Saudi Arabia approves new initiatives to support local businesses

The government will allocate 50bn riyals to speed up payments to the private sector

Saudi Arabia on Tuesday approved a new mining law to boost investments in the country. AP

Saudi Arabia's King Salman bin Abdulaziz Al Saud on Wednesday approved a package of additional measures to mitigate the impact of the coronavirus on its economy.

The government set aside 50 billion riyals (Dh48.96bn) to speed up payments to the private sector, according to the Saudi Press Agency. It will also provide a discount of 30 per cent on electricity bills for businesses in the commercial, industrial and agricultural sectors for a period of two months, with the possibility of extensions if needed, the statement said.

The government will also allow subscribers in the industrial and commercial sectors to pay just half of their electricity bills during the second quarter, provided the the remainder is collected in installments over a six-month period from the start of next year.

The payments are the latest in a series of measures being undertaken by the kingdom's government to relieve some of the strain on companies whose businesses have been hit by the coronavirus. Saudi Arabia has already announced 120bn riyals of measures to support the economy, including 50bn riyals dedicated to small and medium-sized enterprises.

The kingdom will also pay a minimum level of salary to self-employed drivers – those working in passenger transport who "are not under the umbrella of any company and registered with Public Transport Authority" that can no longer work due to the shutdowns that have been put in place in many cities to prevent the virus's spread.

The new initiatives, including exemptions and payments of the dues to the private sector, come as an extension of previously-announced initiatives to support the private sector, said Saudi Arabia's minister of finance and acting minister of economy and planning,  Mohammed bin Abdullah Al-Jadaan.

For instance, the government is providing, through the Sanid system, 60 per cent of salaries of Saudi private sector employees worth a total of 9bn riyals, he said.

These include the exemptions and postponement of some government dues to provide about 70bn riyals of liquidity to the private sector, plus a 50bn riyal package to support the banking sector, financial institutions and SMEs.

Mr Al-Jadaan also said that 47bn riyals is being allocated to the health sector, which will be used to provide necessary medical supplies such as artificial respirators and to buy medicines and fund additional hospital beds.