In January, Qatar launched its third National Development Strategy, the final phase of efforts to achieve the goals of the Qatar National Vision 2030. The third stage is multifaceted and on the economic front it focuses on sustainable economic growth.
While Qatar seeks to strengthen its global leadership in the oil and gas sector, it is also seeking to accelerate the growth of its non-hydrocarbon economy. The goal is to achieve average annual real carbon-free growth of 4% by 2030, focusing on expanding manufacturing, tourism, logistics, education, health, food and agriculture, financial services, and information technology and digital services in addition to the future. clusters around critical technologies and national assets.
The third phase revolves around creating an investor-friendly business environment, promoting entrepreneurship and enhancing the competitiveness of local companies while attracting foreign investment: US$100 billion (up from US$76 billion in 2022, according to the latest available World Bank data) direct investment across official data.
Qatar’s economy is making good progress towards diversification. The successful hosting of the 2022 FIFA World Cup was one of the biggest achievements in the non-oil economy; tourism has received a major boost, with visitor numbers increasing from 600,000 in 2021 to more than four million last year, and the event creating more business and employment opportunities for Qataris. Since then, the kingdom has hosted several more international sporting events.
Non-oil GDP is currently growing faster than oil GDP, says Junaid Ansari, director of investment strategy and research at asset management firm Kamco, and all sectors in the growth clusters, including tourism, logistics and manufacturing, are growing at significant rates growth. progress.
“We expect Qatar to become one of the fastest growing economies in the Gulf Cooperation Council, as well as globally, in the medium term,” Ansari says. By 2030, the volume of non-oil projects will amount to more than $150 billion, Ansari comments.
However, the government is not leaving the energy sector. S&P Global Market Intelligence forecasts Qatar’s real GDP growth to average 4.4% over the medium term (2026-2030), higher than short-term forecasts (2024-2025), mainly due to expected growth in gas exports, almost all of which has a “ready market, as the demand for liquefied natural gas [LNG] Electricity production is growing all over the world,” says Ansari. The government hopes that this, as well as economic diversification in collaboration with a strong private sector, will make Qatar one of the world’s top investment destinations.
“We believe the country’s hydrocarbons sector will remain dominant for the foreseeable future,” says Jamil Naayem, deputy director of economics for the Middle East and North Africa at S&P Global Market Intelligence. “In particular, development of the North Field in two phases will likely lead to a significant increase in gas production capacity from 77 million metric tons per year to 142 by the end of 2030.”
Qatar recently announced it plans to increase gas supplies by a further 16 million tonnes amid likely strong demand from Asia and Europe as they seek to diversify their energy sources. S&P Global Market Intelligence forecasts average real GDP growth for Qatar at 4.4% over the medium term from 2026 to 2030, primarily due to expected growth in gas exports.
Finance oriented
Qatar’s financial services development goals are ambitious but achievable, Ansari argues, given the growing importance of Gulf countries such as Qatar as part of the global emerging markets universe. The government sees finance and banking as a key support for the economic diversification project, especially in fintech, and as a means of attracting more foreign capital.
Qatar Financial Center (QFC) recently signed a memorandum of understanding with Partior, which provides a technology-based, global unified ledger market infrastructure for clearing and settlement to help boost the kingdom’s financial market.
“The signing reflects QFC’s commitment to forming strategic partnerships with global industry leaders to develop secure and sustainable financial infrastructure in Qatar,” Yousuf Mohamed Al Jaida, QFC CEO, said in a statement. “We are committed to enhancing innovation and providing a conducive ecosystem for the growth and development of the fintech sector and companies in the industry.”
Last year, in line with Qatar National Vision 2030, Qatar Central Bank (QCB) launched its Qatar FinTech Strategy 2023. The goal is to develop and diversify the financial services sector and enhance competitiveness, and is based on four pillars: building innovative infrastructure, prioritizing innovation and growth in the financial technology sector, empowering companies through financial technology offerings, and establishing Qatar as a financial technology hub. technologies.
The Qatar Financial Technology Hub (QFTH), supported by the Qatar Development Bank (QDB), is a critical element of QBC’s fintech strategy. Its main goal is to contribute to the development of the fintech industry by collaborating with key stakeholders such as financial institutions, technology providers, payment networks, global fintech hubs and regulators. The program is supported by a $100 million venture capital fund managed by QDB.
Enter venture capital
The goal of development is to create new enterprises along with existing and foreign enterprises.
In February, the Qatar Investment Authority (QIA) announced a major initiative to revolutionize the kingdom’s startup ecosystem with the introduction of its first venture fund of funds (FOF) with a commitment of over $1 billion. Designed to stimulate innovation in the Gulf region and attract global venture capital, the FOF (which does not yet have an official name) will be complemented by the recently launched Startup Qatar platform, which aims to support new businesses and position Qatar as a significant player in the global startup scene. QInvest, Qatar’s leading investment bank, will support these initiatives through financial intermediation and advisory services. The Bank is also considering the possibility of direct participation in the FOF.
The financial services sector is ambitious, but
attainable
A key aspect of the National Development Strategy is the privatization of some enterprises and the strengthening of public-private partnerships. PPPs promote economic diversification and support the creation of a knowledge-based economy, stimulating innovation and competitiveness across all sectors. By participating in or facilitating PPPs, QInvest and other banks expect to benefit from the creation of new investment opportunities, particularly in emerging sectors and specialized economic clusters.
QInvest expects increased capital market activity across equity and debt capital markets in 2024. This includes developing an active debt market, attracting institutional investors, facilitated by the planned introduction of sophisticated market features such as short selling and securities lending, and creating incentives for local investors. investors to improve asset allocation and help preserve capital domestically.
Qatar is also expanding its equity capital market through strategic initiatives to attract investors and improve market liquidity, including the development of a new derivatives market. Last year, QInvest led the successful closing of the first-ever listing on the Qatar Stock Exchange for the IPO of Meeza QSTP, a managed IT services and solutions provider.
Much of the growth in Qatar’s financial sector is driven by Qatar National Bank (QNB), the region’s largest bank. In 2023, QNB supported the North Field expansion project aimed at increasing LNG production in Qatar over the next few years. QNB financed the project’s value chain through subcontracting and also assisted in several other major projects in related sectors.
The bank expects clients to seize new opportunities in LNG, attracting local and international investment, while the NFE project will create additional benefits in other industries, including petrochemicals and heavy manufacturing.