The Ministry of Finance unveiled the 2024 budget, projecting total expenditures of SR1.251 billion ($333.6 billion) and total revenues of SR1.172 billion. The estimated deficit of SR79 billion, representing 1.9 percent of the gross domestic product, reaffirms the government’s commitment to funding programs aligned with Saudi Vision 2030 while maintaining fiscal sustainability targets in the medium and long term.
During the budget briefing, Minister of Finance Mohammed Al-Jadaan highlighted the positive outcomes of economic and structural reforms, showcasing improved fiscal and monetary indicators, economic diversification, and fiscal stability. Acknowledging the Kingdom’s resilience, he emphasized the government’s adept handling of geopolitical challenges, contributing to both economic and societal stability.
One of the budget pillars is logistics and transportation infrastructure.
The country is on the right track regarding the national transport and logistics services strategy, launched two years ago, according to global indicators that showed the Kingdom’s progress in logistics, air connectivity, and other areas. In 2023, the government added 27 new shipping lines, leading to a faster arrival of goods, higher revenues, and improved shipping rates, Minister of Transport and Logistics Saleh Al-Jasser highlighted during the 2024 Budget Forum.
The Kingdom aims to complete vital projects in all modes of transportation to achieve its goals. Moreover, the ports on the West and East coasts are witnessing significant shifts, with almost 90 percent of trade (imports and exports) in the Kingdom taking place through these ports.
Furthermore, there are eight new logistics zones in Jeddah port with investments from major global shipping lines, operators of container terminals, and major international companies specializing in logistics services.
Of these, three zones are open, and five are under construction. It is worth noting that the transport sector is allocated the smallest part of the budget spending. Meanwhile, the minister said the largest part of the sector’s spending comes from the Public Investment Fund, an essential partner of the transportation system in its investments, noting that the private sector is still considered the most significant investor.
Over the past few years, local and regional companies have recognized the growing importance of the logistics sector in the Kingdom as a global logistics hub. They have implemented strategies focusing on cargo handling capabilities, emerging logistics solutions, passenger ground services, and technology-enabled applications. Some of these companies have listed their shares on the stock markets, while others are still private with a 10,000 percent growth rate in their business, benefiting from a $20 billion market.
I have covered the logistics sector several times in the past as I consider it the backbone of any economy, and more so the Saudi one, especially with its unmatched ambitious plans among the G20 economies, making this sector the pillar of the country’s budget for 2024.
- Basil M.K. Al-Ghalayini is chairman and CEO of BMG Financial Group.