RIYADH: Localization in Saudi Arabia’s total military spending has increased by almost 10 percentage points since the launch of the Local Content and Procurement Authority in 2018, a senior official said.
National spending reached 11.7% of total military spending in 2021, up from 2% just four years ago.
Speaking at the Local Content Forum in Riyadh on Monday, Ahmed Al-Ohali, Governor of the General Authority for Military Industries, said the Saudi military industry sector is witnessing a qualitative movement in terms of localization.
“When the authority started, the percentage of localization in the Kingdom of the total military expenditure was 2%. By the end of 2021, we had achieved 11.7% of the total military expenditure in the form of purchases. We are working also currently finding a new mechanism to measure localization in order to include the level of local content in this spending,” said Al-Ohali.
He added that GAMI has developed legislative and regulatory frameworks that help support the localization process and the development of local content.
“The role of the authority is to help military and security authorities increase the efficiency of procurement management and benefit from procurement contracts for the location of military industries,” Al-Ohali said.
He revealed that the number of national installations in the military sector has increased from five to 174 since the launch of GAMI.
“When the authority was established, the number of national facilities operating in military industries was 5, and now we have 291 industrial and service permits and licenses for 174 companies. And there is 41% military manufacturing, 42% military and civilian manufacturing, and 17% support services for the military industries sector,” he said.
Al-Ohali further noted that GAMI is focused on developing policies and mechanisms that encourage local and international investors to invest in the Kingdom.
He also pointed out that healthy supply chains are absolutely crucial in the military industry sector.
He added: “When we worked on the supply chain project, we identified 74 opportunities for a supply chain program covering 6 areas of defense and security, and estimated their total cost at approximately SR270 billion ($71.83 billion). I am sure to realize 50% of these promising opportunities by 2030 with incentives and support. »