When King Salman promoted Crown Prince Mohammed Bin Salman to head the economy and defence portfolios of the Kingdom, he had ambitious plans in mind. On the 24-26th of October, 2017. Wealth Managers and Financiers that once congregated to fund the development of Dubai gathered in Riyadh, Saudi Arabia to listen to ambitious plans of the Kingdom to develop a new city that comes with a $500bn price tag, invest in solar energy, solidify the plans to privatize the largest Oil Company in the world Aramco that manages the resources of a nation with 20% of the world’s proven oil reserves, restrict quotas on foreign expatriates who take up 75% of Saudi workforce by getting more young people below 40 to join the labor force, reduce subsidies for middle class, revolutionize the extremist Islamic culture into a moderate one that welcomes people of different religion and races, thereby attracting the foreign capital that is so needed to build an economy outside of crude oil.
One has to praise the foresight of the Crown Prince as his plans came years before the UK government announced ban of fossil fuel engines in its cities by 2040 for the purpose of reducing green house gas emissions and reducing the impact of global warming. With the breakthrough of Shale Oil and dramatic drop on the reliance that the US Government had on the Kingdom in an arms for oil pact, the monopoly the Organization of Petroleum Exporting Countries once had on the price of the black gold, that made any small unrest in the delta of Nigeria an issue for price analytics in European Proprietary trading desk, has long diminished. Even though the Crown Prince has committed to output cuts amongst OPEC members for 2018, the question we have to ask is this: What can Nigeria, Angola, Ghana learn from Saudi Arabia. Oil revenue receipts make 87% of Nigeria’s budget. In November of 2016, the Nigerian Government developed a medium term economic framework which was a plan geared towards diversifying the economy to sustainable areas like Agriculture, Manufacturing & Technology, but a lack of buffers in access to credit, enabling infrastructure, inflation backed surge in price of raw materials has scuttled the prospects of any real growth as the economy has only just come out of a recession to grow at a measly 0.56%.
Saudi Arabia has professionalized its Sovereign Wealth Fund and is investing in Companies like Uber, SoftBank to create value for its wealth fund and insure the future of Saudi families, even though the meagre $3bn that Nigeria has saved in the last six years is pocket money that doesn’t even begin to account for any meaningful per capita income for Nigerians. The Question is what can we learn from Saudi Arabia, a nation once unpeturbed by enterprise and closed to foreign businesses in opening our economy, diversifying our revenue streams, growing the middle class and funding our budgets through taxes while saving the Oil receipts in a sovereign wealth fund for a rainy day.
Some of the most powerful business people who control $22trillion in global wealth came from the event that concluded today with this summary:- The Kingdom means business and this is beyond a power point presentation. With all the events, conferences on economy and policy development we hold each year in Nigeria, what can we possibly do to emulate sustainable development.