Spending efficiency in Saudi Arabia's public sector

The pursuit of efficiency in government spending has become a critical global concern due to mounting pressures from rising debt levels to the growing demands of an aging population, increasing the need to improve public sector spending efficiency.

Saudi Arabia is no exception. According to the International Monetary Fund (IMF), Saudi Arabia’s expenditures in 2023 amounted to 32.3 percent of GDP which increases the importance that spending is efficient, effective, and provides good value for money.1 As part of Vision 2030, Saudi Arabia has set an ambitious strategic objective to enhance effectiveness of financial planning and efficiency of government spending. It has done this through the launch of its Fiscal Balance Program to reform the Kingdom’s financial framework to ensure sustainable government spending.

These efforts and focus have paid off. The Kingdom is now becoming a benchmark in areas such as government procurement and digitalization. It has improved its ranking in the World Bank Government Effectiveness Index and has been recognized by the IMF for the significant progress in enhancing transparency in government procurement through the implementation of the digital Etimad platform. According to the Digital Government Authority, the Kingdom has jumped 25 places in the UN E-Government Development Index (EGDI) 2024, achieving fourth position globally, first regionally, and second among the G20 countries on digital services index.

This paper builds on the leading practices we have implemented to drive spending efficiency impact and deliver value to our clients. It explores the shift from the traditional, cost and spend-focus to a more holistic and investment-focused approach.

Throughout the report, we introduce the key steps needed to build a culture of holistic evaluation and implementation of spending efficiency opportunities, concluding by highlighting the way forward for government entities to embed an investment mindset in their vision, strategy, culture, capabilities, operations, technology, and decision-making process.