Saudi Arabia’s localization plan is reshaping consultancy sector - and more beyond

The Kingdom has pioneered telemedicine and e-health services, enabling virtual consultations and remote surgeries to reach the farthest communities. (SPA)
The Kingdom has pioneered telemedicine and e-health services, enabling virtual consultations and remote surgeries to reach the farthest communities. (SPA)
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Updated 19 May 2024
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Saudi Arabia’s localization plan is reshaping consultancy sector - and more beyond

Saudi Arabia’s localization plan is reshaping consultancy sector - and more beyond
  • Plan a huge opportunity for Saudi Arabia to boost local jobs and reduce its reliance on foreign workers

RIYADH: As Saudi Arabia embarks on a journey aimed at boosting job opportunities for citizens, the localization plan for consultancy professions and businesses plays a crucial role.

In October 2022, the Kingdom’s Ministry of Human Resources and Social Development issued a decision mandating that from the end of March 2024, 40 percent of workers in firms in this sector must be Saudi nationals.

The decision targeted all professions in the sector, most notably financial advisory specialists, business advisers, and cybersecurity advisory specialists, as well as project management managers, engineers, and specialists.

This targeted localization, or Saudization, is part of the cooperation between the Ministry of Human Resources and Social Development and supervising bodies, represented by the Ministry of Finance, the Local Content and Government Procurement Authority, the Expenditure and Project Efficiency Authority, and the Human Resources Development Fund.   

The collaboration aims to elevate the presence of cadres in the sector and boost the percentage of Saudis, contributing to the development of local content in this strategic sector. It also seeks to organize the labor market.

The ministry is meant to support private sector establishments in several ways, including helping them in hiring Saudis by supporting the training and qualification of employees, as well as supporting employment procedures and other initiatives.  

On a similar note, the Local Content and Government Procurement Authority is required to follow up on the commitment to include Saudization requirements in consulting contracts.

It has also issued a guide that clarifies the details of localizing the consultancy sector and professions, and the mechanism of implementing it.  

Reshaping the consultancy sector     

Azeem Zainulbhai, co-founder and chief product officer at talent-on-demand platform Outsized, believes the Saudization rules in the sector will help keep more money in the Kingdom, even though training costs could increase.

“This move means less reliance on experts from abroad in key fields like finance, project management and cybersecurity. Essentially, it’s about creating more jobs for Saudis in important, well-paying sectors and making sure they're trained for these roles,” he told Arab News.

“The end objective is to get better at handling projects and business dealings that are specific to Saudi culture and regulations, stimulate private sector growth, and foster a knowledge-based economy ultimately making companies more efficient and competitive globally,” the co-founder emphasized.

Bashar El-Jawhari, consulting partner at PwC Middle East, also stated that the localization plan initiated by Saudi Arabia marks a significant milestone in reshaping the consulting sector within the Kingdom.  




Azeem Zainulbha, Co-founder and chief product officer at Outsized

“With the launch of the second phase, we anticipate several key transformations that will contribute to the development and empowerment of local talent,” El-Jawhari told Arab News.

“Firstly, as young Saudi professionals enter the workforce, we expect a notable increase in demand for consulting services related to project and transformation management, financial and legal advisory, as well as procurement and supply chain management,” he added.

By having more Saudis in consulting, businesses can better navigate local market dynamics and regulations.

Azeem Zainulbha, Co-founder and chief product officer at Outsized

The consulting partner went on to note that the influx of senior Saudi talent into the consulting industry presents an opportunity for firms to leverage their experience and insights to drive business growth.

Sectors to be affected  

The localization push of course expands beyond the consultancy sector, Zainulbhai noted.

“Tourism and hospitality can really use local insights to attract more visitors and celebrate Saudi culture. Major construction and engineering projects, like the NEOM and the Red Sea Project, will also benefit from having local experts who understand the specific requirements and standards needed,” he said.

The Outsized executive also shed light on the fact that the healthcare, IT, cybersecurity, and renewable energy sectors are all set to improve with more local consultants who bring a deep understanding of regional needs and regulations.

“Local financial experts will be key in adapting to Saudi Arabia’s unique market, especially as it continues to grow and change,” Zainulbhai commented.

Overall, sectors essential to the diversification from oil will see substantial growth and development from this localization.  

“When looking at various sectors, certain areas are poised to benefit more prominently than others. For example, the government and public sectors are likely the first to benefit in light of the transformation journey towards Vision 2030,” El-Jawhari affirmed.

The consulting partner explained that as Saudi Arabia continues its journey toward achieving the ambitious goals outlined in Vision 2030, there is a growing emphasis on enhancing the efficiency and effectiveness of government operations.

“Consulting services play a vital role in supporting this transformation by providing strategic guidance and expertise in areas such as organizational restructuring, process optimization, and performance management,” El-Jawhari commented.

He added: “Furthermore, nationals equipped with experience in operational excellence are well-positioned to contribute to these efforts by implementing measures aimed at optimizing operational processes, reducing costs, and enhancing productivity.”

Potential opportunities

The plan is a huge opportunity for Saudi Arabia to boost local jobs and reduce its reliance on foreign workers, which aligns perfectly with the broader Vision 2030 goals.

“By having more Saudis in consulting, businesses can better navigate local market dynamics and regulations,” added Zainulbhai.

He continued to underscore that local consultants can offer insights that make companies more competitive, especially in sectors where understanding local consumer behavior is crucial.

He also clarified that businesses that follow these new hiring rules may find it easier to onboard government clients.

“The focus on local talent is also great for fostering innovation and could help companies set up successful programs to nurture new ideas in fields like digital tech and sustainability,” Zainulbhai explained.

From El-Jawhari’s point of view, the localization plan presents opportunities for Saudi nationals to enter the consulting profession, contributing to the development of a vibrant knowledge-based economy.

Potential challenges  

While there are many benefits, the plan also brings several challenges. According to Zainulbhai, those include filling talent gaps, adjusting to cultural shifts, and meeting new regulatory standards.

“To tackle these, businesses could set up mentorship programs where seasoned international consultants train up-and-coming Saudi professionals. Setting up special training centers to quickly upskill workers could also help,” the co-founder described.




Bashar El-Jawhari, Consulting partner at PwC Middle East

“There might be some resistance to these changes within companies, so promoting a culture that values diverse perspectives will be important,” he added.

Zainulbhai also believes that consulting with local legal experts will be crucial to stay on top of new regulations.

We anticipate several key transformations that will contribute to the development and empowerment of local talent.

Bashar El-Jawhari, Consulting partner at PwC Middle East

“Although initial costs might be high, businesses can look into government subsidies or focus on tech solutions to reduce long-term expenses and increase efficiency,” he said.

From PwC’s perspective, El-Jawhari said that the availability of fresh, well-educated Saudi graduates provides consulting firms access to junior talent.

“The challenge lies in retaining them beyond the first 4 to 5 years. Government and semi-government entities begin to recruit these nationals, who have gained experience in international consulting firms, to join their workforce,” he stressed.

The consulting partner went on to explain that another challenge is attracting mid-career Saudi consultants who are in high demand and short supply.

“The third challenge is distinct specialties. For example, with the strong drive toward diversifying the economy, there is a need for consulting experience across sectors such as industrial, defense, tourism and culture, sports, and entertainment, supported by international experience,” El-Jawhari revealed.

He further disclosed: “Overall, finding Saudi talent in relatively new sectors of the economy is quite challenging.”

“To expand the pool of mid-career Saudis, a program between government entities and consulting firms could be established. The program could include seconding talented mid-career Saudis into consulting firms for 1 to 2 years,” El-Jawhari clarified.

He wrapped up with this regard saying that this gives consulting firms access to mid-career Saudi talent and in return, government entities gain a mid-career professional equipped with consulting experience.

Vision 2030 implications  

Undoubtedly, this plan provides a key piece of the bigger Vision 2030 puzzle, which aims to diversify the economy beyond oil and boost public services like health and education.

“By increasing Saudi involvement in consulting, the plan helps keep more money in the country and creates high-value jobs that are crucial for modernizing the economy,” Zainulbhai said.

The co-founder also mentioned that it also focuses on upgrading the skills of the Saudi workforce, which is essential for innovation and sustained economic growth.

“More local consultants mean the private sector can grow stronger and more independent, making Saudi Arabia a more appealing place for investors and helping develop key sectors,” he concluded.

On the other side, El-Jawhari shed light on how two key outcomes of Vision 2030 are a thriving economy and a vibrant society.

“Pushing for a higher level of consulting localization will create higher-paid jobs for Saudi nationals, resulting in a more vibrant society that enjoys a higher quality of life,” the consulting partner reiterated.

“Additionally, local talent can provide the necessary expertise in specific consulting services to catalyze economic diversification,” he concluded.

 


Saudi banks’ new residential mortgages rise 17% to $24bn

Saudi banks’ new residential mortgages rise 17% to $24bn
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Saudi banks’ new residential mortgages rise 17% to $24bn

Saudi banks’ new residential mortgages rise 17% to $24bn
  • Saudi Central Bank data show highest issuance in 2 years
  • Home ownership at 63.74% in 2023, goal of 70% by 2030

RIYADH: Saudi Arabia’s banks issued SR91.1 billion ($24.28 billion) in new residential mortgages to individuals in 2024 — a 17 percent rise on the previous year, according to official data.

Figures from the Saudi Central Bank, also known as SAMA, show that this is the highest annual mortgage issuance in two years.

The fourth quarter of 2024 accounted for 33 percent of the total, likely coinciding with the declining interest rate environment. This trend underscores the strong demand for home financing in the Kingdom, as well as the impact of monetary policy shifts on borrowing costs.

The Kingdom is steadily progressing toward its goal of 70 percent home ownership by the end of the decade.

According to the latest official data from the Housing Program — an initiative under Vision 2030 — Saudi family home ownership reached 63.74 percent in 2023.

As economic diversification initiatives continue to boost housing development and home-ownership aspirations, the Kingdom’s mortgage landscape is expected to remain dynamic, influenced by both global and domestic trends.

The increase in residential mortgage issuance signals growing confidence in Saudi Arabia’s real estate market. With declining interest rates and ongoing government efforts to expand home ownership, the Kingdom’s housing sector appears poised for sustained growth in the years ahead.

One of the key factors influencing mortgage rates in Saudi Arabia is the Saudi Interbank Offered Rate, or SAIBOR, which serves as a benchmark for floating-rate loans.

Given the Saudi riyal’s peg to the US dollar, fluctuations in interest rates in the North American country have a direct impact on SAIBOR and, consequently, on borrowing costs in the Kingdom.

In September, the US Federal Reserve initiated a shift in monetary policy, cutting interest rates by 50 basis points. This was followed by two additional rate reductions of 25 basis points each in November and December.

The easing of US monetary policy translated into lower SAIBOR rates, making home financing more accessible and contributing to the notable expansion of residential lending.

While the recent decline in mortgage rates has fueled demand, future SAIBOR movements will be contingent on multiple factors, including the Federal Reserve’s policy trajectory, Saudi Arabia’s economic conditions, and banking sector liquidity.

At the third Public Investment Fund Private Sector Forum in Riyadh this month, Saudi Arabia’s Minister of Municipalities and Housing Majid Al-Hogail announced that 65 local developers have invested over SR200 billion in the housing sector, highlighting the private sector’s key role in urban development.

Al-Hogail emphasized that Vision 2030 is driving a transformation in Saudi Arabia’s real estate sector, with developments ranging from affordable housing to luxury projects.

He also stressed the need to redefine city planning to align with economic diversification and the Kingdom’s rapidly growing urban population.

According to the minister, the municipal and housing sectors contributed over 16 percent to Saudi Arabia’s real gross domestic product in 2024, while the real estate and construction sectors attracted nearly 16 percent of total foreign investment inflows.

He further noted that residential transactions in Riyadh increased by 51.6 percent between July 2023 and July 2024, totaling 18,500 sales valued at SR26.6 billion, citing a report from real estate services firm CBRE.

Al-Hogail also highlighted the remarkable growth in real estate financing, stating that the banking sector’s real estate financing portfolio expanded from SR165 billion to over SR850 billion.

He attributed this growth to a stimulating and supportive investment environment, which, he said, has reached a favorable stage for both local and international private sector players.

Saudi Arabia’s banks are adopting multiple strategies to enhance liquidity and sustain real estate lending growth. One key approach is issuing sukuk and conventional bonds to strengthen their capital base, ensuring they have sufficient funds to continue mortgage lending.

Additionally, the Saudi Real Estate Refinance Co. plays a vital role by purchasing mortgages from banks, freeing up liquidity for new loans and improving market stability.

Government support also remains a crucial factor, with initiatives from the Ministry of Housing and the Real Estate Development Fund providing guarantees and subsidies that reduce banks’ lending risks and encourage further mortgage issuance.

Furthermore, Saudi Arabia’s banks are diversifying their funding sources by forming partnerships with global investors and foreign banks, attracting more capital into the real estate financing sector.

At the same time, digital transformation is playing an increasing role, with banks integrating fintech solutions, automated credit assessments, and digital mortgage platforms to streamline loan processing, reduce operational costs, and improve accessibility for borrowers.

These combined efforts are helping banks maintain a steady flow of liquidity while supporting the Kingdom’s growing real estate sector.


Oil Updates — crude steady, heads for weekly gain amid improving demand, supply jitters

Oil Updates — crude steady, heads for weekly gain amid improving demand, supply jitters
Updated 21 February 2025
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Oil Updates — crude steady, heads for weekly gain amid improving demand, supply jitters

Oil Updates — crude steady, heads for weekly gain amid improving demand, supply jitters

TOKYO/SINGAPORE: Oil prices were steady on Friday and poised for a weekly increase amid an improving outlook for demand in the US and China, while concerns over supply disruptions in Russia also lent support.

Brent futures dipped 3 cents to $76.45 a barrel by 7:14 a.m. Saudi time while US West Texas Intermediate crude edged down 4 cents to $72.44.

Both indexes have gained over 2 percent this week — the largest weekly advances since early January. Brent would be marking a second week of gains after three weeks of declines. WTI is set to have its first week of gains after four weeks of declines.

Global oil demand has averaged 103.4 million barrels per day through Feb. 19, a 1.4 million bpd increase, JPMorgan analysts said in a note on Friday.

They expect cold weather in the US and increased industrial activity in China as people return from holidays to contribute more demand in the coming week.

US crude oil stockpiles rose while gasoline and distillate inventories fell last week as seasonal maintenance at refineries led to lower processing, the Energy Information Administration said on Thursday.

“Drawdowns of US gasoline and distillate stockpiles, along with concerns over tight supplies in Russia, are supporting oil prices,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.

“Expectations for a potential peace deal between Russia and Ukraine, which could ease sanctions on Moscow, have faded somewhat due to Ukraine’s hardened stance, prompting some investors to buy back into the market,” he added.

Ukraine President Volodymyr Zelensky earlier in the week was enraged by US and Russian moves to negotiate a peace deal without Kyiv and comments by US President Donald Trump blaming Ukraine for starting the three-year-old conflict with Moscow.

However, following a meeting with Trump’s envoy for the Ukraine conflict on Thursday, Zelensky said Ukraine was ready to work quickly to produce a strong agreement on investments and security with the US.

US Treasury Secretary Scott Bessent told Bloomberg Television on Thursday that Russia could win some relief from US sanctions based on its willingness to negotiate an end to its war in Ukraine.
Meanwhile, disruptions to oil supply continued to keep prices elevated.

Russia said Caspian Pipeline Consortium oil flows, a major route for crude exports from Kazakhstan, were reduced by 30 percent-40 percent on Tuesday after a Ukraine drone attack on a pumping station.

Kazakhstan has pumped record high oil volumes despite damage on its main export route via Russia, the Caspian Pipeline Consortium, industry sources said on Thursday. It was not immediately clear how Kazakhstan had been able to pump record volumes. 


Closing Bell: Saudi main index closes in green at 12,388   

Closing Bell: Saudi main index closes in green at 12,388   
Updated 20 February 2025
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Closing Bell: Saudi main index closes in green at 12,388   

Closing Bell: Saudi main index closes in green at 12,388   

RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Thursday, gaining 70.56 points, or 0.57 percent, to close at 12,388.15. 

The total trading turnover of the benchmark index was SR5.95 billion ($1.58 billion), as 95 of the listed stocks advanced, while 137 retreated.    

The MSCI Tadawul Index increased by 13.19 points, or 0.86 percent, to close at 1,551.49. 

The Kingdom’s parallel market Nomu rose, gaining 44.37 points, or 0.14 percent, to close at 31,474.69. This came as 40 of the listed stocks advanced, while 47 retreated. 

The best-performing stock was Anaam International Holding Group, with its share price surging by 6.33 percent to SR23.84. 

Other top performers included Etihad Etisalat Co., which saw its share price rise by 5.35 percent to SR63, and Tourism Enterprise Co., which saw a 4.65 percent increase to SR0.90. 

The biggest decline of the day was seen in Al Sagr Cooperative Insurance Co., with its share price dropping 9.83 percent to SR15.96. 

Saudi Steel Pipe Co. saw its share price drop 6.77 percent to close at SR67.50, while Astra Industrial Group fell 4.81 percent to SR182, reflecting broader market pressures.

Following this, Saudi Steel Pipe Co. reported its annual results for 2024, with net profits rising 15.21 percent year-on-year to SR250 million. 

In a Tadawul filing, the company said the profit increase was driven by a rise in gross profit to SR399 million in 2024 from SR283 million the previous year, largely due to higher sales volumes. 

Astra Industrial Group reported interim financial results for the period ending Dec. 31, with net profits rising 23.99 percent year on year to SR589.34 million. 

The company attributed the growth to higher gross profit across all sectors, increased sales value, and a rise in other income. 

Meanwhile, shares of Yamama Cement Co. fell 1.89 percent on the main market today, closing at SR36.25. 

In a separate announcement, Nayifat Finance Co. posted its annual results for 2024, with net profits surging 47.93 percent to SR131.23 million. 

The company credited the profit increase to higher operational earnings, driven by a decline in the net charge for expected credit loss allowance due to improved write-off recoveries. 

In today’s trading, Nayifat Finance Co.’s shares edged up 0.83 percent on the main market to close at SR14.74. 


Qurayyah power plant to expand by 3.01 GW thanks to $3.6bn investment

Qurayyah power plant to expand by 3.01 GW thanks to $3.6bn investment
Updated 20 February 2025
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Qurayyah power plant to expand by 3.01 GW thanks to $3.6bn investment

Qurayyah power plant to expand by 3.01 GW thanks to $3.6bn investment

JEDDAH: Saudi Arabia is boosting its energy security with an SR13.4 billion ($3.57 billion) investment to expand the Qurayyah power plant, adding 3.01 gigawatts to meet growing demand and support economic growth.

Saudi Electricity Co. and ACWA Power have signed a power purchase agreement with Saudi Power Procurement Co., the Kingdom’s sole licensed electricity buyer, to expand Qurayyah Independent Power Plant. This facility is the largest combined-cycle gas-fired independent energy station in the world.

The initiative supports the Kingdom’s Vision 2030 by improving electricity generation efficiency, reducing costs, and diversifying energy sources to replace liquid fuels in the power sector. It aims to enhance reliability and sustainability through advanced combined-cycle gas turbine technology while reducing carbon emissions and promoting environmental conservation.

The project, overseen by the Ministry of Energy, aims to increase Saudi Arabia’s electricity capacity and efficiency by adding combined-cycle power plant units designed for future carbon capture. According to the principal buyer, the deal was signed with a consortium led by ACWA Power, SEC, and Hajji Abdullah Alireza & Co. Ltd., with SEC and ACWA Power each holding a 40 percent stake.

As one of the Kingdom’s largest power generation projects, it includes the financing, construction, ownership, and operation of a combined-cycle gas power plant, along with the development and transfer of a 380-kilovolt electrical substation, according to the Saudi Press Agency.

SEC is the largest electricity producer, transmitter, and distributor in the Middle East and North Africa, serving over 11 million customers.

ACWA Power — the world’s largest private desalination company — announced that on Feb. 19 it received a notice from the Al-Shuaiba 2 Solar PV Independent Power Plant project company, confirming that it has been granted the commercial operation certificate by the SPPC for the first, second and third groups, with a total capacity of 2,060 MW.

In a statement on Tadawul, the firm added that the initiative is now fully operational, noting that it owns a net stake of 35.01 percent share in the project company.

The body expects the financial impact to be reflected in the current year’s second quarter.


Saudi investment ministry inks deal with Sana to boost entrepreneurial ecosystem in Al-Ahsa

Saudi investment ministry inks deal with Sana to boost entrepreneurial ecosystem in Al-Ahsa
Updated 20 February 2025
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Saudi investment ministry inks deal with Sana to boost entrepreneurial ecosystem in Al-Ahsa

Saudi investment ministry inks deal with Sana to boost entrepreneurial ecosystem in Al-Ahsa

RIYADH: A new cooperation agreement between the Ministry of Investment and Prince Ahmed bin Fahd bin Salman Center will see Saudi Arabia enhance its entrepreneurial ecosystem in the Al-Ahsa region.

The deal signed with the center, also known as Sana, focuses on attracting pioneering companies and innovators while fostering a business-friendly environment.

The Kingdom is increasingly being recognized for its growing enteprise-friendly landscape, securing third position in the 2023-2024 Global Entrepreneurship Monitor report.

The latest initiative, inked at the Al-Ahsa Forum 2025 in Al-Ahsa, also seeks to foster greater engagement with creative thinkers and business leaders through investment meetings and events, and will support the issuance of entrepreneurial licenses and provide access to essential services.

Moreover, the Sana agreement seeks to explore investment opportunities, encourage strategic partnerships, and promote investment alliances that enhance the competitiveness of the entrepreneurship sector in Saudi Arabia.

The new deal comes against a backdrop of venture capital pouring into the Kingdom, with the country retaining its position as the leading destination for such funds in the MENA region in 2024, raising $750 million, according to a report from regional venture platform MAGNiTT.

This marked the second consecutive year the Kingdom has led regional VC rankings. Saudi Arabia accounted for 40 percent of the total amount deployed in MENA, closing 178 deals, the most of any nation in the region.

Speaking to Arab News at at the LEAP 2025 Tech Conference held in February, Mohammed Al-Zubi —founder of Saudi venture capital firm Nama Ventures — explained that the nation is rapidly becoming a key player in the regional technology ecosystem and is emerging as the “center of gravity” for Middle East startups.

Al-Zubi believes Saudi Arabia’s support for the startup ecosystem is unmatched globally. Having spent time in Silicon Valley, London, and the Middle East, he argued that the Kingdom’s government-led initiatives are unparalleled.

According to the international policy advisory and research organization Startup Genome, Riyadh ranked among the top five startup ecosystems in the Middle East and North Africa in June, in collaboration with the Global Entrepreneurship Network.