Saudi Arabia’s Defense Localization Strategy: GAMI Honors Excellence and Charts Path to 2030
Saudi Arabia’s defense sector reached a major milestone in 2024, with military spending localization hitting 24.89%—nearly a quarter of all defense expenditures now supporting local industry. This represents remarkable progress from just 4% in 2018 and 19.35% at the end of 2023, showing significant acceleration in recent years.
The achievement was celebrated at GAMI’s first annual meeting for the military industries sector in Riyadh, where leaders outlined an ambitious vision for self-sufficient defense manufacturing.
The Numbers Tell a Compelling Story
The localization figures represent substantial economic impact:
- Local content share: Rose from 38.39% in 2023 to 40.74% in 2024
- Gross output: SAR 6.67 billion generated by the defense sector
- GDP contribution: 0.143% of Saudi Arabia’s total GDP
- Employment impact: SAR 4.26 billion in total employment generated (0.423% contribution)
- Total military spending: $75.8 billion in 2024, with $78 billion budgeted for 2025
With Saudi Arabia representing 3.1% of global defense spending, the Kingdom’s commitment to localization creates significant opportunities for companies positioned to participate in this growth.
Industrial Infrastructure Transforms Rapidly
The expansion of Saudi Arabia’s defense industrial base has been dramatic:
- Licensed facilities: Grew from just 5 facilities in 2019 to 296 facilities by Q3 2024
- Industrial participation agreements: 53 agreements signed worth $9.3 billion, with $3.4 billion allocated to domestic companies
- Technology platform: Unified AI-powered platform launched to automate services and forecast demand for military products
- Training capacity: National Academy for Military Industries now trains 2,000 students annually
These projects span diverse capabilities including UAVs, rapid interceptor boats, and defense system maintenance—demonstrating the breadth of opportunities across the sector.
Leadership Commitment Drives Progress
Speaking at the event, GAMI Governor Ahmed bin Abdulaziz Al-Ohali credited the progress to the support of King Salman and Crown Prince Mohammed bin Salman, who chairs GAMI’s board.
“We strive to build a sustainable local industry that will generate significant strategic, developmental, and economic benefits for the nation and its citizens,” Al-Ohali said. He emphasized that GAMI has introduced comprehensive policies, legislation, and incentives to attract investment and create a competitive business environment.
The governor also revealed that GAMI is updating the national military industries strategy, with the new version set for completion and adoption during 2025 to align with Vision 2030 goals.
More Than Just Numbers
Mohammed bin Saleh Al-Adhl, GAMI’s deputy governor for localization, stressed that the 24.89% figure represents more than a statistic—it’s a national commitment to building defense industries capable of meeting the Kingdom’s own needs.
“This marks a qualitative leap, driven by clear vision, strategic planning, and substantial investment in industrial infrastructure,” Al-Adhl explained.
To ensure accuracy and credibility, GAMI implements rigorous verification procedures:
- Contract audits by dedicated working groups
- Budget reviews and detailed analysis
- External verification by independent accountants and auditors
- Quality evaluation of all measurement procedures
This transparent approach ensures that localization figures reflect genuine industrial capacity, not just accounting adjustments.
Recognizing Excellence Across the Sector
GAMI honored government entities and companies excelling in defense localization across several categories:
Military and Security Entities – Planning Excellence:
- Ministry of Interior
- Presidency of State Security
- General Intelligence Presidency
Military and Security Entities – Implementation Excellence:
- Ministry of Defense
- Ministry of Interior
- Ministry of National Guard
- Presidency of the Royal Guard
Company Awards by Category:
Manufacturers:
- SAMI Advanced Electronics Co.
- National Mechanical Systems Co.
- Military Clothing and Equipment Factory
Service Providers:
- BAE Systems Arabia for Industry
- Saudi Aircraft Preparation and Maintenance Co.
- SAMI Al Salam Aerospace Industries
Small and Medium Enterprises:
- SAMI Aerospace and Space Mechanical Co.
- Saudi Leather Industries Co.
- Eraf Industrial Co. Ltd.
These awards highlight the breadth of localization—from large manufacturers to nimble SMEs—showing that opportunities exist across the industry spectrum.
Strategic Supply Chain Opportunities
GAMI has identified concrete opportunities for companies looking to participate in Saudi Arabia’s defense localization:
- 74 supply chain opportunities have been created across the defense sector
- 30 priority opportunities identified, representing 80% of future defense expenditures
- Focus areas include advanced manufacturing, maintenance and support services, and technology integration
This targeted approach helps international companies understand where their capabilities align with Saudi Arabia’s strategic needs.
Innovation as the Foundation
Faleh bin Abdullah Al-Sulaiman, governor of the General Authority for Defense Development, emphasized research and innovation as fundamental to transforming Saudi Arabia from a consumer to a manufacturer of defense systems.
“Research and development serve as key drivers for sustaining industries, ensuring that national products keep pace with global advancements,” Al-Sulaiman noted. This focus on R&D ensures long-term competitiveness, not just short-term production gains.
Private Sector Partnership
Salman bin Nasser Al-Shathri, chairman of the National Committee for Military Industries at the Federation of Saudi Chambers, praised the collaboration between GAMI and the business community.
Joint workshops and coordination meetings have created platforms for sharing success stories, reviewing regulations, and exchanging ideas between public and private sectors.
Al-Shathri highlighted the pivotal role of local supply chains in creating investment opportunities for entrepreneurs and SMEs, supported by government incentives and clear growth prospects in one of the Kingdom’s most strategic sectors.
Building the Industrial Ecosystem
The meeting featured presentations from several key officials:
- Ibrahim bin Abdulqader Al-Abu Issa (Deputy Governor, High Commission for Industrial Security) outlined support mechanisms for the military industries sector
- Saleh bin Abdullah Al-Aqili (Deputy Governor for Enabling Sector, GAMI) detailed efforts to develop policies and foster partnerships
- Thamer bin Mohammed Al-Muhaid (CEO, Saudi Arabian Military Industries) discussed how major companies are developing local supply chains
Investing in People
GAMI concluded the meeting by honoring graduates of its scholarship and secondment program. The initiative develops national talent and prepares young Saudi professionals to work in the defense industry, ensuring the sector has skilled personnel for long-term growth.
With the National Academy for Military Industries now training 2,000 students annually, the Kingdom is building the human capital foundation necessary to sustain rapid industry expansion.
This investment demonstrates that localization isn’t just about factories and contracts—it’s about building expertise that will sustain the industry for generations.
A Strategic Sector on the Rise
The annual meeting brought together high-ranking officials, heads of local and international defense companies, and investors. The gathering showcased Saudi Arabia’s serious commitment to building a comprehensive defense industrial base that supports Vision 2030’s economic diversification goals.
With annual military spending growth of 4.5% since 1960 and a clear trajectory from 4% localization in 2018 to nearly 25% today, the momentum is undeniable. The Kingdom is well-positioned to exceed its 50% localization goal by 2030.
