Riyadh – Mubasher: The Saudi government’s National Transformation Programme (NTP), which entails a stake sale in the country’s oil giant Saudi Aramco, is on track, Reuters reported, citing statements by the Saudi government.
The Kingdom’s assurances came after the emergence of reports that a section of the NTP was under revision, prompting speculation by foreign analysts that the Kingdom’s reforms, including the Aramco initial public offering (IPO), may be delayed.
The NTP, launched as part of Saudi Arabia’s Vision 2030 entails a 5% stake sale of Saudi Aramco slated for 2018.
Another reason for the speculation is that the Vision 2030, which promised to reduce the Saudi economy’s reliance on oil exports and revenues, has not done much in this domain.
Instead the Saudi government has “begun to shrink a big state budget deficit with painful austerity steps, but has not yet created major new sources of non-oil growth or jobs,” Reuters said.
Officials recently said that Aramco’s IPO was set to be completed by the end of 2018 and would raise around $100 billion through the sale of 5% of shares. Proceeds from the sale would be used in reinvestments in non-oil industries, they added.
The Saudi information ministry said in a statement released Saturday that the government was committed to the reforms and “was merely streamlining the NTP to make it easier to carry out,” the news agency added.
“The government privatisation programme continues to gain traction and the plan for an [IPO] of a stake in Saudi Aramco remains on track,” the ministry added.
The ministry further revealed that the government had allocated SAR 200 billion ($53 billion) to support private investment, but did not mention how or when this money would be spent.
“The allocation includes an SAR 15 billion boost to the capital of the Saudi Industrial Development Fund (SIDF), which lends to strategic projects, and SAR 37.5 billion for a Saudi-Chinese investment fund focusing on infrastructure. State support for smaller firms will rise,” Reuters said, citing the Saudi ministry as saying.
Originally including hundreds of steps, the Saudi NTP “is being simplified to 36 objectives,” Reuters reported, indicating that 10 ministries are now in charge in the revised plan, down from 18.
