Military spending in Saudi Arabia 19.4% localized: GAMI

Ahmed Al-Ohali, Governor of the General Authority for Military Industries (GAMI)

Saudi Arabia localized 19.35% of its military spending, compared with 4% in 2018, with plans to exceed 50% by 2030, said Ahmed Al-Ohali, Governor of the General Authority for Military Industries (GAMI), during a panel discussion at the 2024 Local Content Forum in Riyadh.

He added that the number of licensed entities in the military industries sector increased to 296 until Q3 2024.

The governor emphasized the development of local supply chains and procurement, noting that SAR 13 billion was allocated to domestic companies for projects such as unmanned aerial vehicles (UAVs), rapid interceptor boats, and the maintenance of defense systems.

Local content development is a cornerstone of Saudi Vision 2030, Al-Ohali said, with the military sector achieving a local content rate of 38%.

The sector’s contribution to GDP is estimated at SAR 5 billion, he noted.

GAMI introduced 11 policies and regulations to enhance governance, build investor confidence, and support local manufacturing and service capabilities, creating numerous high-value job opportunities.

To further support local content, the authority signed four framework agreements covering 70 categories, including military apparel, equipment, weapons, and ammunition. The agreements already generated contracts worth SAR 1 billion, yielding a 20% cost savings.

The agreements are also expected to grow to SAR 1.6 billion, with the entire amount to be spent in the domestic market.

Al-Ohali underscored efforts to simplify licensing processes and create an attractive investment environment for local and international companies.

Initiatives include VAT exemptions for locally manufactured military goods, financial incentives, and the development of industrial sites.

GAMI also signed 53 industrial participation agreements valued at SAR 35 billion, of which SAR 13 billion is allocated for local procurement.

The authority is leveraging digital transformation to develop locally made products that meet military market demands.

The unified military industries platform integrates all services provided to stakeholders, automating processes and employing advanced technologies like artificial intelligence and data science.