AMMAN — The World Bank confirmed that Jordan’s ongoing economic reforms under the Second Growth and Competitiveness Development Policy Financing program aim to lower market entry and operational costs for businesses, modernize regulations, and foster competition to attract investment and create jobs.
اضافة اعلان
On Wednesday, the World Bank’s Board of Executive Directors approved a $700 million loan to help Jordan translate economic stability into stronger private investment and better employment opportunities. The program supports government efforts to stimulate private investment, expand access to finance, create jobs, and accelerate green and digital transitions.
According to the program document reviewed by Al Mamlaka, improving private investment conditions—by cutting regulatory compliance costs, increasing legislative predictability, boosting competition, expanding financial inclusion, and deepening access to finance and capital markets—is crucial for increasing foreign direct investment (FDI) and stimulating domestic investment. The document added that the reforms aim to steer investments toward high-value sectors capable of creating sustainable jobs, particularly for youth and women.
Boosting Competition and Improving the Business Environment
The reforms include strengthening the enforcement of competition law against anti-competitive practices, such as anti-competitive agreements, to improve market efficiency and enhance the investment climate.
Licensing system reform is also a key focus. The government plans to reform, eliminate, or simplify licenses in priority sectors to reduce regulatory burdens on businesses. This initiative aims to cumulatively increase the number of reformed sectoral licenses from zero in 2024 to 20 by the end of 2028.
The reforms extend beyond the regulatory environment into the energy and mining sectors. They aim to enable private investment in renewable energy generation projects and electricity transmission networks, while setting minimum capital commitments for new mining concessions. This strategy intends to mobilize $150 million in cumulative private investment by the end of 2028.
Additionally, the program focuses on modernizing the digital business environment by expanding electronic notarization to reduce reliance on paperwork and in-person visits. The government targets raising the share of electronically processed notarization transactions to 20% of the annual total by 2028, up from zero in 2024.
Micro, Small, and Medium Enterprises (MSMEs) are also prioritized. The program aims to increase their share of government procurement contracts from 41.5% to 45% annually by the end of 2028.
Furthermore, the reforms target increasing women's labor force participation from 15.2% in 2024 to 17% by late 2028. They also aim to boost the total number of active insured individuals with the Social Security Corporation from 841,339 to 969,942. This includes increasing insured women from 265,117 to 307,161, and insured youth (aged 15–24) from 298,136 to 343,111.
Deepening Access to Finance
The program dedicates a second pillar to deepening access to finance, supporting private sector-led growth by expanding financial inclusion, developing capital markets, and diversifying corporate funding sources.
The government aims to transition outgoing state payments to fully integrated digital paths—from approval to disbursement without paperwork—moving from zero in 2024 to 90% by the end of 2028.
The reforms also target reaching 50,000 active small business bank accounts by 2028, including 15,000 owned by women or women-led enterprises, to facilitate financial access for small businesses and entrepreneurs.
To mobilize private capital, the program utilizes financing instruments such as securities, Sukuk (Islamic bonds), Initial Public Offerings (IPOs), crowdfunding, cash-flow-based financing, investment funds, and solutions developed within regulatory sandboxes. The goal is to raise cumulative private capital mobilized through these tools from $1.08 billion to $1.58 billion by the end of 2028.
Credit information infrastructure will also be modernized by issuing credit reports through digital channels and integrating SME cash-flow data, aiming for a cumulative total of 250,000 issued credit reports by 2028.
In green finance, the document sets a target of $230 million in cumulative new bank loans aligned with green taxonomy by late 2028.
Finally, the program aims to increase insurance penetration (gross written premiums as a percentage of GDP) from 1.88% to 2.10% by 2028, alongside building $21 million in cumulative reserves within the insurance policyholders' protection system.
The World Bank document outlines that these indicators form the framework to measure the program’s impact through 2028 across business environment enhancement, private investment growth, job creation, financial inclusion, capital market development, green finance, and efficient digital government services.
(Al Mamlaka)
