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Saudi Round-Up: Breaking Records in Finance, Entrepreneurship, and Tourism

Weekly Roundups

2 Apr 2024

AstroLabs Team

In this week's round-up, we look at the latest developments in the automotive, real estate, sustainability, and tourism sectors, in addition to news about general businesses and the economy.

From March 26 to April 1, 2024

General Business and Economy

Saudi Arabia Ranks 3rd Best Global Entrepreneurial Ecosystem

In the highly regarded Global Entrepreneurship Monitor report for 2023-2024, Saudi Arabia ranked as the third-best entrepreneurial ecosystem globally, with its National Entrepreneurship Context Index score rising from 5.0 in 2019 to 6.3 in both 2022 and 2023.

The report highlighted the Kingdom's efforts in economic diversification and fostering a supportive climate for startups as the biggest factors impacting this achievement. Notably, the report praised the increase in female entrepreneurship, as well as the high entrepreneurial confidence among citizens.

Foreign Direct Investment Inflows to the Kingdom Reach $5.17 Billion in Q4 2023

In the fourth quarter of 2023, Saudi Arabia witnessed a 17% increase in foreign direct investment (FDI) inflows, which reached $5.17 billion.

According to the General Authority of Statistics, this rise is attributed to enhanced transparency and updated governance standards in FDI calculations. It also reflects the Kingdom’s concerted efforts to attract global investment through initiatives like the National Investment Strategy and attractive fiscal incentives, crucial for achieving the ambitious goals of Vision 2030.

Saudi Private Equity Market Sees $4 Billion in Transactions in 2023

In 2023, Saudi Arabia's private equity sector witnessed a remarkable jump, with transactions reaching $4 billion. Reports by MAGNiTT and Saudi Venture Capital Co reveal a significant upturn in the sector's performance over the past five years, with exponential growth observed since 2020.

The private equity market, known for its long-term, high-risk investment strategies in mature companies, has demonstrated its robustness and potential for strategic business improvements and operational efficiencies.

More Than 1 Million Hires Joined Saudi Private Sector in 2023

Enjoying an 11.5% growth in its labor market compared to the previous year, Saudi Arabia's private sector welcomed over 1 million new employees in 2023.

The National Labor Observatory emphasized that women represent 37% of these new hires, a 2% increase from 2022. In addition, the construction, transportation, and storage sectors were the main drivers behind this increase, as together they attracted over 719,300 workers.

Saudi Business Registrations Increased by 12% to 1.12 Million

This week, the Ministry of Commerce revealed that Saudi Arabia has witnessed a 12% increase in business registrations, reaching over 1.12 million commercial records by 2023. Registrations of limited-liability companies jumped by 40% to 229,000, and joint-stock companies by 15%, reaching 2,756.

During the meeting in Jeddah, the Minister of Commerce discussed the efforts to improve the enterprise environment within the Kingdom in more detail. Jeddah itself saw a 14% increase in commercial records, totaling over 192,000, making the city second only to Riyadh in terms of company registrations.


Ministry of Finance Launches Green Finance Framework

The Ministry of Finance in Saudi Arabia has launched the Green Finance Framework—a big step towards improving public and private climate financing. Highlighting the scope of this initiative, the framework will support “more than 80 public and private sector projects that are part of the Saudi Green Initiative.”

The initiative aims to drive the Kingdom closer to its ambitious sustainability targets, including the goal to achieve net-zero emissions by 2060. The Green Finance Framework is set to accelerate emission reduction efforts through a circular carbon economy approach.


Kingdom Records Highest Ever Inbound Tourism Spending at $35.95 Billion in 2023

In a historic achievement, Saudi Arabia recorded its highest-ever spending by inbound visitors in 2023. Saudi Central Bank (SAMA) reported that spending figures reached $35.95 billion, a 42.8% increase from 2022.

Notably, Saudi Arabia led the United Nations Tourism rankings for growth in international tourist arrivals in 2023 compared to 2019, with a 56% increase in tourists. In addition, the Kingdom showcased a tourism recovery rate of 156% in tourist numbers in 2023 versus 2019, according to the World Tourism Barometer.


PIF to Invest $1 Billion in Lucid

Lucid Motors, a leader in electric vehicle technology, announced it will receive a $1 billion investment from Saudi Arabia’s Public Investment Fund (PIF). Following this announcement, the company experienced an 18% spike in its shares.

The funding comes through Ayar Third Investment Co. and will be made in convertible preferred stock, potentially converting into approximately 280 million shares. Saudi Arabia’s government holds a 60% stake in Lucid and has invested billions as part of its diversification strategy.

Real Estate

NEOM CEO Makes Top 3 in Forbes Real Estate Leaders List

Nadhmi Al-Nasr, CEO of the Saudi mega-project NEOM, has secured the third spot in Forbes Middle East's "Most Impactful Real Estate Leaders" list. Positioned just behind two prominent figures from the UAE, Al-Nasr's ranking underlines Saudi Arabia’s influence in the real estate sector.

In total, the list featured 23 Saudis, making the Kingdom a dominant player in the market. Forbes' statement acknowledges the vital role of governmental and corporate projects in Saudi Arabia, Egypt, and the UAE in propelling the construction industry's growth.


Mada Cards Help Saudi E-Commerce Surge to $3.76 Billion in February

Saudi Arabia's e-commerce sales hit $3.76 billion in February, a 25% increase from the previous year. The statistics include online shopping, in-app purchases, and e-wallets with Mada cards, excluding transactions by Visa, MasterCard, and other credit cards.

These numbers show that Mada, the national card payment scheme, is instrumental in boosting digital payments for e-commerce. With a 44% yearly growth, the sector reached over 84 million in February alone. Factors such as post-COVID-19 consumer behavior shifts, better internet infrastructure, and regulatory reforms have contributed to this growth. Experts predict that the Kingdom's e-commerce user base will expand by 42% to $33.6 million this year.

This week's Saudi Round-Up illustrates some of the outcomes of Saudi Arabia’s continuous efforts to diversify its economy, from pioneering advancements in the entrepreneurial ecosystem and green finance to setting new records in private equity transactions and inbound tourism spending. Stay tuned for more updates on how the Kingdom continues to uphold its vision, propelling growth and sustainability.

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