In 2016, Saudi Arabia launched Vision 2030 wherein one of the initiative’s goals was to increase annual foreign direct investment (FDI) to 19 billion USD by 2020. Due to several challenges, most notably the COVID-19 pandemic, FDI for 2020 registered at only 5.5 billion USD. Hoping to eventually boost the investment market in Saudi Arabia, both inward and outward, involved stakeholders are exploring intriguing opportunities across a variety of industries.
As part of the goals outlined in Vision 2030, Saudi Arabia’s Ministry of Communication and Information Technology (MCIT) announced that it had launched several investments worth 6.4 billion USD on future technologies, especially in regard to diversifying the country’s traditionally oil-reliant economy. These investments will explore areas such as green technology, digitalization, smart hubs, 4IR, etc.
Saudi Arabia’s sovereign wealth fund – the Public Investment Fund (PIF) – also has an important part to play in the country’s investment success. Given that it is also tasked with recalibrating the oil-dependent economy, the PIF has made several investments in green technology.
Most notably, the PIF in collaboration with other international investors is planning to build a Saudi Arabian city called Neom, a yet-to-be-built city that will fully rely on renewable power. As per Bloomberg, early estimates indicate that Neom costs approximately 500 billion USD.
Despite not managing to meet its investment goals in recent years, Saudi Arabia’s situation is still promising as other sectors have managed significant growth.
Specifically, start-ups within the country have recorded all-time highs as they grew by 770% in 2021 with investments totaling 548 million USD as per data from Arab News. The number of start-up investors also grew by 192% within the same period.
The growth achieved by start-ups may eventually translate to larger investment opportunities, both for foreign and domestic players. Beyond this, considering that Saudi Arabia is proactively exploring opportunities like green technology and renewable energy, this could also expand the profit pools from which investment could be sourced.