The Ministry of Investment in Jordan has announced an ambitious plan to attract JD1.25 billion ($1.76 billion) in investments in 2025, reflecting a 19% increase from the projected JD1.05 billion by the end of 2024. These objectives are outlined in the draft General Budget Law for the coming year. Central to these efforts is the ministry’s focus on enhancing the completion rate of its comprehensive investment service automation project, aiming for 70% completion by 2025, up from 65% in 2024.

Strategic Vision for Investment Growth

Jordan’s investment strategy emphasizes improving the business environment, streamlining investment procedures, and leveraging its strategic location as a gateway between the Middle East, Africa, and Europe. The government also aims to reduce bureaucratic red tape, improve infrastructure, and promote targeted investment sectors, such as tourism, energy, healthcare, and technology. Economist Waseem Hussein underlines that these measures are vital for fostering a competitive and investor-friendly climate.

However, challenges persist. Investors continue to face obstacles such as lengthy licensing processes, regulatory inconsistencies, and unclear sector-specific investment opportunities. Ahmad Mheisen, an investor in the healthcare sector, emphasized the need for more transparent regulations and attractive tax incentives to lure both local and international investors. Mahmoud Salah, a housing and land developer, noted that the lack of clarity on opportunities adds uncertainty, deterring potential investors.

Enhancing Infrastructure and Digital Transformation

The government’s plan also includes significant infrastructure development and the digital transformation of its investment processes. Automation of investment services not only promises efficiency but also aligns with Jordan’s goal of positioning itself as a tech-savvy nation capable of supporting foreign direct investment (FDI). By 2025, the ministry aims to reduce the average time required to complete investment-related transactions, addressing a longstanding concern among investors.

Efforts to modernize Jordan’s infrastructure include projects in energy, transportation, and technology. Notably, initiatives like solar and wind energy farms highlight Jordan’s pivot toward sustainability, attracting environmentally conscious investors.

Regional Context and Competitive Edge

Jordan’s investment strategy is part of a broader trend in the Middle East, where countries are vying to attract FDI through economic diversification. The UAE, Saudi Arabia, and Egypt, for instance, have launched aggressive campaigns to enhance their investment landscapes. In comparison, Jordan is emphasizing its political stability, skilled workforce, and untapped market opportunities as key differentiators.

International Partnerships and Aid

Jordan continues to seek international partnerships to bolster its investment agenda. Organizations like the World Bank and International Monetary Fund (IMF) have extended support for economic reforms in Jordan. Recently, foreign governments have also pledged to invest in strategic sectors, including renewable energy, healthcare, and logistics.

Moreover, the US and EU have expressed interest in supporting Jordan’s sustainable development initiatives. For instance, a recent collaboration with the European Investment Bank has secured funding for infrastructure upgrades and digital transformation projects.

Investment Challenges and Reform Needs

While Jordan’s aspirations are ambitious, experts caution that achieving these targets will require significant reforms. Regulatory hurdles, inefficiencies, and inconsistent policies have been cited as barriers to sustainable investment growth. To address these, the government is under pressure to implement reforms that create a transparent, predictable, and competitive environment for investors.

Investors have also called for sector-specific clarity to make informed decisions. For instance, renewable energy, a priority sector, requires clearer guidelines and incentives to attract green investment. Similarly, industries like tourism and real estate could benefit from streamlined approval processes and marketing campaigns highlighting Jordan’s unique offerings.

Outlook for 2025 and Beyond

Despite these challenges, the outlook for Jordan’s investment landscape remains positive. By focusing on digital transformation, infrastructure upgrades, and regulatory reform, the government aims to position Jordan as a regional investment hub. The increase in investment targets for 2025 reflects confidence in these measures.

Economic analysts suggest that achieving the $1.76 billion target will hinge on the successful execution of the ministry’s strategic objectives. Transparency, efficiency, and investor-centric policies will be crucial in attracting and retaining investments.

In conclusion, while Jordan’s ambitious plans signal a promising future, their realization will depend on the government’s ability to address systemic challenges and foster a conducive environment for investors. With continued focus on reforms and strategic investments, Jordan could unlock its full economic potential and emerge as a key player in the region’s investment landscape.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

29th November, 2024