Industries in Saudi Arabia are said to have a big appetite for privatisation, as the Gulf kingdom moves towards the implementation phase of Vision 2030, according to a new report by Oliver Wyman.
The report said it is pertinent for Saudi Arabia to act now to diversify its economy and increase reserves.
With the GCC countries increasingly considering regulation for privatised industries and the subsequent implementation, the case of Saudi Arabia stands out with the announcement of privatising 5 percent of Saudi Aramco’s shares, it noted.
It suggested that the top candidates for privatisation are government entities within the power and water sectors such as Saudi Electric Company, the Saline Water Conversion Corporation and Sadara, the semi government chemical company.
Oliver Wyman said each of these industries have relatively high investor appetite and are anticipated to provide a positive impact on the economy.
“The rapid change in policies in Saudi Arabia suggests that the climate is ripe for privatisation in the kingdom,” said Jeff Youssef, partner, Public Sector, Oliver Wyman.
“We conducted a market survey across significant government industries and we were able to conclude that a change in the perception of the privatisation regulation among the stakeholders was on the horizon.
“The public in Saudi Arabia are increasingly ready to embrace change and we were able to note the increase in appetite for investment across many sectors. Privatisation can accomplish much good if executed well, and we believe that the market currently will pave way for the ease of implementation,” he added.
The report also highlighted that the smooth transition to privatisation has the potential to play an integral part in Saudi Arabia’s reform and diversification strategy.