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WORLD NEWSWednesday 27 January 2016
A man works on construction of the Kingdom Tower, a planned 252-story building, which aims to
become the world’s tallest skyscraper when complete, in Jiddah, Saudi Arabia. Saudi Arabia is
racing to attract more investment and overhaul its economy as low oil prices expose it to urgent
domestic challenges.
In overhaul:
Saudi races to attract investment, create jobs
AYA BATRAWY
Associated Press
RIYADH, Saudi Arabia (AP)
— Saudi Arabia is racing
to attract more investment
and overhaul its economy
as low oil prices expose it
to urgent domestic chal-
lenges.
For months, Saudi Arabia’s
Deputy Crown Prince Mo-
hammed bin Salman has
been working with teams
of international consul-
tants, regulators, advisers
and government agen-
cies to launch a “National
Transformation Program,”
or NTP, to help the kingdom
better withstand plunging
revenues.
When King Salman ascend-
ed to the throne a year
ago, he thrust his 30-year-
old son to the forefront of
Saudi decision-making, not
only as second-in-line to
the throne, but also as de-
fense minister and head of
a newly-formed committee
to oversee economic poli-
cy-making.
The Council on Economic
and Development Affairs is
still working on the NTP and SAGIA wrapped up an an-
only vague outlines have
been released. Among its
key priorities is job creation
and increasing foreign in-
vestment in sectors such as
transportation, health care
and mining, where poten-
tially tens of billions of dol- zens under the age of 35,
lars can be tapped.
“All the consulting houses
are here in Saudi Arabia.
The who’s who of Saudis
are working on it,” Deputy
Governor of the Saudi Ara-
bian General Investment
Authority (SAGIA), Prince
Saud al-Faisal, told The As-
sociated Press. He said
there will be more privatiza-
tion of public services, with
the government hoping
to outsource “as much as
possible.”
In a sign of the possible
changes to come, the
deputy crown prince told
The Economist magazine
this month that the king-
dom is studying publicly
listing state-owned oil giant
Saudi Aramco. The com-
pany has said any poten-
tial listing would not include
its oil reserves.
US encourages businesses to
explore African opportunities
MICHELLE FAUL
(AP Photo/Hasan Jamali) Associated Press
LAGOS, Nigeria (AP) — U.S. Commerce Secretary Pen-
ny Pritzker and a slew of American business executives
are meeting in Nigeria to encourage trade they say
will create jobs on both continents.
nual investment confer- The visit to Nigeria, expected to be among the top 10
ence in Riyadh on Tues- economies in the world by 2050, and one of Africa’s
day as Brent crude traded smallest but most innovative nations, Rwanda, is de-
at just over $31 a barrel in signed to transform the perception of Africa from an
London, down from $115 in aid-dependent continent to a region brimming with
mid-2014. business opportunities, Pritzker told The Associated
With two thirds of Saudi citi- Press in an interview.
She said Africa has seven of the fastest 10 growing
participants said there is an economies in the world; a burgeoning young popu-
opportunity to diversify the lation and a rising middle class (50 million in Nigeria
economy away from oil alone).
and into other sectors like “So the message to Americans is now is the time to
housing, consumer goods come and explore the opportunity in Africa,” Pritzker
and services. Though the said.
kingdom has been working She announced Tuesday that the second US-Africa
on similar plans for years, oil Business Forum will take place on the margins of the
still accounted for 72 per- U.N. General Assembly in September because many
cent of total revenue last African leaders will be present. It will gather “hundreds
year. Saudi Arabia projects of both American and African business figures who
a budget deficit of $87 bil- want to get together because they see the potential
lion this year. of doing more business in Africa,” Pritzker said of the
“The historic model will not event co-hosted by her department and Bloomberg
work for the future,” said Philanthropies. President Barack Obama announced
Tareq Elmasry, managing an expanded Power Africa initiative at the first forum
director for the Middle East in Washington D.C. in 2014.
for McKinsey and Com- The figures for Nigeria tell the story: In 2014, U.S. exports
pany. He said that while to Nigeria topped $5.9 billion and imports from Nigeria
household income in Saudi totaled $3.8 billion, compared to U.S. aid of $694 mil-
Arabia has increased by lion last year.
70 percent in the past de- The latest U.S push comes as Nigeria is hurting from the
cade, 70 percent of Saudis downturn in the economy of China, which last year
work in the public sector. overtook the U.S. to become Nigeria’s biggest trading
“That’s not a sustainable partner. China accounted for 22.5 percent of Nigeria’s
number,” he told the imports in the third quarter of 2015, compared to 9.6
conference.q percent from the U.S., according to Nigeria’s National
Bureau of Statistics.
Nigeria’s current economic woes, including lower
prices for oil that produces 80 percent of government
revenue and a related slump in the naira currency,
are positives for investors, said General Electric’s Jay
Ireland, who runs the U.S. multinational’s Africa opera-
tions.
“This is the time to come in,” he said, adding Ameri-
can companies should be looking at long-term invest-
ments that ride out the cycles of oil prices and cur-
rency exchanges. “We’re going to be here for a long
time and feel very comfortable investing in Nigeria. ...
(It) provides a tremendous platform for growth.”
GE is investing $200 million in Nigeria to build two fa-
cilities to assemble oil and gas and power generation
equipment that the company hopes to export to oth-
er West African nations. The company employs nearly
500 people in Nigeria.q