AMMAN: Jordan’s cabinet approved on Wednesday a 9.25 billion dinar ($13 billion) budget for 2019 as part of a reform of public finances to ease the country’s record debt burden and spur economic growth hit by conflict in the region, officials said.
Finance Minister Izzedin Kanakrieh said the budget, which will be sent to parliament for approval, envisaged a deficit equal to 2 percent of Jordan’s gross domestic product.
The cabinet expects state revenues of 8.6 billion dinars next year, boosted by IMF-backed tax increases to help the kingdom restore fiscal prudence for a sustained recovery, the officials added.
Estimates in the projected budget include around 600 million dinars in foreign aid. Direct cash support by major donors traditionally covers chronic budget shortfalls.
Kanakrieh told the pro-government al Mamlaka television station that a tax bill that parliament approved earlier this month will help the government to cut down on rampant tax evasion.
Critics say the tax bill will dampen domestic consumption and deal a blow to investor sentiment, already hit by political uncertainty over risks of a new wave of protests.
An earlier version of the bill triggered some of the largest protests in years last summer that brought down the previous government.
Prime Minister Omar al Razzaz has pushed the new tax bill, saying its passage was needed to get a clean bill of health from the IMF and lower the cost of servicing over $1.4 billion in foreign debt due next year.
Jordan’s economy has been badly hit by conflict in neighboring Syria and Iraq, both traditionally major trading partners.
Its public finances are under strain and the government is struggling to curb a public debt of over $37 billion, equivalent to 96 percent of GDP.
An expansionist fiscal policy in previous years characterised by job creation in the public sector had pushed the debt to record levels.
Over the last two years the kingdom has raised general sales taxes and cut subsidies under an IMF austerity program aimed at lowering public debt to 77 percent of GDP by 2021.
Jordan cannot expect high levels of aid that have underpinned the stability of the kingdom to be maintained indefinitely, Western donors say.
But the austerity steps have hurt the economy, with growth expected to continue to stagnate at around 2 percent next year. That is almost half the levels seen over the last decade during a boom period fed by high aid levels and capital inflows and investments.
While the government has focused on fiscal reforms, it has refrained from public wage reforms that remain a red line, donors say.
Economists say maintaining a large bureaucracy which consumes the bulk of state expenditure is increasingly untenable.
Jordan cabinet approves $13bn budget for 2019
Jordan cabinet approves $13bn budget for 2019
- Finance Minister Izzedin Kanakrieh said the budget, which will be sent to parliament for approval, envisaged a deficit equal to 2 percent of Jordan’s gross domestic product
- An earlier version of the bill triggered some of the largest protests in years last summer that brought down the previous government
Egypt signs $120m deal to establish pharmaceutical industrial zone
RIYADH: Egypt is set to establish a $120 million pharmaceutical industrial hub in the Suez Canal Economic Zone, marking a significant move toward localizing medicine production and bolstering its regional manufacturing position.
The agreement was finalized between SCZONE’s investment arm, SCZONE Istithmar, and the Arab Pharmaceutical Materials Co., or Arab API, which will oversee the new facility. The deal was signed in the presence of Khaled Abdel Ghafar, Egypt's minister of health, alongside other high-ranking officials.
The deal outlines plans for a new facility in Sokhna Industrial Area, spanning 96,828 sq. meters. It will focus on producing key raw materials for the pharmaceutical industry, further strengthening Egypt's self-sufficiency in medicines. The site will produce active and inactive ingredients, intermediate materials, and chemicals essential for drug manufacturing.
“This project reflects SCZONE’s commitment to localizing the pharmaceutical industries in Egypt and strengthening its position in this field to become a regional hub for this industry based on the capabilities of SCZONE,” said Waleid Gamal El-Dien, chairman of SCZONE.
He added that SCZONE is dedicated to fostering an attractive investment environment with the infrastructure needed to ensure the success of such projects. “This project marks a significant shift in Egypt's pharmaceutical industry sector,” he continued.
“It is not just an industrial project, but it is an implementation of Egypt’s vision based on integration between all concerned parties to achieve self-sufficiency in essential medicines, and reduce the gap between supply and demand in the local market,” Gamal El-Dien said.
The partnership will see SCZONE Istithmar collaborate with Arab API to build, manage, and operate the plant. The contract was signed by Ahmed Saeed Kilani, chairman of Arab API, and Mohamed Abdel Gawad, SCZONE’s vice chairman for investment and promotion affairs, on behalf of their organizations.
The facility aims to meet local pharmaceutical needs while positioning Egypt as an exporter, strengthening the country’s manufacturing capacity.
Ghafar noted that the investment in the facility is a vital step in enhancing public health services and contributing to the national economy. He emphasized the government’s focus on achieving self-sufficiency and reducing pharmaceutical imports.
The new plant will support Egypt’s rapidly growing pharmaceutical industry, meeting rising domestic demand and positioning the country as a key player in the global market.
The $120 million investment is part of a broader pharmaceutical initiative within SCZONE, which includes other factories such as Ateco Pharma and Genavex Egypt, further strengthening local production capabilities.
In addition, SCZONE has earmarked 4 million sq. meters for the creation of a larger pharmaceutical industrial zone in partnership with the Egyptian Authority for Unified Procurement. This initiative underscores the government’s push for collaboration across stakeholders to achieve long-term self-sufficiency in medicine production.
The new plant is expected to reduce Egypt's reliance on imported pharmaceuticals, boost local production, and expand exports. It is part of the government’s broader strategy to modernize and expand the pharmaceutical sector, improve health services, and contribute to Egypt’s economic development.
SCZONE has played a key role in attracting investment to Egypt’s pharmaceutical sector, leveraging its strategic location and competitive advantages. The Sokhna Industrial Zone, where the new plant will be located, already hosts successful pharmaceutical projects, including Ateco Pharma’s intravenous injection drugs factory and Genavex’s vaccine manufacturing facility.
Saudi weekly PoS transactions close 2024 with $3.6bn in value: SAMA
RIYADH: Saudi Arabia’s consumer spending soared in the final week of 2024, with point-of-sale transactions climbing 17.2 percent week-on-week to SR13.8 billion ($3.6 billion), official data showed.
Figures from the Saudi Central Bank, also known as SAMA, revealed significant growth across all sectors between Dec. 22 and Dec. 28, with the total number of transactions hitting 211.97 million during the week.
The telecommunications sector led the growth in transaction value, reporting a 29.6 percent week-on-week increase to SR132.5 million.
The recreation and culture sector followed closely, with a 27.7 percent rise, amounting to SR286.3 million. Seasonal gifting trends also contributed to a 26.1 percent increase in the jewelry sector, which recorded SR315 million in transactions.
The food and beverage sector posted a 22.9 percent jump, reaching SR2 billion.
Other sectors also saw substantial increases in transaction values. The education sector rose 20.7 percent, while health and furniture reported growth of 16.4 percent and 16.2 percent, respectively.
Miscellaneous goods and services, as well as clothing and footwear, recorded similar growth at 16.2 percent and 16 percent. The restaurants and cafes sector grew by 14.4 percent, with transportation close behind at 14.2 percent.
In terms of transaction volume, the jewelry sector led with a 25.4 percent week-on-week increase, reaching 231,000 deals.
Telecommunications saw a 13.9 percent rise, followed by recreation and culture with a 13.3 percent increase, and transportation with an 11.8 percent growth.
Clothing and footwear transactions rose by 11.5 percent, furniture by 10.6 percent, and miscellaneous goods and services by 8.9 percent.
Regionally, Hail reported the highest growth in transaction value, with a 29.1 percent increase to SR218.9 million. The city also saw a 15 percent rise in the number of deals, reaching 3.65 million.
Tabuk followed, posting a 28.9 percent growth in transaction value to SR270.5 million and an 11.3 percent rise in the number of transactions, totaling 4.57 million.
Madinah recorded a 23.3 percent increase in value to SR594.8 million, alongside a 9.9 percent growth in the number of transactions.
Riyadh, however, saw the highest overall transaction value at SR4.7 billion, reflecting a 12.4 percent increase. The capital also recorded a 6.2 percent rise in transaction volume.
Jeddah followed with a 13.4 percent increase in transaction value and a 5.9 percent rise in transaction volume.
Saudi Arabia standardizes USB Type-C charging ports for electronic devices
RIYADH: As part of an initiative to improve user experience and reduce electronic waste, Saudi Arabia will adopt a unified charging standard for electronic devices, mandating USB Type-C ports. The new regulation, which took effect on Jan. 1, follows a decision by the Communications and Space Technology Commission in partnership with the Saudi Standards, Metrology, and Quality Organization.
The goal of this unification is to streamline charging and data transfer technology across the Kingdom, ensuring higher-quality technical products and enhancing consumer convenience.
CST and SASO have estimated that the new policy will reduce the local demand for various types of charging ports by over 2.2 million units each year. It will also save consumers more than SR170 million ($45.2 million) annually and support the Kingdom’s sustainability goals by cutting electronic waste by nearly 15 tonnes per year.
The first mandatory phase includes mobile phones, tablets, digital cameras, e-readers, portable video game consoles, headphones, earphones, loudspeakers, keyboards, computer mice, portable navigation systems, and wireless routers. A second phase, beginning on April 1, will expand the mandate to include laptop computers.
Aramco raises diesel prices in Saudi Arabia to $0.44 per liter
RIYADH: Saudi Aramco has increased diesel prices in Saudi Arabia to SR1.66 ($0.44) per liter, effective Jan. 1, 2025, marking a 44.3 percent rise compared to the start of 2024.
According to the latest update on Aramco’s website, the company has kept gasoline prices unchanged, with Gasoline 91 priced at SR2.18 per liter and Gasoline 93 at SR2.33 per liter.
The annual review of diesel prices is part of Aramco’s pricing mechanism, implemented in 2022. This year marks the fourth review under the system. In January 2024, the Kingdom raised diesel prices to SR1.15 from SR0.75 per liter, continuing its gradual adjustments.
Despite the hike, diesel prices in Saudi Arabia remain lower than those in many neighboring Arab countries. In the UAE and Qatar, a liter of diesel is priced at $0.73 and $0.56, respectively, while in Bahrain and Kuwait, it costs $0.42 and $0.39 per liter.
Aramco’s website also lists the current price of kerosene at SR1.33 per liter and LPG at SR1.04 per liter.
On Dec. 31, Aramco announced reductions in the official selling prices for propane and butane for January 2025. The price of propane was reduced by $10 per ton, while butane saw a $15 per ton cut compared to the previous month.
Aramco’s OSPs for LPG are key benchmarks for contracts supplying the product from the Middle East to the Asia-Pacific region.
Additionally, the energy giant reduced pricing for its Arab Light crude oil for Asian buyers in January 2025. The OSP for Arab Light was cut by 80 cents, bringing it to $0.90 per barrel above the regional benchmark. Arab Extra Light and Super Light grades saw reductions of 60 cents and 70 cents per barrel, respectively, while Arab Medium and Heavy grades experienced cuts of 70 cents per barrel.
These adjustments reflect Aramco’s ongoing efforts to align its pricing strategy with market dynamics while supporting its broader energy goals.
SAMA grants licenses to 2 new fintech firms
RIYADH: Saudi Arabia’s fintech ecosystem is expanding further with the Saudi Central Bank, or SAMA, granting licenses to two new service providers.
Tal Finance has been authorized to offer debt-based crowdfunding solutions, making it the 12th company in the Kingdom to provide such services. This addition brings the total number of finance companies licensed by SAMA to 62, highlighting the increasing role of alternative financing solutions in Saudi Arabia.
Meanwhile, SAMA has granted a license to Hiberbay Ink Al-Saoudia for IT Systems to deliver e-wallet services, increasing the total number of payment service providers in Saudi Arabia to 27. This move is aimed at promoting digital payment solutions and accelerating the Kingdom’s shift toward a cashless economy.
These developments align with Saudi Arabia’s Vision 2030 objectives to bolster the digital economy, expand financial inclusion, and increase the share of cashless transactions to 70 percent by 2025.
SAMA’s efforts are also tied to the Financial Development Sector strategy, which aims to have 525 active fintech companies operating in the Kingdom by 2030.
“Managing the transformation of the financial sector is a cornerstone of Vision 2030,” SAMA said in a statement, highlighting its focus on innovation and efficiency.
Through these initiatives, the central bank seeks to foster financial stability, stimulate economic growth, and position Saudi Arabia as a global fintech leader.
The fintech sector is expected to play a pivotal role in driving foreign investment, projected to contribute 20 percent of total foreign inflows. This growth is fueled by Saudi Arabia’s tech-savvy population, which is embracing consumer fintech innovations like buy now, pay later services.
In an interview with Arab News in December, Arjun Singh, partner and global head of fintech at Arthur D. Little Middle East, highlighted the natural evolution of Saudi Arabia’s consumer finance landscape, driven by an expanding array of financial products tailored to the diverse needs of its growing market.
He added that the Saudi BNPL market is poised to grow from $1.4 billion in 2024 to $2.8 billion by 2029, reflecting a compound annual growth rate of over 10 percent.
SAMA’s recent licensing activity underscores its commitment to supporting innovation while ensuring financial stability and efficiency. As the Kingdom’s fintech landscape expands, these developments are expected to drive significant economic and technological progress.
