RIYADH — Investments in the Saudi industrial sector jumped 54 percent, hitting SR 1.5 trillion this year from SR 992 billion in 2019, thanks to the state’s waiver of fees for expatriate workers in the industrial sector. This was revealed in the report released by the economic-affairs department at the Federation of Saudi Chambers.

The analytical report addresses the impact of the waiver of fees for expatriate workers in the industrial sector, an initiative introduced in 2019 and running until the end of 2025, under a recent extension decision.

The report showcases the achievements of the industrial sector from 2019 to 2024 based on seven key indicators, including gross domestic product (GDP) contribution, the number of industrial establishments, investment volume, employment, non-oil exports, product quality, and foreign investment in industry.

Key findings from the report indicate that the decision to waive expat fees had a positive impact on the industrial sector and national economy. According to the report, the industrial sector's GDP contribution stood at 14.7 percent in 2023, rising to SR 592 billion from SR 392 billion in 2019. Additionally, the number of industrial establishments increased by 55.6 percent from 7,625 in 2019 to 11,868 establishments in 2024. The report also indicated growth of foreign investments in the industrial sector thanks to the government support, including the fee waiver as well as local content regulations and preference list.

The report spotlights an increase in the number of foreign factories by 71.5 percent, reaching 1,067 this year from 662 in 2019. Meanwhile, foreign capital investments in the sector grew by 116.2 percent to SR 93 billion, up from SR 43 billion. By the end of the first quarter of 2024, the number of industrial workers reached 1.2 million, including 358,000 Saudis, said the report, noting that industry localization also reached 28 percent. Saudis working in the industrial sector represented 12.9 percent of the total Saudi private-sector workforce.

The report highlighted the role of various government incentives in boosting localization in the private sector and creating more industrial job opportunities for Saudis. From January 1, 2023 to March 31, 2024, industry became the largest creator of jobs for Saudis, providing over 82,000 jobs and contributing 59 percent of the jobs created by the private sector.

The industrial sector also contributed to a 12 percent increase in non-oil exports, reaching SR 208 billion in 2023, compared to SR187 million in 2019. The gain was driven by market expansion for Saudi products and the signing of many trade agreements. Meanwhile, local content in non-oil sectors reached SR 1,138 billion in 2023. The fee waivers have positively impacted the quality of national products through the adoption of modern technologies by industrial establishments, the localization of best cutting-edge innovations, attraction of competent individuals, and the increase of products to meet local market demand.

The increase in quality fueled domestic demand for local products and Saudi Quality Mark certifications from the Saudi Standards, Metrology and Quality Organization (SASO), while boosting industrial product exports. Overall, the state’s waiver on fees for expatriate workers in the industrial sector has benefited more than 8,000 establishments at an estimated cost of around SR 5 billion, the report pointed out

© Copyright 2022 The Saudi Gazette. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).