By Rachna Uppal and Federico Maccioni
DUBAI, Feb 12 (Reuters) – Saudi Arabia appointed a senior executive at its sovereign wealth fund, Fahd bin Abduljalil bin Ali al Saif, as its new investment minister on Thursday as part of a shift in the Gulf state’s far-reaching economic diversification plan.
Al Saif had headed up the global capital finance division and investment strategy at the $925 billion Public Investment Fund (PIF). He replaces Khalid Al-Falih, who oversaw the kingdom’s opening to foreign investment under the Vision 2030 transformation blueprint, and has previously served as energy minister and chairman of state oil giant Aramco.
The cabinet reshuffle, in which Al-Falih was appointed Minister of State, was announced by royal decree. PIF did not immediately respond to a request for comment.
Saudi Arabia, the world’s top oil exporter, is pivoting from heavy expenditure on futuristic Vision 2030 projects such as NEOM’s The Line, to initiatives in logistics, mining, AI and other sectors seen as more pressing and potentially profitable.
“The timing is likely linked to the telegraphed shift in investment strategy, toward more high-impact and revenue-generating sectors,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.
“Central to the investment programme is the need to increase capital inflows. The change in minister is likely linked to this, alongside the focus on AI.”
Falih was appointed to the post in 2020 with the aim of opening up the economy and attracting more foreign direct investment to fund Saudi Arabia’s ambitious plans to diversify its oil-focused economy.
The kingdom is pursuing a target of $100 billion in annual foreign direct investment by 2030. While foreign direct investment has been increasing under a series of structural reforms to attract global capital and investors, it has lagged ambitious targets. FDI inflows totalled 119.2 billion riyals ($32 billion) in 2024.
‘SAFE PAIR OF HANDS’
The PIF was due to unveil a new five-year strategy this week, the biggest reset yet of the Vision 2030 strategy to reduce the Gulf country’s dependence on oil revenues.
The national repositioning also reflects mounting fiscal pressures as oil prices remain well below levels needed to fund the ambitious transformation agenda.
Within this context, Al Saif’s record in both the public and private sector will ensure he is seen as a “safe pair of hands”, said Justin Alexander, Gulf analyst at GlobalSource Partners and director at Khalij Economics.
“Al Saif is well known and respected by the investor community … He is a safe pair of hands as the kingdom works to boost investment at all levels to finance Vision 2030 during a period when lower oil prices are likely to result in fiscal and current account deficits,” Alexander said.
Al Saif set up Saudi Arabia’s National Debt Management Centre and previously held banking roles at HSBC/Awwal.
($1 = 3.7502 riyals)
(Additional reporting by Ahmed Elimam and Elwely Elwelly; Editing by Alex Richardson and Philippa Fletcher)
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