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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鈥檚 expenditures in 2023 amounted to 32.3 percent of GDP which increases the expectations that spending on programs is efficient and effective, and that investments have 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鈥檚 financial framework to ensure sustainable government spending by diversifying revenue sources and reducing reliance on oil.

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 rank in the World Bank Government Effectiveness Index and been recognized by the IMF on the significant progress in enhancing transparency in government procurement through the implementation of 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 aims to explore a transformative concept where cultivating an investment mindset in the public sector is key to maximizing the benefits from public spending, as it represents a shift from the traditional, cost and spend-focus to a more holistic and investment-focused approach. Such a shift has the potential to transform public sector operations, resource allocation, service improvement, and as a result, deliver greater value and impact.

This concept sets the stage for a deeper understanding of the spending efficiency ecosystem in Saudi Arabia and highlights the levers that boost government performance and to become more sustainable and efficient. Working on these levers is vital to improving the maturity of spending efficiency practices in public sector organizations and hence increasing efficiency. Understanding these levers is the first step toward effectively finding sustainable solutions to increase efficiency.

In this publication, we introduce the key steps needed to build a culture of holistic evaluation and implementation of spending efficiency opportunities and we conclude 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.