GAMI Governor Eng. Ahmad Abdulaziz Al-Ohali Highlights Military Spending Growth At Global Defence Conference

Saudi Arabia's military spending has grown annually by 4.5% since 1960, reaching $75.8 billion in 2024. This makes it the fifth largest globally and the highest in the Arab world. The country's military expenses account for 3.1% of global military spending, which totals $2.44 trillion. Eng. Ahmad Abdulaziz Al-Ohali, Governor of the General Authority for Military Industries (GAMI), shared these insights at a conference in Antalya, Turkiye.

Al-Ohali highlighted that Saudi Arabia's 2025 budget allocates $78 billion to the military sector, representing 21% of government spending and 7.1% of GDP. The conference was organised by the Defence and Aerospace Industry Exporters' Association (SSI) and the Turkish Presidency of Defence Industries (SSB). It featured participation from CEOs and business development managers from major industrial and defense companies worldwide.

The localization rate of military industries in Saudi Arabia reached 19.35% by late 2023, aligning with Saudi Vision 2030's goals for a diversified economy driven by industry and innovation. This vision aims to reduce oil dependency, increase private sector contributions from 40% to 65%, and boost non-oil GDP from 16% to 50%. Al-Ohali emphasized the attractive investment environment in Saudi Arabia's military sector.

GAMI has established policies to support growth in this sector, including governance frameworks, export-import regulations, quality standards, intellectual property policies, data security measures, occupational safety guidelines, human capital development strategies, and industrial participation initiatives. These efforts create a supportive landscape for investors.

Financial incentives are available not only for major companies but also for small and medium-sized enterprises specializing in military industries locally and internationally. Al-Ohali urged stakeholders to seize these opportunities within Saudi Arabia's military industries sector.

GAMI collaborates with partners to empower government entities and companies within the military industries sector. This collaboration aims to enhance localization efforts, contributing significantly to Saudi Arabia's economic growth and prosperity.

Supply Chain Opportunities

A comprehensive study identified 74 supply chain opportunities within Saudi Arabia's military industries sector. GAMI classified these opportunities with public and private partners' help. Additionally, they identified 30 priority investment opportunities covering about 80% of future supply chain spending.

GAMI works closely with government agencies to develop incentive packages for investors in this sector. These include framework agreements and financial support incentives like zero value-added tax, supporting localization efforts.

The ongoing initiatives by GAMI aim to create a fertile environment for investment in Saudi military industries through partnerships with industry stakeholders. These efforts are crucial for enhancing the growth of this vital sector within the Kingdom.

With inputs from SPA