RIYADH, SAUDI ARABIA – The General Authority for Small and Medium Enterprises (Monsha’at) has released its latest quarterly SME Monitor, which showed a 3.5 percent growth in the number of SMEs in the Kingdom in Q3 2023, bringing their total number to 1.27 million.
With over 40,000 new businesses created across the country in Q3, the monitor indicated that 43.3 percent of SMEs are now located in the booming financial capital of Riyadh.
The Saudi economy, driven by strong non-oil growth of 3.6 percent in Q3, is now expected to expand by 0.8 percent in 2023, according to the IMF, outpacing average G20 growth.
Highlighting trends across the broader Saudi economy, the latest monitor contained sections on the Kingdom’s expanding manufacturing sector, which grew by 4.6 percent year-on-year in Q3 2023, according to the General Authority for Statistics (GASTAT).
With Saudi Arabia aiming to establish itself as a leading industrial and manufacturing hub, a series of large public initiatives driven in part by the National Industrial Development and Logistics Program (NIDLP) helped more SMEs enter these spaces in Q3 2023, the monitor added.
With over 11,000 factories now operating in the Kingdom, 136 new industrial licenses were issued by the Ministry of Industry and Mineral Sources alone in August 2023.
According to the monitor, SMEs have also shown considerable progress in Al-Qassim Province, particularly in mining and agriculture.
With nearly 60,000 SMEs, Al-Qassim has 105 active mining licenses.
While its mining industry produces four million tons of bauxite each year, the only such source in the Middle East, the region’s farmers produce 1.22 million tons of dates, lemons, oranges, grapes and other agricultural products each year, giving credence to its nickname as the breadbasket of the Kingdom.
Throughout the quarter, SMEs also continued to benefit from a diverse range of innovative upskilling programs, as detailed in the monitor.
Monsha’at hosted five week-long upskilling events to help SMEs attract funding, expand their business, and enter the commercial franchise, healthcare and legal sectors.
Throughout Q3, over 100,000 SMEs benefited from one of Monsha’at’s programs.
According to the monitor, the private sector continued to propel the Saudi economy in Q3 2023 due to these and other initiatives.
Buoyed by robust private sector investment in SMEs, which increased year-on-year by 18.8 percent in Q2 2023 to US$70 billion (SAR262.7 billion), the Kingdom’s non-oil growth is a symptom of a rapidly maturing ecosystem whose entrepreneurs are now driving Saudi Arabia’s ambitious diversification targets.