern technologies such as artificial intelligence and big data.
Al-Jadaan’s words came in the introduction of the annual report of the Financial Sector Development Program, one of the eleven executive programs launched by the Council of Economic and Development Affairs to achieve the goals of Vision 2030.
The program aims to develop and diversify the financial sector to support the development of the national economy, stimulate savings, financing and investment, and increase the sector efficiency and ability to confront and address challenges.
The finance minister stressed that his country maintained its progress in competitive indicators related to the financial market, ranking third among the most competitive countries in the G20, according to the Global Competitiveness Center of the International Institute for Administrative Development.
He added that the number of financial technology companies exceeded the targets of 2023, reaching 216, and approached the desired goal of 525 firms by 2030.
For his part, Minister of Investment Khaled Al-Falih said in the annual report of the Financial Sector Development Program that in light of geopolitical fluctuations, high financing costs, and strict monetary policies aimed at curbing high inflation rates, Saudi Arabia affirmed its commitment to its strategic vision and was able to adapt to the complexities of the global scene.
He added that the country moved forward with structural financial and economic reforms that resulted in lower inflation rates and enhanced the attractiveness of the investment climate, which in turn led to raising the Kingdom’s credit rating to A+.
Al-Falih noted that Saudi Arabia has also topped the Middle East and North Africa region in terms of the volume of venture investments, and witnessed a remarkable growth in the number of investment licenses for financial and insurance institutions.
Moreover, the minister said that the Ministry of Investment, in cooperation with various government agencies, contributed to attracting some of the most important international financial institutions to the Kingdom, enabling foreign direct investment in the insurance sector, and listing the first exchange-traded fund to track Saudi stocks on the Hong Kong Stock Exchange, in order to make the Kingdom a global financial hub.
Minister of Economy and Planning Faisal Al-Ibrahim said in the report that the achievements of the Financial Sector Development Program contributed to the growth of the volume of financial, insurance, and business services activities, by about 5.2 percent on an annual basis until the end of the third quarter of 2023.
The program’s efforts, led by the Central Bank and the Capital Market Authority, also helped increase the financing capacity of the Kingdom’s economy, thus supporting the objectives of the National Investment Strategy, he added.
Al-Ibrahim noted that the program works to support the diversification and development of investment financing sources through the financial market, and to attract foreign investment, through private financing channels affiliated with investment funds, in addition to the financing platforms of financial technology companies.
In the report, Governor of the Central Bank of Saudi Arabia, Ayman Al-Sayari, pointed out the continuation of initiatives aimed at developing regulatory frameworks and empowering the financial technology sector.
Those initiatives included issuing rules regulating postpaid companies, instructions for practicing digital brokerage activity, in addition to working to digitize supervisory procedures. He pointed out that the number of technology companies exceeded the 2023 targets, reaching 216.
The Chairman of the Capital Market Authority, Mohammad Al-Kuwaiz, said that in order to stimulate foreign investment, raise the attractiveness and efficiency of the financial market, and enhance its international competitiveness, the Kingdom adopted rules regulating foreign investment in securities, which helped increase the volume of foreign investments to SAR 401 billion ($106.9 billion).
The head of the Global Investment Finance Department at the Public Investment Fund (PIF), Fahd Al-Saif, stated that the Fund has a role in empowering small and medium-sized institutions, in order to increase their contribution to the domestic product, through the various efforts made by its portfolio companies.
He also revealed that the PIF seeks to raise the percentage of local content contribution in its projects and subsidiaries to 60 percent by the end of 2025.
For his part, the Chief Administrator of the National Development Fund, Khaled Al-Shareef, said that the Fund, through the Small and Medium Enterprises Bank, played an important role in developing the financial sector, by identifying needs and filling the financing gaps for various economic sectors, as well as improving the financing services provided to the SMEs.
According to the report, the Central Bank aspires to achieve a set of goals in 2024, including empowering local and international financial technology companies in the Saudi market, in addition to launching a number of digital banks, and a project for general rules for savings products.
As for the Capital Market Authority, it aims to increase the attractiveness of the Saudi market for foreign investors, and raise foreign investors’ ownership of the total market value of free shares to reach 17 percent by the end of this year.
