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Saudi Round Up: Health Insurance, E-commerce, and Tourism Leading Private Sector Toward Vision 2030

Weekly Roundups

9 Jan 2024

AstroLabs Team

Our Saudi Round-Up series looks at the top business news and deals throughout KSA to give you visibility on significant moves and developments throughout the region.

From the 2nd of January to the 8th of January

Our Saudi Round-Up series looks at the top business news and deals throughout KSA to give you visibility on significant moves and developments throughout the region. This week’s roundup underscores the resilience of the Saudi economy and some of the reasons for its thriving ecosystem, with an eye on the health insurance sector, manufacturing and industry, and tourism.

General Business and Economy

Saudi PIF’s $31.6 Billion Tops Global Sovereign Fund Ranking

The Saudi Arabian Public Investment Fund deployed $31.6 billion through 49 deals in 2023. This 33 percent growth in investments year-on-year establishes the Saudi PIF as the top state-owned financing vehicle, ranked by worldwide sovereign wealth fund tracker Global SWF.

The PIF has actively engaged in numerous deals, partnerships, and initiatives, driving the Kingdom’s economic diversification in line with Vision 2030. The report predicts that the PIF will be among the top three wealth sovereign funds worldwide by 2030 with $2 trillion in assets.

More Than 200 Firms Headquartering in Saudi Arabia Can Now Bid for Government Contracts

The 200+ international firms that opened regional headquarters in Saudi Arabia by the close of 2023 are now eligible for government contracts. Notable businesses that relocated their headquarters to Saudi Arabia include PepsiCo, Bechtel, Northern Trust, IHG Hotels and Resorts, Deloitte, and PwC,

These firms will receive financial incentives for headquartering in the Kingdom, including a 30-year exemption from corporate income tax. Additional benefits are available for compliance with Saudization requirements.

Rapid Growth in Non-Oil Sector Tops G20 in December 2023

According to the Riyad Bank Saudi Arabia Purchasing Managers’ Index, the Kingdom’s non-oil sector grew at its most rapid rate since July 2023. Saudi Arabia also outperformed its G20 peers in December, reaching an impressive 57.5 on the PMI.

This dramatic growth corresponds to the steep increase in business activity and exports, underscoring the Kingdom’s continued economic diversification and the resilience of its non-oil economy.

24% Increase in E-commerce Firms in the Kingdom

The Kingdom’s Ministry of Commerce has reported a 24 percent rise in e-commerce in Q4 2023 compared to Q4 in 2022. Riyadh was the epicentre of registrations with 15,074 of the total 37,481 registrations in the final quarter of 2023.

The UN Conference on Trade and Development ranked the Kingdom 8th out of 152 developing economies in ecommerce. Playing a pivotal role in economic diversification and bolstering the national economy, total revenue from ecommerce is estimated to reach $69.33 billion by 2025.

An increase in venture investment in online startups reached an estimated $119 million in 2022, contributing to the thriving digital ecosystem, as has Saudi’s booming FinTech sector, which more than doubled in 2023 compared to the end of 2022.

23% Increase in Saudi Q4 Commercial Registrations

The Kingdom’s commercial registrations increased 23 percent in Q4 2023 compared to the same period the previous year. The Ministry of Commerce reported that 95,863 businesses were certified between October and December.

This growth highlights Saudi’s commitment to economic diversification to boost the private sector and attract foreign investment in line with Vision 2030 objectives.

Private Sector Created 2.3 Million Saudi Jobs in December 2023

According to a report from the National Labor Observatory, 2.3 million Saudi nationals joined the private sector in December 2023 in addition to 8.6 million non-Saudis joining the private sector workforce during this period.

The Kingdom’s private sector continues to expand through incentives, rewards, and opportunities, such as NEOM’s need for talent in the construction sector. These combined activities and initiatives are transforming Saudi into a hub for employment and continue to attract investment throughout the sector.


Health Insurance Sector Set To Create 25 Million Beneficiaries by 2030

KSA’s health insurance industry has grown significantly, largely due to the obligation for private sector employees and their dependents to have medical coverage. Beneficiaries surged 18 percent to 11.5 million by the end of 2022.

Health insurance is predicted to contribute $16.47 billion to Saudi’s GDP by the end of the decade, which would be around 2 percent of total GDP, making it a major player in the achievement of Saudi’s objectives for Vision 2030.

Manufacturing and Industry

Increase in the Kingdom’s Issuance of Industrial Licenses

In October 2023, KSA’s Ministry of Industry and Mineral Resources increased its issuance of licenses by 97.4 percent compared to the same month the previous year. It issued 158 industrial licenses, led by the food manufacturing sector and the non-metallic minerals industry.

In November 2023, the Ministry issued 130 industrial licenses, compared to 82 in the corresponding period a year earlier. Food manufacturing received the most permits across sectors, followed by nonferrous metal manufacturing,

The Ministry issued 1,157 licenses in total in 2023, mostly to national factories, of which there are now 11,469, with an investment of $410.2 billion. This growth of the industrial sector is critical to Saudi’s shift away from reliance on oil toward bolstering the non-oil economy.


Riyadh Season Attraction Beats 12 Million Visitors Target Early

Saudi Arabia’s Riyadh Season attraction beat its objective of 12 million visitors while only halfway through the event.

The top annual tourist attraction has helped position the Kingdom as a prime destination for unique and diverse global entertainment.

Saudi Arabia Becoming Top Winter Destination

The Saudi Tourism Authority is set to make the Kingdom one of the world’s most popular winter destinations through 17,000 events, KSA is attracting visitors worldwide in search of unique and diverse activities.

The tourism sector, which aims for 150 million visits by 2030, is vital to Saudi Arabia’s strategy for economic diversification and supporting the private sector.

Saudi Minister Emphasizes Expo 2030’s Potential for Growth

The Kingdom’s commitment to Expo 2030 aligns with KSA positioning itself as a global leader in sustainability, climate action, the digital future, and personal empowerment. It will serve to further drive the country’s growth and prosperity, alongside ongoing initiatives, deals, partnerships, and investments.

The Kingdom’s leaders are committed to an ecosystem-based approach that will help the economy flourish and will serve as a model for nations around the world.


SAMA Issues Guidelines for BNPL

​​The Saudi Central Bank (SAMA) recently introduced comprehensive guidelines shaping the Buy Now, Pay Later (BNPL) sector in Saudi Arabia's financial technology landscape. Released in December, these directives establish stringent regulations governing licensing, operations, and minimum capital for BNPL entities. SAMA's strategic move aims to foster sector growth while ensuring consumer rights and financial model sustainability.

These guidelines encompass crucial aspects, including a minimum capital threshold of SR5 million ($1.3 million), robust information security standards, and measures to combat financial crimes. Additionally, SAMA mandates at least 50% Saudi nationals in the initial workforce across all organizational levels. Aligned with Vision 2030 and the National Fintech Strategy, these regulations aim to foster 525 BNPL companies, generating economic contributions and job opportunities.

While official figures underscore the success stories of 2023, the Kingdom looks forward to continued growth, innovation, and prosperity through its dynamic spirit, leadership, and willingness to embrace transformation for the global good.

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