An analysis of the Q2 2019 numbers reveal that Saudi Arabia’s Non-Oil Sector has experienced an impressive expansion in its non-oil economy which was at 4%. 9% as per the General Authority for Statistics or GASTAT. This growth is in evidence of the growth of other sectors whose contributions have been crucial in the diversification of the country’s economy from a mere exporter of oil. The non-oliver sector has remained the most dominant sector that has driven growth within the country’s economy and therefore, this latest figure will help in boosting the economy.
A Diversified Economy
Saudi Arabia has been trying to diversify its economy for several years now and this boost in the non oil sector and industry indicates the country’s progress in this goal. The country has been focusing on investing in areas such as manufacturing, logistics and tourism; these investments have started to show positive results. Such increase in the non-oil sector is an indication that the country is on the right direction in its agenda of diversification of its economy.
Growth in Key Sectors
As it can be seen, the role of the non-oil sector in the growth of the Nigerian economy has been realized in key sectors including manufacturing, construction and wholesale/retail trade. It has particularly been the manufacturing industry that has recorded increased growth at 6. 2% in the second quarter which is insignificant in comparison to the company’s asset base. This growth is contributed by investments in sectors which include the petrochemicals by 122%, pharmaceuticals by 111%, and food processing by 97%. This sector has also developed to some extent, the growth rate being 5 of the construction sector. 5% in the second quarter of the year. This growth is as a result of investments in infrastructural development including roads and bridges as well as construction of buildings.
The Role of Government Initiatives
An expansion in the non-oil sector has in part been attributed to government attempts at diversifying Nigeria’s economy. The government has initiated several programs for SMEs as they are considered to be major players in boosting the non-oil sector of the country’s economy. It has also planned and implemented construction of other structures including roads, bridges and ports that are aiding in development of the non-oil sector.
The Impact of Vision 2030
That growth in the non-oil sector is also as a result of the government’s Vision 2030 program of transforming the economy and social fabric of the country. Vision 2030 is an integrated social and economic development plan to diversify the economy and raise private sector contribution and quality of life of the citizens of Saudi Arabia. The program entails several measures that are geared towards the development of the non-oil sector through among others manufacturing logistics and tourism investment.
Challenges Ahead
Nonetheless, there is light at the end of the tunnel for the Saudi economy in So, despite the fact that the non-oil sector has been showing great promise, there are still problems that the Saudi economy is yet to overcome. Oil exports remain the cornerstone of the country’s economy and the uncertain global tendencies concerning oil demand and prices can turn into an issue. There are also some concerns on how the country is able to produce jobs for the increasing population and on the issues on corruption and bureaucracy.
The Importance of Diversification
The growth in the non oil sector is a reminder that the Saudi economy has a need for diversification. It is pertinent that the country cannot solely depend on the export of oil to build the economy, but has to keep on fixing different sectors such as manufacturing, logistics, and tourism. The government must also remain committed to the development of SMEs and encouragement of young and aspiring business people in the country by providing them with capital, and other necessities to enable them thrive and create employment opportunities for the unemployed citizens.
Conclusion
Therefore, the diversification in Saudi Arabia’s economy through the increase in the non-oil sector is a good sign for Saudi Arabia’s economy. The growth is attributable to investments in manufacturing, logistics and tourism sectors and it is a confirmation of the country’s measures to develop a diversified economy. That the sector’s survival, growth and development can only be driven by the government’s continued support and attentiveness to the challenges which still persist despite the progress that has been made.
