Saudi Finance Minister Mohammad Al-Jadaan revealed that the Kingdom was seeking to collect USD55 billion from the privatization project over the next four years, adding that it was planning to boost the program in order to increase revenues and reduce the budget deficit.
The minister’s statements come in the wake of a recent decision by the Saudi Council of Ministers to approve the privatization system, which aims to rationalize public spending, increase state revenues, and raise the efficiency and competitiveness of the national economy in order to face regional and international challenges.
In remarks to the Financial Times, Jadaan noted that Riyadh has identified a portfolio of 160 projects in 16 sectors, including asset sales and public-private partnerships through to 2025.
He explained that the aim of this step was to increase revenues and reduce the budget deficit, which amounted to USD79 billion last year, which is equivalent to 12 percent of GDP, in addition to improving state services.
The minister said he hoped to secure USD38 billion through asset sales and USD16.5 billion through public-private partnerships.
He added that the Kingdom was seeking to reduce its fiscal deficit to 4.9 percent of GDP in 2021 in order to recover from last year’s twin shocks of the coronavirus pandemic and the slump in oil prices.
As for Aramco’s sales, Jadaan told the Financial Times: “There are two types of sales for Aramco. They can monetize their own assets like pipelines and recycle that money into new investments — that is their business,” he said.
“When it comes to Aramco’s shares, we will monetize them, recycle them and create more activity in the economy by unlocking new sectors through the PIF,” he added.
