Arab nations see 9.8% surge in public expenditure, reaching $957.5bn in 2022: report 

Arab nations see 9.8% surge in public expenditure, reaching $957.5bn in 2022: report 
The 43rd edition of the Arab Monetary Fund’s Joint Arab Economic Report disclosed that combined current expenditures in these nations jumped 9.9 percent to $824.6 billion in 2022, compared to $750.7 billion in 2021. Shutterstock
Short Url
Updated 11 February 2024
Follow

Arab nations see 9.8% surge in public expenditure, reaching $957.5bn in 2022: report 

Arab nations see 9.8% surge in public expenditure, reaching $957.5bn in 2022: report 

RIYADH: Arab countries witnessed a 9.8 percent increase in total public expenditure, reaching $957.5 billion in 2022, compared to $878.9 billion in 2021, according to a recent analysis. 

The 43rd edition of the Arab Monetary Fund’s Joint Arab Economic Report disclosed that combined current expenditures in these nations jumped 9.9 percent to $824.6 billion in 2022, compared to $750.7 billion in 2021. 

The study highlighted a 3.6 percent increase in capital expenses, reaching $132.5 billion. The publication also noted that the public budgets of Arab countries reported a surplus of $119.6 billion in 2022, contrasting with a deficit of $62.5 billion in 2021. 

Meanwhile, the average per capita gross domestic product at current prices also increased by about 22.1 percent, rising from $6,993 in 2021 to $8,563 in 2022.  

In addition, the GDP of Arab nations at constant prices increased by about 6 percent in 2022, following a growth rate of 3.6 percent in 2021. 

The economic performance of Arab countries, which are among the leading exporters of oil and gas, experienced improvement due to the sustained increase in global market prices for these commodities, particularly during the first half of 2022. 

On the other hand, other Arab nations faced challenges as their import bill for oil, gas, and food products increased, constraining their recovery.  

The publication highlighted that financial strain, high public debt, and inflation restricted the region’s ability to implement effective economic policies. 

Despite these challenges, sectoral growth rates for these countries indicated an improvement in the performance of most sectors, particularly in the extractive industries sector, followed by the manufacturing sector. 

The impact of international developments on global prices of energy and food materials has led to varying degrees of recovery. This depends on the structural characteristics of individual economies and the capabilities of their governments to implement expansionary financial policies, the report added. 

The Joint Arab Economic Report is a collaborative effort between the Arab League, the Arab Fund for Economic and Social Development, the Arab Monetary Fund, and the Organization of Arab Petroleum Exporting Countries, known as OAPEC. 


Almoosa Health’s IPO to drive expansion and innovation in Saudi healthcare: CEO 

Almoosa Health’s IPO to drive expansion and innovation in Saudi healthcare: CEO 
Updated 8 min 7 sec ago
Follow

Almoosa Health’s IPO to drive expansion and innovation in Saudi healthcare: CEO 

Almoosa Health’s IPO to drive expansion and innovation in Saudi healthcare: CEO 

RIYADH: Almoosa Health Co.’s upcoming initial public offering is poised to drive significant growth and innovation in Saudi Arabia’s healthcare sector, said the company’s CEO. 

In an interview with Arab News, Malek Almoosa emphasized that the IPO will attract capital for expansion and advanced technologies, enabling the company to strengthen its market position and broaden its services. 

The CEO said Almoosa Health is well-positioned to capitalize on Saudi Arabia’s rapidly evolving health care sector, which is expected to grow at a 6.5 percent compound annual growth rate to reach SR360 billion ($95.83 billion) by 2030. 

“The Kingdom’s health care infrastructure and utilization are still maturing and continue to lag global benchmarks, offering plenty of headroom for growth and investment in the sector,” he said. 

The company plans to issue 13.3 million shares, including 9.3 million new offerings and 4 million existing shares. This will represent 30 percent of the company’s post-IPO capital. 

“Our IPO plays an important role in attracting capital for investment in expansion and cutting-edge technology that will grow our footprint and our offering,” said Almoosa. 

The public listing, a partly primary offering, is relatively rare in the Saudi market. It not only positions the company to reduce its leverage and enhance financial flexibility but also extend its regional reach. 

“With a public listing, we also enhance our market positioning, attracting more business partnerships and broadening our patient demographic, and facilitating geographic expansion in the Eastern Province, where we are the leading health care provider,” he said. 

Almoosa Health has already secured strong investor interest, with cornerstone commitments from Tawuniya and Al Fozan Holding Co., subscribing to 4.1 percent and 2.5 percent, respectively, of the company’s post-offering capital. 

Listing on Tadawul 

The company said its decision to list on Tadawul aligns with its foundation and strategic direction. “We are, through and through, a Saudi organization that has grown with the Kingdom, and we wouldn’t have considered listing on any other financial market,” Almoosa said. 

By becoming part of the region’s largest and most liquid stock exchange, the company aims to enhance its capital-raising capabilities, visibility, and credibility. 

“Our decision to list on the Saudi Exchange reflects our strategic direction to harness local market insights, access a broad investor base, and continue to align with the Kingdom’s Vision 2030 health care objectives,” said Almoosa. 

Malek Almoosa. Supplied

Expanding capacity 

The CEO stated that funds raised would primarily support Almoosa Health’s expansion strategy, adding: “We have a clear growth strategy, planning to add around 700 beds by 2028, resulting in four hospitals with 1,430 beds and five primary care centers.” 

He explained that proceeds from 21 percent of the 30 percent offering would go to the company to finance expansion plans, covering capital expenditures, working capital, general corporate purposes, and partial debt repayment, while the remaining 9 percent would go to the selling shareholder. 

The company plans to open two major hospitals: Almoosa Specialist Hospital in Al Hofuf by 2027, with 300 beds and 200 clinics, and another in Al Khobar by 2028, featuring up to 400 beds and several centers of excellence. 

“We have already acquired the land and commenced excavation work for both,” Almoosa revealed. 

In addition, five primary care centers are planned in Al Ahsa, Al Khobar, and Dammam between 2025 and 2027. 

The CEO noted that this expansion aligns with the company’s vision of becoming a “trusted provider of world-class health care” in Saudi Arabia’s Eastern Province. 

“Our ambitious expansion plan is designed to make that vision a reality, growing our footprint, widening our offering, and investing in the best technology in the market.” 

Eastern Province, where Almoosa operates, is emerging as a hub for energy and petrochemical industries, driving demand for health care services. 

With a capacity of 730 beds and services spanning primary, acute, and rehabilitative care, Almoosa serves nearly 1 million patients annually. The company’s integrated care model includes pharmacy, home health care, and telemedicine.

Almoosa acknowledged challenges in the sector, including talent shortages. “In a region where world-class practitioners are hard to come by, we educate, develop, and retain the most talented professionals,” he said, emphasizing the company’s focus on patient experience and competitive advantage. 

Technology adoption 

Almoosa pointed out that technology is at the core of the company’s strategy to enhance patient care and operational efficiency. 

Its specialist hospital in Al Ahsa integrates advanced health IT systems to enhance patient care and operational efficiency. He revealed that innovations such as Tesla 3 MRI for high-resolution imaging and automated systems in laboratories and pharmacies underscore its commitment to cutting-edge solutions. 

“We’ve been recognized for our advanced use of health IT, with HIMSS Stage 7 Accreditation reflecting exceptionally high levels of technology adoption,” said Almoosa. 

With its IPO, Almoosa Health aims to play a pivotal role in shaping the healthcare landscape of Eastern Province and beyond, meeting the growing demand for high-quality, integrated services.


Moody’s upgrades rankings for 11 Saudi banks

Moody’s upgrades rankings for 11 Saudi banks
Updated 29 November 2024
Follow

Moody’s upgrades rankings for 11 Saudi banks

Moody’s upgrades rankings for 11 Saudi banks

RIYADH: Eleven banks in Saudi Arabia have seen their long-term deposit and senior unsecured ratings upgraded by Moody’s thanks to a strong operating environment.

The ratings agency also attributed the decision – which affects institutions including Saudi National Bank, Al Rajhi Bank, Riyad Bank – to the higher capacity of the Kingdom’s government to support the banks in case of need.

Earlier in November, Moody’s changed the issuer rating of the Saudi government from Aa3 from A1 and its outlook to stable from positive.

Other banks to be affected by the latest change include Saudi Awwal Bank, Banque Saudi Fransi, and Alinma Bank, as well as Arab National Bank, Bank AlBilad, and the Saudi Investment Bank.

Bank AlJazira and Gulf International Bank — Saudi Arabia also saw changes.

The agency also changed the outlook to stable from positive on the long-term deposit ratings of all the banks except for Al Rajhi Bank, which already held that rating.

“Credit conditions for banks in Saudi Arabia are improving as economic diversification momentum remains robust,” said Moody’s in a press release, adding: “We expect non-hydrocarbon private sector GDP to continue expanding by about 4-5 percent in the coming years – among the highest in the Gulf Cooperation Council region and an indication of continued progress in diversification that will reduce the Kingdom’s exposure to oil market developments and long-term carbon transition over time.”

The agency also announced it had upgraded the Baseline Credit Assessments of Saudi National Bank, Saudi Awwal Bank, and Gulf International Bank — Saudi Arabia, and affirmed the BCAs of the remaining eight banks.

The continued increase in employment in the Kingdom, including the growing participation of women in the workforce, will support demand for banking services, according to Moody’s.

“In this context, we expect credit growth in the banking system to remain robust, particularly to high quality borrowers related to the execution of the giga-projects, which will in turn support asset quality and profitability for all banks across the system, albeit to varying degrees,” said the report.

When it came to the likelihood of government support, Moody’s changed its assessment to “very high” from “high” for Alinma Bank, Bank AlBilad, the Saudi Investment Bank and Bank AlJazira.

The report said this shift “reflects the vital role the banking system plays in supporting the diversification agenda.”

It added: “The government’s economic diversification plan continues to progress and will, over time, further reduce Saudi Arabia’s exposure to oil market developments. Additionally, the stability and resiliency of the banking system support investor confidence, private domestic or foreign investment which is critical to government’s diversification plan and in our view increases the likelihood for government support in case needed.”

In its analysis of Saudi National Bank – the largest such institution across the GCC region – Moody’s said its balance sheet is well diversified across retail, corporate and treasury and underpins its strong and improving asset quality with nonperforming loans to gross loans at 1.6 percent as of September.

“The bank’s liquid buffers remain healthy and sufficient to moderate concentration risk on government deposits which is a common feature for all banks in Saudi,” the report added.

Regarding the decision to affirm Al Rajhi Bank’s BCA at a3, Moody’s said this “reflects the bank’s dominant domestic Islamic retail franchise and our expectation that the improved operating conditions will support in maintaining the bank’s financial performance.”


Oil Updates – prices set to end week over 3% lower as supply risks ease

Oil Updates – prices set to end week over 3% lower as supply risks ease
Updated 51 min 40 sec ago
Follow

Oil Updates – prices set to end week over 3% lower as supply risks ease

Oil Updates – prices set to end week over 3% lower as supply risks ease

LONDON: Oil prices fell on Friday, heading for a weekly drop of more than 3 percent, as concerns over supply risks from the Israel-Hezbollah conflict eased, alleviating earlier disruption fears.

Brent crude futures fell 55 cents, or 0.8 percent, to $72.73 a barrel by 10:58 a.m. Saudi time. US West Texas Intermediate crude futures were at $69.52, down 20 cents, or 0.3 percent, compared with Wednesday’s closing price.

On a weekly basis, Brent futures were down 3.3 percent and the US WTI benchmark was trading 3.8 percent lower.

Israel and Lebanese armed group Hezbollah traded accusations on Thursday over alleged violations of their ceasefire that came into effect the day before. The deal had at first appeared to alleviate the potential for supply disruption from a broader conflict that had led to a risk premium for oil.

Oil supplies from the Middle East, though, have been largely unaffected during Israel’s parallel conflicts with Hezbollah in Lebanon and Hamas in Gaza.

OPEC+, the Organization of the Petroleum Exporting Countries and allies including Russia, delayed its next policy meeting to Dec. 5 from Dec. 1 to avoid a scheduling conflict. OPEC+ is expected to further extend its production cuts at the meeting.

BMI, a unit of Fitch Solutions, downgraded its Brent price forecast on Friday to $76/bbl in 2025 from $78/bbl previously, citing a “bearish fundamental outlook, ongoing weakness in oil market sentiment and the downside pressure on prices we expect to accrue under Trump.”

“Although we expect the OPEC+ group will opt to roll-over the existing cuts into the new year, this will not be sufficient to fully erase the production glut we forecast for next year,” BMI analysts said in a note.

Also on Thursday, Russia struck Ukrainian energy facilities for the second time this month. ANZ analysts said the attack risked retaliation that could affect Russian oil supply.

Iran told a UN nuclear watchdog it would install more than 6,000 additional uranium-enriching centrifuges at its enrichment plants, a confidential report by the watchdog said on Thursday.

Analysts at Goldman Sachs have said Iranian supply could drop by as much as 1 million barrels per day in the first half of next year if Western powers tighten sanctions enforcement on its crude oil output.


Closing Bell: Saudi main index rises to close at 11,641 

Closing Bell: Saudi main index rises to close at 11,641 
Updated 28 November 2024
Follow

Closing Bell: Saudi main index rises to close at 11,641 

Closing Bell: Saudi main index rises to close at 11,641 

RIYADH: Saudi Arabia’s Tadawul All Share Index gained 50.52 points, or 0.44 percent, closing at 11,641.31 on Thursday. 

The total trading turnover of the benchmark index was SR6.02 billion ($1.60 billion), with 134 stocks advancing and 85 retreating.  

Similarly, the Kingdom’s parallel market Nomu rose 229.98 points, or 0.76 percent, to close at 30,394.70. Of the listed stocks, 44 advanced while 38 retreated. 

The MSCI Tadawul Index increased by 8.37 points, or 0.58 percent, to close at 1,460.35.  

The best-performing stock of the day was Tamkeen Human Resource Co., whose share price surged 18.00 percent to SR76.70. 

Other top performers included Zamil Industrial Investment Co., whose share price rose 8.70 percent to SR29.35, and Dr. Soliman Abdel Kader Fakeeh Hospital Co., whose stock price increased 5.66 percent to SR63.50.  

Saudi Cable Co. recorded the biggest drop, falling 6.93 percent to SR84.60. 

Saudi Enaya Cooperative Insurance Co. also saw its share price fall 4.25 percent to SR13.08. 

Meanwhile, Saudi Automotive Services Co. saw its stock price drop 4.23 percent to SR68.00. 

On the announcements front, Saudi Telecom Co. revealed that it had received foreign investment authorization from the Spanish Council of Ministers, allowing it to increase its voting rights from 4.97 percent to 9.97 percent and gain the right to appoint a board member at Telefonica. 

According to a Tadawul statement, the change in stc ownership from 9.9 percent in the previous announcement to 9.97 percent reflects Telefonica’s cancellation of shares in April. stc is currently completing the necessary steps to finalize the increase in its voting rights, which is expected to be completed in the coming period. 

stc ended the session at SR39.95, with no change in its share price.  

Nofoth Food Products Co. announced the acquisition of a mixed-use commercial and residential land in Riyadh’s Hittin neighborhood for SR22 million, covering 1,580.37 sq. meters. This acquisition is part of the company’s strategic plan to expand operations with new commercial offices and develop its headquarters. 

According to a bourse filing, the deal will be financed through the company’s internal resources. The land acquisition will increase the firm’s fixed assets and positively impact financial ratios such as return on assets.  

Nofoth Food Products Co. ended the session at SR18.00, down 1.69 percent.  


Saudi Arabia’s 2025 education plan boosts Chinese learning, nurtures gifted talent

Saudi Arabia’s 2025 education plan boosts Chinese learning, nurtures gifted talent
Updated 28 November 2024
Follow

Saudi Arabia’s 2025 education plan boosts Chinese learning, nurtures gifted talent

Saudi Arabia’s 2025 education plan boosts Chinese learning, nurtures gifted talent

RIYADH: Around 102,000 students in Saudi Arabia will learn Chinese annually in public schools, while three new institutions for the gifted will open as part of the Kingdom’s 2025 education plans. 

According to the Ministry of Finance’s budget report, the education sector has been allocated SR201 billion ($53.50 billion), representing 16 percent of the government’s expenditures for the coming year. 

According to Mansoor Ahmed, an independent adviser in various sectors including education: “Saudi Arabia’s higher education sector is the largest individual education market across the Arabian Gulf region with a staggering 2 million students enrolled in 2022.”

He said: “Notably, 95 percent of these students are enrolled in public and semi-public institutions, underlining a significant reliance on the public sector for higher education. This reliance is attributed to the perception of higher quality and job prospects offered by public institutions.”

According to Ahmed, the government’s funding allocation for this sector is expected to shift higher education demand towards fields like AI, robotics, and renewable energy, while focusing more on R&D to address skills gaps and align education with job market needs.

This funding aims to promote comprehensive education, enhance learning within families and communities, and equip individuals with the skills necessary for national development and workforce readiness. 

It was announced in September that Saudi Arabia had begun teaching the Chinese language to primary and middle school students to equip learners with valuable skills and promote cultural appreciation. 

Pupils are now learning Mandarin, with 175 educators teaching the language as part of an agreement between the Kingdom and China. The program aims to improve job prospects and academic opportunities, particularly for those interested in studying at Chinese universities.

The initiative aligns with Saudi Vision 2030 and China’s growing global influence, further strengthening the trade and cultural ties between the two nations, according to the Ministry of Education. 

The program started with pilot schools and will gradually expand to include high school students by 2029. Educators from both nations view the initiative as a “win-win,” promoting cultural exchange and enhancing communication between the two countries.

Key projects for Saudi Arabia’s education sector in 2025, as mentioned in the Kingdom’s budget for the coming fiscal year, include increasing kindergarten enrollment to 40 percent to help achieve the Vision 2030 target of 90 percent while addressing the need for specialized teaching staff. 

There are also plans to expand enrollment for students with disabilities and build sports halls for girls in public schools. 

According to Ahmed: “In Saudi Arabia, approximately 293,000 children are identified with various disabilities. The National Transformation Program 2020 aims to ensure that 200,000 children with disabilities aged 6-18 would benefit from specialized education programs and support services.”

Ahmed noted that under the Rights of Students with Disabilities and Equal Participation in Education or RSEPI, all children with disabilities in Saudi Arabia are guaranteed free and appropriate education, encompassing individual education plans, early intervention programs, and transition services.

He also highlighted the increasing private sector interest in this area, exemplified by Amanat’s acquisition of a 60 percent stake in the Human Development Co. for SR220.3 million. 

The company is a major provider of special education and care services in the Kingdom, operating nine schools, 22 daycare centers, and rehabilitation clinics across six provinces.

The Kingdom aims to raise the percentage of accredited training institutions to 39 percent while establishing three new academic facilities dedicated to nurturing gifted students in areas such as sports and technology, with one school set to open in Riyadh. 

Saudi Arabia’s focus on education and the significant investment in this sector reflects its commitment to diversifying its economy and empowering its youth to contribute to the Kingdom’s future growth. 

This emphasis on education is driven by the country’s long-term Vision 2030 goals, which seek to transition away from oil dependency and create a knowledge-based economy. 

Saudi Arabia has recognized that education plays a central role in shaping the future of its citizens, particularly the younger generation. This has led to a series of reforms aimed at improving the quality of schooling, increasing access to education, and fostering specialized skills. 

As the Kingdom seeks to boost industries beyond oil, there is a clear need for a skilled workforce in technology, renewable energy, healthcare, and entertainment sectors. 

The Saudi government has also been encouraging international collaboration in the education sector to enhance its global competitiveness. For example, opening branches of prestigious universities, such as Arizona State University, is part of a larger strategy to elevate the country’s standing in the global education rankings. 

This is intended to provide students with access to world-class education and attract international talent to the Kingdom.

Main 2024 achievements for education sector 

The Ministry of Finance’s budget report shows that the significant investment in the Kingdom’s education sector has played a key role in the sector’s notable achievements. 

For instance, three Saudi universities have now ranked among the top 200 globally, with King Saud University advancing into the top 100 in the prestigious Shanghai rankings.

In addition, the percentage of higher education graduates entering the workforce within six months of graduation has increased to 43 percent, a jump from 32 percent in 2023, highlighting the country’s efforts to improve job readiness among graduates. 

Saudi Arabia is also enhancing its educational institutions’ credibility, with four training facilities receiving institutional accreditation to support the Human Capability Development Program and raise the overall national education standard. 

On the infrastructure front, three Saudi cities—Madinah, Al-Ahsa, and King Abdullah City in Thuwal—have been included in UNESCO’s Network of Learning Cities. 

These cities aim to foster a more holistic and inclusive learning environment, offering educational opportunities for all ages and helping to equip citizens with the necessary skills for national development and workforce participation. 

Furthermore, Saudi Arabia is expanding its research and development capabilities with the establishment of 40 centers dedicated to innovation, technology, and creativity. 

These centers will promote research and entrepreneurship, fueling the growth of new ideas and inventions. In 2024, the Kingdom saw a 10 percent increase in the enrollment of gifted students, with 28,264 scholars now participating in the National Program for Gifted Identification. 

Additionally, the country achieved six international awards in areas such as technical activity, innovation, and education. 

In terms of physical infrastructure, Saudi Arabia is investing heavily in the construction of new educational facilities. A public-private partnership initiative is developing 30 schools in Madinah to create modern and efficient educational facilities. 

In November, PwC Middle East announced the acquisition of Emkan Education, a Saudi consultancy specializing in education and skills development advisory services. The partnership is seen as a significant step toward building a future-ready education system in the Kingdom. 

The acquisition adds Emkan’s experienced professionals, including three prominent Saudi female education leaders, to PwC’s Middle East schooling practice. 

This integration will strengthen PwC’s regional capabilities and support Saudi Arabia’s goal of fostering innovation, empowering citizens, and driving economic transformation.