Saudi council approves National Transformation Plan

06 June 2016

Council for Economic and Development Affairs will now present plan to the cabinet for approval

Saudi Arabia’s Council for Economic and Development Affairs (Ceda), the kingdom’s supreme body overseeing its economic diversification efforts, has approved the National Transformation Plan (NTP).

Ceda will present the NTP, a roadmap detailing steps about how Saudi Arabia will steer its revenue base away from hydrocarbons sales, to the cabinet on 6 June for approval, UK news agency Reuters cited an unnamed senior Saudi source aware of the matter as saying.

“The final draft of the [NTP], which is one of the programmes adopted as part of the Vision 2030, has been launched by the deputy crown prince and president of [Ceda],” the senior source said.

Details of the plan, a programme of wide-ranging economic reforms, will be revealed in daily news conferences with government ministers starting from 6 June, the source said. The NTP is expected to further flesh out Vision 2030, announced by Deputy Crown Prince Mohammed bin Salman al-Saud in late April to radically overhaul the country’s economy. Subsidy cuts, tax rises, sales of state assets, a government efficiency drive and efforts to spur private sector investment are expected to be part of the NTP.

The kingdom has identified about 146 state assets that could be privatised or sold to the public, as Opec’s largest oil producer looks to monetise assets amid falling crude revenues.

Saudi Aramco is on top of the list of the companies that will be part-privatised. Among others is Saudi Grains Organisation, Saudi Ports and several subsidiaries of different government ministries.

Riyadh has also been cutting spending and trying to raise fresh revenues to plug an expected $86bn budget gap this year. It has sold local currency bonds to banks and financial institutions in the kingdom and agreed terms for a $10bn loan with a group of international financiers in May. The kingdom has invited banks to submit proposals for a bond sale as it aims to raise as much as $15bn from the sovereign issue.

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