By Mohd Khairy Abdullah
KOTA KINABALU, 17 Dis 2025 — Sabah is reaffirming its position as a high-impact growth and investment hub in Borneo and East Asia through the 2026 State Budget, which places the people and local interests at the forefront. The theme “Driving Development, Prioritising People’s Well-being” reflects the state government’s strategic commitment to strengthening industries, expanding entrepreneurship, and developing transportation infrastructure as a catalyst for inclusive growth.
This budget embodies the Sabah First mission, emphasizing that Sabah’s economic development is built from within, for its people, while enhancing its attractiveness to foreign investment and its role in the regional geo-economic landscape.
Speaking at the Sabah State Legislative Assembly, Datuk Ewon Benedick, Deputy Chief Minister III and Minister of Industry, Entrepreneurship, and Transportation, stressed that the budget is not merely a fiscal document but also a geopolitical and economic statement — positioning Sabah as a strategic industrial hub in ASEAN–Borneo–East Asia.
The State Government has allocated RM105.67 million for supplies and RM88.36 million for development, reaffirming industry, entrepreneurship, and transportation as the pillars of Sabah’s economy. These funds are channelled through strategic agencies such as SEDCO, KKIP, POIC Sabah, SOGDC, and the state transportation department, now consolidated under a single ministry to enhance governance efficiency.
A development allocation of RM43.53 million is earmarked for upgrading infrastructure in major industrial parks including KKIP, POIC Lahad Datu, and SOGIP Sipitang — reinforcing Sabah’s competitiveness as an investment destination and strengthening local industrial supply chains.
In the economic-political dimension, the Sabah First approach is implemented through labour and human capital development policies. The government prioritises 80% local workforce in the industrial sector, ensuring that the benefits of economic growth are directly felt by Sabah communities.
As of the third quarter of 2025, Sabah recorded RM7.54 billion in manufacturing sector investments, making it the sixth-highest state in Malaysia. Large-scale investments such as Kibing, SK Nexilis, and Esteel not only add industrial value but also create thousands of high-skilled job opportunities and drive international technical training programs.
Socially, the 2026 Budget focuses on empowering micro, small, and medium enterprises (MSMEs) as the backbone of the rakyat economy. A RM15 million allocation for the SME-UP Program continues with a new approach emphasizing capacity building, productivity, and impact monitoring. Campaigns like Buy Sabah-Made Products and active participation in international expos demonstrate that local products are increasingly penetrating global markets, with international sales potential reaching RM95.9 million in 2025, surpassing initial targets.
The consolidation of the transportation portfolio under a single ministry is viewed as a strategic move to support the industrial ecosystem. Ports, rail, and logistics are now regarded as critical economic infrastructure. The expansion of Teluk Sepanggar Container Port is expected to enhance Sabah’s trade capacity and efficiency, while continued investment in the state railway system opens opportunities for industrial integration from the hinterlands to the ports.
Looking ahead, the State Government plans to introduce the Sabah Investment Plan 2030, a strategic master plan to align investment promotion, industrial policies, and the state’s economic direction to be more proactive, competitive, and sustainable.
Overall, the 2026 Sabah Budget presents a new development narrative — grounded in decisive political leadership, high-impact economic policies, and inclusive social concern. In an increasingly challenging global landscape, Sabah emerges with confidence that its economic future can be built from within, for its people, while reinforcing its position in the ASEAN–Borneo–East Asia region.
