Saudi Arabia Announces $523 M Industrial Incentives to Drive Local Production
Saudi Arabia has rolled out a major industrial incentives program worth SR2 billion, approximately $523 million, aimed at ramping up local manufacturing and cutting back on imports. The move forms part of a wider plan consistent with Saudi Vision 2030, which aims at diversifying the national economy away from oil.
The government under the program offers financial incentives that can cover up to 35 percent of the initial investment of a project, with a maximum limit of SR50 million for each eligible project. The perks extend to the whole range of sectors, from the production of chemicals and automotive industry to the manufacturing of machinery and equipment.
At the event marking the signing of the initial batch of beneficiary projects, the Minister of Industry and Mineral Resources said the program aims at creating new value-added industries, increasing local content, facilitating import substitution and stimulating non-oil exports. Ultimately, the initiative is about sustainability and Saudi manufacturing becoming more competitive.
The program would be more than just a financial support measure. It acts as a welcome sign: Saudi Arabia is ready for industrial investment. The intention is to lure local and foreign firms, as well as foster partnerships, to develop high-tech, value-added manufacturing capacity.
Should this effort bear fruit, it might have the effect of changing the kingdom’s economic landscape, the introduction of new industries, the creation of jobs, the expansion of exports and the reduction of the reliance on oil revenues. Hence, more stable and diversified growth could result, lasting well into the future.
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