Spending efficiency program saves $106bn in four years

Spending efficiency program saves $106bn in four years
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Top Saudi officials attend a dialogue session titled ‘Vision 2030 Creates Future Opportunities’ in Riyadh on Sunday to review a saving initiative. (SPA)
Spending efficiency program saves $106bn in four years
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Saudi Finance Minister Mohammed Al-Jadaan expressed satisfaction over the private sector’s contribution to the Kingdom’s economy. (SPA)
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Updated 03 May 2021

Spending efficiency program saves $106bn in four years

Spending efficiency program saves $106bn in four years
  • Saudi finance minister says private sector’s contribution to the initiative has risen from 45 percent to 51 percent in 2020

RIYADH: Saudi Arabia has saved SR400 billion ($106 billion) over the last four years as a result of a spending efficiency program implemented as part of the Vision 2030 reform plans, according to Minister of Finance Mohammed Al-Jadaan.

Speaking at a dialogue session in Riyadh titled “Vision 2030 Creates Future Opportunities,” a meeting of the chairs of the Vision 2030 Realization Program Committees, Al-Jadaan said the savings came from a careful review of all projects to see where unnecessary spending could be cut.

A number of experts and academics told Arab News the key to the success of the savings initiative was the enhanced relationship between the public and private sectors and the drive for increased privatization of state assets.

In January, the CEO of the National Center for Privatization said in a TV interview that the center had raised SR3 billion in revenue from the sale of state assets in 2020 and was aiming to raise at least SR15 billion in 2021.

Abdullah Alyousef, CEO of ALIA ICT, one of the Kingdom’s fastest-growing information and communications technology firms, said the savings the minister outlined will increase investors’ confidence in the private sector and make them eye long-term investment opportunities in a more favorable way. “The private sector works with the government sector in different scopes and fields in a way that complements one another in order to achieve sustainable development, especially in terms of megaprojects,” Alyousef said.

The private sector works with the government sector in different scopes and fields in a way that complements one another in order to achieve sustainable development.

Abdullah Alyousef, CEO of ALIA ICT

In his dialogue session, Al-Jadaan said the Kingdom’s private sector participation program will enable the private sector to undertake many public sector projects offered by the government. He added that this was already taking place, as the private sector contribution to the program had risen from 45 percent to 51 percent in 2020.

Alyousef pointed out that this success would go some way to achieving the Vision 2030 goal for the private sector to account for 65 percent of gross domestic product (GDP) by 2030. The government is working hard to increase this by boosting the contribution of small and medium-sized enterprises (SMEs) from 22 percent to 35 percent by 2030. SMEs are regarded as economic growth drivers that can generate jobs for Saudi locals.

Dr. Mohammed Makni, the dean of the faculty of economics and management science at Imam Muhammad ibn Saud Islamic University, said good governance and transparency were key to encouraging more public-private partnerships.

In the past, the public sector used to bear the expenses of everything but today it has engaged the private sector in this process.

Dr. Mohammed Makni, Academic

Makni, who focused on the performance of listed companies and corporate governance, noted that many of the reports issued by the Ministry of Finance, including quarterly reports on the budget, outlined economic activity and performance in the Kingdom and whether Vision 2030 goals were being made and on target.

“We have seen an excellent performance by government agencies in terms of investment over the past five years. In the past, the public sector used to bear the expenses of everything but today it has engaged the private sector in this process, thanks to the Saudi leadership, who encouraged such a decision,” he said. Makni said it was important for the success of the national economy to reduce the pressure on government spending. The private sector will ease some of the burdens on the public sector and utilize its expertise to develop and manage projects that are being targeted for privatization.

At the dialogue session, the chairman of the National Transformation Program Committee, Mohammed Al-Tuwaijri, said 10 government ministries harmonize on a daily basis around specific goals related to Vision 2030. He added that empowering the private sector is one of the top priorities.


France’s EDF helping Saudi Arabia achieve renewable energy targets

France’s EDF helping Saudi Arabia achieve renewable energy targets
Updated 30 min 28 sec ago

France’s EDF helping Saudi Arabia achieve renewable energy targets

France’s EDF helping Saudi Arabia achieve renewable energy targets
  • Despite pandemic delays, Kingdom’s largest wind farm set to begin operations this year

DUBAI: Like many executives around the world, Bruno Bensasson hasn’t been on a plane much in the last year. However, one of the few flights he did take recently was to Riyadh to check up on the progress of two massive renewable energy projects, showing the French company’s dedication to both the Kingdom and the renewable energy sector.

Saudi Arabia is aiming to generate 50 percent of its energy from renewables by 2030, with the remainder provided by gas. Bensasson is chairman and CEO of EDF Renewables, a subsidiary of French state-controlled
power group EDF.

His flight to the Kingdom was for the unveiling of a solar power plant in Jeddah, which is being built in partnership with Abu Dhabi’s renewable energy company Masdar and privately owned Saudi firm Nesma Co.

The consortium was awarded the 300-megawatt utility-scale photovoltaic solar power plant by the Saudi Ministry of Energy after it submitted a bid of SR60 ($16.24) per megawatt hour. The group signed a 25-year Power Purchase Agreement, and the plant is expected to be operational in 2022.

“These large-scale renewable installations are perfectly in line with the EDF Group’s CAP 2030 strategy, which aims at doubling its renewable energy net capacity in operation worldwide, between 2015 and 2030, from 28 to 60 gigawatt net,” Bensasson said at the time.

As of the end of 2020, 13.7 percent of EDF’s electricity output comes from renewable energy, with 76.5 percent coming from nuclear, 9.3 percent coming from fossil fuels (excluding coal) and the remaining 0.4 percent coming from coal.

EDF Renewables’ other big project in the Kingdom is the 400-megawatt Dumat Al-Jandal utility-scale wind farm project, located 900 kilometers north of Riyadh in the Al-Jouf region. The Middle East’s largest wind farm, construction began in August 2020 and reached the halfway point in April this year.

“We are now aiming at having all the turbines in operation I would say by Autumn 2021,” Bensasson told Arab News. Similar to the solar power plant, the wind farm was built as part of a consortium consisting of EDF Renewables and Masdar.

The $500 million wind farm will feature 99 wind turbines, each with a power output of 4.2 megawatts. It is predicted that that the first turbine will start creating power in the coming weeks, and when complete, will power 70,000 Saudi households per year and save 988,000 tons of carbon dioxide, helping the Kingdom achieve its Vision 2030 and Saudi green goals. Like many projects around the world, the coronavirus disease (COVID-19) pandemic has slightly delayed progress on the project. “There were some difficulties for staff and construction workers to access the site last year. We perfectly understand that, so it took some months — several months — to have the possibility to access the site,” Bensasson said.

It was not only the wind farm that was impacted — coronavirus affected the entire region. The Middle East saw a 5 percent year-on-year increase in its renewable energy capacity last year, down from 13 percent growth in 2019, according to the UAE-based International Renewable Energy Agency.

However, the global agency said that despite the slower growth in 2020, Saudi Arabia’s capacity has grown significantly over the last nine years — starting at only 3 megawatts and increasing to 413 megawatts in 2020.

Bensasson has worked in the renewable energy industry for almost 20 years, but believes that only now the technology has started to become a viable reality.

He said: “It’s my day-to-day reality, it’s really a booming reality. I would say that it has really changed since 2010. To give you a figure, in 2000, 70 percent of solar was developed in Europe, especially in Germany, Italy and Spain. And you will agree that they are not the biggest or sunniest countries. And same for wind. It’s totally different. About 60 percent of the growth now is within China and India. “Many countries have opted in.

And the reason for this shift, I would say, is twofold: One is economic and the other  is ecological.” Bensasson added that another factor in the growing popularity of renewables is the cost of wind production dropping 8 percent per year, and solar by about 15 percent per annum, making them “no-brainer solutions for many countries.”

EDF has been active in the Middle East for 20 years and has offices in Riyadh, Abu Dhabi, Dubai, Bahrain and Doha, with 199 employees.


$18m Saudi ready meals market to grow at annual rate of 5.4%

$18m Saudi ready meals market to grow at annual rate of 5.4%
Updated 35 min 21 sec ago

$18m Saudi ready meals market to grow at annual rate of 5.4%

$18m Saudi ready meals market to grow at annual rate of 5.4%
  • The ready meals segment consists of convenience food that requires minimum or no further preparation before consumption

RIYADH: The Saudi ready meals market was valued at $18.18 million last year and is forecast to grow at an average yearly rate of 5.43 percent over the next five years, according to a report by US-based research company Reportlinker.

“During COVID-19, individuals in Saudi Arabia exceeded their needs and rushed to buy and stock up on groceries as they feared food insecurity. Among Saudi consumers, stress-eating became very common due to lockdown,” the report said. The research also claimed that due to the closure of supermarkets at certain periods during the pandemic, online shopping became a necessity and this supported the surge in demand for ready meals.

“In emerging markets, like the Middle East, a relatively increasing disposable income is creating a new class, which is eager to experience new goods and services,” the report added. Despite concerns of food shortages in western countries, Ahmad BinDawood, CEO of BinDawood Holding, one of Saudi Arabia’s biggest supermarket operators, told Arab News earlier this month that this was not the case in  the Kingdom.

“The operation level that happened here, especially from the government side and us as retailers, and from the customers’ side, was amazing,” he said. “We made sure that there were enough supplies always in the market.”


Summit seeks ‘New Deal’ to ease Africa’s economic woes

Summit seeks ‘New Deal’ to ease Africa’s economic woes
Updated 41 min 53 sec ago

Summit seeks ‘New Deal’ to ease Africa’s economic woes

Summit seeks ‘New Deal’ to ease Africa’s economic woes
  • African economies risk running into a ‘financial gap’ of $290 billion by 2023

PARIS: French President Emmanuel Macron will on Tuesday host a virtual summit of European and African leaders to seek solutions to the financial crisis in Africa, where governments hope to boost development while managing massive debts.

The “summit on financing African economies,” bringing together 30 heads of state and government via videoconference, was planned last year after the International Monetary Fund (IMF) calculated that African economies risk running into a total “financial gap” of $290 billion by 2023.

Economic growth on the continent, which experienced its first recession last year, is expected to rebound to 3.4 percent this year and 4 percent in 2022.

A moratorium on debt servicing, put in place in April 2020 by the G20 and Paris Club group of creditor nations, has given Africa a bit of breathing space, suspending the repayment of €5.7 billion ($6.9 billion) by 50 countries.

The G20 also convinced China, by far the biggest bilateral lender on the continent, and private creditors to take part in future debt negotiations. But this won’t be enough.

“We are collectively in the process of abandoning Africa to solutions that date from the 1960s,” Macron said last month, calling for a bold “New Deal” for Africa.

The French leader warned of the risks of failing to act, including reduced economic opportunities, increased migration and “the expansion of terrorism.”

The coronavirus disease (COVID-19) pandemic has exacerbated the problems on the continent.

The African leaders called for an “immediate moratorium” on the servicing of all external debts until the end of the pandemic, and the ring-fencing of development aid.

They also urged the IMF to issue African nations special drawing rights (SDRs) convertible to global currencies like the dollar, euro or yen, to provide them with “the liquidity essential for the purchase of basic products and essential medical equipment.”

Macron has also suggested that the IMF sell gold to fund interest-free loans to African countries.

The conditions proposed by the IMF in exchange for its support are still under discussion.

On Monday, Ivory Coast President Alassane Ouattara asked the IMF to grant African states hoping to benefit from its financing more leeway in their public deficits.

Oxfam has called on the IMF and the World Bank to end “unfair or regressive fiscal conditionalities in the context of their loans and programs.”


EU pledges $9.7 million in fight against desert locusts in Africa

EU pledges $9.7 million in fight against desert locusts in Africa
Updated 45 min 30 sec ago

EU pledges $9.7 million in fight against desert locusts in Africa

EU pledges $9.7 million in fight against desert locusts in Africa
  • The latest outbreak is the worst recorded locust upsurge in Ethiopia and Somalia for 25 years

DUBAI: The EU has pledged €8 million ($9.72 million) toward the fight to combat the spread of desert locusts in Africa.

The EU contribution was from its European Civil Protection and Humanitarian Aid Operations (ECHO) and was welcomed by the director general of the UN’s Food and Agriculture Organization (FAO), Qu Dongyu.

“I want to thank the EU and all other supporters for their generous contribution and ongoing assistance in the battle to control the desert locust upsurge, enabling critical livelihood-safeguarding activities,” Dongyu said.

“National governments in collaboration with FAO and partners have achieved major progress in controlling this pest in East Africa, but operations must continue and we cannot afford to let down our guard.” The desert locust is considered the most destructive migratory pest in the world and a small swarm covering 1 sq. km. can eat the same amount of food in one day as 35,000 people.

The surge in the spread of the pest began in early 2020, but experts have warned that recent rainfall in the Horn of Africa has enabled swarms in eastern Ethiopia and northern Somalia to mature and lay eggs.

The latest outbreak is the worst recorded locust upsurge in Ethiopia and Somalia for 25 years and the worst infestation that Kenya has experienced in 70 years.

“As the region is already extremely vulnerable, given three years of drought followed by last year’s heavy rains and floods, compounded by COVID-19 and insecurity, desert locust swarms represent an additional shock that can have severe consequences for food security and livelihoods,” Keith Cressman, senior locust forecasting officer at FAO’s Desert Locust Information Service (DLIS), told Arab News in February.

Although Saudi Arabia has fought to contain desert locusts for decades, the FAO said the impending swarms pose a far greater threat to the Kingdom, Eritrea, Sudan and Yemen than those seen previously.

The Saudi government is taking precautions thanks to a well-established national program and the work of the Ministry of Environment, Water and Agriculture’s Locusts and Migratory Pests Control Center, based in Jeddah.


Peru’s GDP up 18.21% in March as industry hits its stride

Peru’s GDP up 18.21% in March as industry hits its stride
Updated 25 min 9 sec ago

Peru’s GDP up 18.21% in March as industry hits its stride

Peru’s GDP up 18.21% in March as industry hits its stride
  • The world’s second largest copper producer saw a 15.37 percent expansion in the mining and hydrocarbons sector

LIMA: Peru’s economic activity shot up 18.21 percent in March compared to single-figure contractions over the previous two months and a 16.76 percent drop in March last year as its key sectors hit their stride following lengthy lockdowns since the coronavirus disease (COVID-19) pandemic hit, the government said.

Production in the first quarter reached overall growth of 3.80 percent and contracted 9.48 percent in the 12 months through March, statistics agency INEI said in its monthly economic activity report.

INEI said the March figure was a result of eight of the country’s key industrial areas — manufacturing, construction, mining and hydrocarbons, financial and insurance, commerce, telecommunications and transportation sectors — beating March 2020 production levels. The agricultural sector and five others, however, registered declines in production, it added.

The world’s second largest copper producer saw a 15.37 percent expansion in the mining and hydrocarbons sector, due to higher volumes obtained of copper, zinc, molybdenum, silver, iron, gold and tin.

INEI highlighted that productive activity was frozen for 15 days last March because of the pandemic but that the mining industry, which produces 60 percent of Peru’s exports, had been showing “signs of gradual recovery” since the last quarter of 2020, thanks to a national economic reactivation plan which saw the government provide financing to companies to meet COVID-19-related debts.

Peru is at present engulfed in a second wave of the pandemic that is worse than the first, with the latest figures from the Ministry of Health reporting 65,608 deaths and 1.87 million cases of the virus. This time however, Peru has not suspended productive industry.

The country’s economy minister said last month that GDP would grow 10 percent this year, the fastest rate registered since 1994, following a plunge of 11.6 percent in 2020.