Municipal investments can contribute SAR 20 billion annually to KSA's GDP, says Bain & Company

Benefits include government revenue worth SAR 5 billion and 125 thousand jobs

27 February 2020 - Diverse municipal investments can give rise to more internationally competitive cities in Saudi Arabia and accelerate the Kingdom’s development in line with Vision 2030 by contributing SAR 20 billion annually to gross domestic product (GDP). Global management consulting firm Bain & Company presented this finding during the recently concluded Municipal Investments Forum in Riyadh.   

Bain & Company led a workshop titled the ‘Role of Municipal Investment in Achieving Vision 2030 and Associated Impact’ during the forum, which took place Feb. 24 – 26, 2020 to highlight an array of investment opportunities in Saudi Arabia’s municipalities.

Samer Bohsali, a Middle East-based partner in Bain & Company’s Public sector practice led the workshop. During the presentation, Mr. Bohsali noted that municipal investments are pegged to achieve SAR 5 billion to government revenue annually apart from creating 125 thousand jobs for the locals and residents.  

“Given the immense economic impact of municipal investments, it is critical to entice more investors into supporting initiatives in various municipalities and governorates,” said Mr. Bohsali. “Investments such as these are key to building competitive cities in Saudi Arabia in support of the goals and objectives of Vision 2030.”

According to Mr. Bohsali, municipal investments can support 35 objectives of Vision 2030 and its six main programs, namely Privatization, Housing, Quality of Life, Hajj, National Transformation, and Fiscal Balance.

“It is significant for governments worldwide, not just in Saudi Arabia, to focus on building competitive cities because of their many economic benefits,” he said. “A competitive city’s GDP growth stands at 5x compared with average cities. Job growth stands at 4.5x relative to average cities. In terms of income growth, competitive cities experience a 10x increase compared with average cities.”

Besides municipal investment contributions to Vision 2030, Mr. Bohsali also shared with the attendees, how Saudi Arabia's cities are performing today based on the main components of a competitive city. The Kingdom presents many opportunities, including mixed-use developments, which provide residential, office, and commercial space, to local, regional, and global investors in line with Vision 2030.

This year’s Municipal Investments Forum highlighted not only the many opportunities in the municipal sector but also provided a platform for the participants from the public and private sectors to build partnerships, share ideas, and propose solutions to challenges. Bain & Company’s session was one of a series of workshops during the event.