Saudi Arabia, the largest economy in the Arab world, which is undertaking a wide scale economic reform programme to lessen its dependence on oil, said its plan to sell a stake in Aramco, the world's biggest oil producing company, is on track as the kingdom refines its National Transformation Program (NTP).
"The government privatisation programme continues to gain traction and the plan for an initial public offering (IPO) of a stake in Saudi Aramco remains on track," said a spokesman for the ministry of culture and information.
"The IPO process is well underway and Saudi Aramco remains focused on ensuring that all IPO-related requirements are completed on time and to the very highest standards."
The government statement did not say how much precisely it plans to sell, but Crown Prince Mohammed bin Salman has previously stated it would be as much as 5 per cent of the company, which is valued at US$2 trillion. The listing would be the world's biggest IPO and may raise as much as $100 billion for the state.
At the same time, the government said it was fine tuning the NTP to make it more efficient. The new version of the multi-pronged reform initiative will be called NTP 2.0.
"A significant focus of NTP2.0 will be to improve efficiency and effectiveness of delivery across institutions," the ministry of information said.
"With more than half of the strategic objectives under NTP1.0 now assigned to the other Vision Realisation Programs, NTP 2.0 will focus on 36 strategic objectives by allocating them to various NTP portfolios."
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Saudi Arabia has been following an economic diversification agenda to lower dependence on hydrocarbons as primary revenue streams in the wake of the biggest crash in the price of hydrocarbons since the financial crash of 2008.
Under Vision2030 outlined by Crown Prince Mohammed bin Salman, the country has started to reduce energy subsidies and outline plans for new revenue streams that include various forms of taxation, developing its manufacturing sector and most notably the sale of stakes in government-owned companies such as the oil and gas firm Saudi Aramco. The NTP was one aspect of Vision2030 while the Fiscal Balance Program (FBP) was the other when Vision2030 was announced last year. In May of this year, 10 Vision Realization Programs were added to NTP and FBP.
The ministry of culture and information said that NTP 2.0 differs from NTP1.0 in that that under NTP2.0 some 36 strategic objectives would be focused on and allocated to 10 portfolios that will be assigned to individual ministries.
The announcement from the ministry came on the heels of reports in the media that the kingdom was redrafting the original NTP to align its aims with the broader 2030 vision, especially given that NTP targets for ministries had been set for 2020.
While Saudi Arabia has made progress in drumming up sources of revenues, such as reducing subsidies and tapping global debt markets to raise funds, economists have expressed concern that the pace of reforms is not fast enough to kindle the kind of economic growth needed to meet demand for jobs.
"We still see substantial challenges ahead in terms of implementing the programme, especially around timing," said Monica Malik, the chief economist at Abu Dhabi Commercial Bank.
"There are already signs of a delay in the implementation of the fiscal reforms, as the earlier reforms continue to drag on economic activity. Moreover, the government has not made any progress with its fiscal stimulus package, which is vital to support the private sector and meet key investment objectives.
Ms Malik said that a higher oil price, bigger inflows of foreign direct investment as well as the sale of stakes in state assets are vital for the kingdom to meet its long-term economic and social objectives.