Saudi Arabia announced on Friday the disbursement of a new tranche of financial support to the Yemeni government's budget, raising questions about the progress of ongoing governmental reforms aimed at stabilizing the economy in government-controlled areas.
The Saudi Ambassador to Yemen, Mohammed Al-Jaber, stated on the platform "X" that a portion of the support for the Yemeni government's budget deficit had been released to cover state employee salaries, amounting to over 224 million Saudi riyals. The disbursement, facilitated by the Saudi Program for the Development and Reconstruction of Yemen, was carried out under the directives of the Saudi leadership and the follow-up of the Minister of Defense, Khalid bin Salman.
Al-Jaber indicated that this support would contribute to the regularity of financial flows for the government, provide hard currency, bolster the stability of the Yemeni riyal's exchange rate, and support the government's efforts in delivering essential services and achieving economic stability. This amount represents the second installment of aid, following Riyadh's announcement in early February of 1.3 billion Saudi riyals (approximately 346 million dollars) to cover employee salaries and budget deficits.
The Saudi announcement of continued support underscores the persistent financial crisis confronting the Yemeni government since the cessation of oil exports in late 2022, attributed to attacks by the Houthi militia. This situation prompts inquiries into the fate of governmental reforms announced in mid-2025, which were incorporated into a Presidential Leadership Council decision in early November of the same year. These reforms primarily focused on revenue collection in government-controlled regions.
Approximately a month ago, the government took a significant step by revising the customs dollar exchange rate from 750 Yemeni riyals to the prevailing market rate, which currently stands at 1,570 riyals, under the banner of enhancing domestic revenue. This adjustment is projected to more than double monthly customs revenues, increasing them from around 60 billion riyals to over 120 billion riyals. This figure notably exceeds the value of the latest Saudi support package, which amounts to approximately 90 billion riyals.
Furthermore, the anticipated customs revenue following the liberalization of the customs dollar rate is equivalent to the monthly allocation for salaries of employees, military personnel, and security forces in government-controlled areas. While the government has faltered in its commitments regarding services and other sectors, salary payments remain the sole publicly declared obligation the government is meeting towards its citizens. This raises questions about the government's continued reliance on Saudi support for salary disbursements, particularly when it is theoretically capable of covering these expenses through a single revenue stream—customs—independent of other collection efforts.
The persistent dependence on Saudi aid raises significant questions regarding the government's capacity to effectively enforce revenue collection across the liberated territories, more than eight months after the Presidential Leadership Council's directive on the matter.
