Saudi’s Public Investment Fund boosts the local economy and attracts new investments
The Public Investment Fund (PIF) has become a major engine in achieving Saudi Arabia’s Vision 2030 and is a catalyst for diversifying the local economy’s resources away from oil.
Yasir bin Othman Al-Rumayyan, Governor of PIF made a presentation recently on the size of the remarkable growth and development of PIF.
This came during the periodic government communication press briefing held by PIF Governor, after the Board of Directors of the PIF approved, under the Chairmanship of His Royal Highness Prince Mohammed bin Salman bin Abdulaziz, Crown Prince, Deputy Prime Minister and Chairman of the Council of Economic Affairs and Development, the Fund’s five-year strategy.
Yasir discussed the most prominent achievements of PIF during the past four years, the importance of the impact on the local economy, the features of the Fund’s strategy for the next five years 2021-2025 and the future goals of the fund.
He pointed out that the Fund has witnessed an important shift in its development process to activate its strategic role in diversifying sources of income and non-oil revenues. The Fund has been able, during the past four years, to realize achievements in terms of its domestic and global investments, and today it has become a main pillar in achieving financial and developmental sustainability of the Saudi economy.
Yasir indicated that the Fund’s efforts are not limited to developing the Kingdom’s wealth by investing in financially viable projects only, but also to new sectors through which the Fund aims to enhance the growth of promising sectors and achieve a sustainable economic and development impact. He stated that the Fund has made great achievements during the period between 2018 and 2020.
It contributed to achieving a clear impact at the local and global levels, such as raising the volume of assets by the end of 2020 to nearly SAR1.5 trillion and achieving a significant increase in the total shareholder return, which doubled from about 3% in the period between 2014 and 2016 to about 8% in the period between 2018 and 2019.
On the most prominent targets of the new strategy, Yasir said that the Fund aspires to achieve its goals by the end of 2025 that support the achievement of the Kingdom’s ambitions to diversify the economy and develop new sectors.
This include raising the value of its assets under management to SAR4 trillion, SAR1 trillion cumulative investment in new projects locally and raising the percentage of investments in new sectors of the fund’s assets from 15% in 2020 to 21% in 2021.
These targets will help the fund’s contribution to non-oil GDP by SAR1.2 trillion cumulatively, creating 1.8 million jobs, in addition to contributing to local content to reach 60% of the Fund and its subsidiaries.
On the local priority sectors, Yasir said that during the next five years the Fund aims to focus on 13 vital sectors such as food, agriculture, aviation, defence, entertainment, tourism, sports, minerals, mining, transportation, logistics, financial services, and others.
He indicated that the selection of these sectors was evaluated based on the local and global perspective in terms of analysing the attractiveness of the market, its size, expected growth and available opportunities, evaluating the sectors in which the Kingdom has a potential for development and a competitive advantage at the regional and global level, its impact on the economy, and prioritising the sectors according to the Kingdom’s Vision 2030 and its realization programmes.
Yasir pointed out that there are three main pillars developed by the fund, namely, an investment pillar aimed at launching and developing local sectors, developing local real estate projects, developing major projects, developing, and diversifying the assets of the Public Investment Fund.
The second pillar is value-realization that supports national development and enables the Kingdom’s Vision 2030, developing aspects of cooperation between investment portfolios, and diversifying sources of financing and strengthening the financial position of the fund. The third is an institutional pillar to strengthen the institutional system of the Public Investment Fund.