GAMI reports increases in licensing as localisation remains sluggish

Saudi Arabia's General Authority for Military Industries (GAMI) revealed in its first half 2021 report on 13 July that 99 companies had received licences to operate in the Kingdom's military sector by the end of the period, as localisation rates reached 8% of procurement by the end of 2020.

Of the 99 companies, 29 had been issued with licences since the end of 2020. Overall, 85% of the 99 companies are Saudi-owned, 9% have mixed foreign and local ownership, and 6% and foreign-owned. Saudi Arabia liberalised foreign ownership in the defence sector in 2020 as part of an effort to attract foreign investment, as the government seeks to become a major regional hub for defence and manufacturing outputs.

In total, 60% of the 99 companies are undertaking military equipment manufacturing, while 24% are for services and support, and 16% are for trading in military articles.

GAMI has reported that 99 companies have received licences to operate in the military sector, as localisation rates hit 8%. (Getty Images)

The report also outlined elements of the country's National Military Industries Sector Strategy, which is underpinned by three pillars: acquisition, industry, and research and technology. These pillars, according to the report, serve five strategic priorities: strategic autonomy; military readiness; a sustainable local defence industry; interoperability within and across entities; and transparency and efficiency of defence spending.

“While each pillar has its own fundamental purpose, all serve the same end goal: developing the necessary ecosystem to create cost efficiency, promoting localization, developing the necessary human capital, and encouraging productive research and technology work to promote innovation and sustainability,” GAMI Governor His Excellency Ahmad Al-Ohali said in the foreword to the report.