UAE In-Country Value scheme spending hits $18bn
ABU DHABI, February 8, 2024
UAE’s National In-Country Value (ICV) Programme, which heralds a new phase of the country's industrial development, has seen a significant spending increase on local products and services with expenditure reaching AED67 billion ($18.23 billion), a 26% increase.
The spending was AED53 billion in 2022. This is a 25% increase compared to 2021. Investments by the UAE’s ICV-certified suppliers exceeded AED200 billion in 2023.
Meanwhile, the Ministry of Industry and Advanced Technology (MoIAT) has adopted a new logo for the National In-Country Value (ICV) Program. Since its launch as part of the Projects of the 50, the ICV Program has achieved several milestones that have contributed to the UAE’s industrial development, attracting local and foreign investments, as well as supporting the growth of the national economy.
Additionally, the program has encouraged Emirati entrepreneurs to establish themselves in the industrial sector and diverted government procurement to local businesses. All this has contributed to enhancing the competitiveness and sustainability of the UAE industrial sector.
Expanding the program to a federal level was a key step in its development. The feat was achieved through collaboration between MoIAT and strategic partners in both the public and private sectors. Today, the program represents a vital national initiative that promotes supply chain localization, drives the development of new local industries, supports GDP diversification, and provides quality employment opportunities for Emiratis in the private sector.
Omar Al Suwaidi, Undersecretary of the Ministry of Industry and Advanced Technology, says: “The ministry’s efforts are in line with leadership's directives and the UAE’s strategic vision to achieve a leap in national development through the Projects of the 50. Through projects such as the National ICV Program, we are enabling industrial players as well as investors in line with the National Strategy for Industry and Advanced Technology.
“The National ICV Program is one of the cornerstones supporting the UAE’s vision. It aims to build economic partnerships, support self-sufficiency in vital and priority sectors, empower national talent, and enable Emirati entrepreneurs under the Make it in the Emirates initiative. This initiative enhances the growth and competitiveness of the national industrial sector and rovides a supportive environment for the growth of SMEs, which benefit from procurement programs."
He adds: “The program has progressed quickly since its expansion to a federal level, with spending in the national economy increasing from AED26 billion in 2019 to AED67 billion in 2023. Product offtake opportunities have also grown to include 1,400 products, with an additional AED10 billion of opportunities launched in 2023, bringing the total value of product offtake opportunities to AED120 billion over the next 10 years. The program has already secured a remarkable AED31 billion of the total product offtake opportunities. The cumulative value of spending redirected to the national economy since the program's inception is AED237 billion, reflecting the scale of the program’s impact on the national economy.”
He also points to the increasing number of Emiratis employed in ICV-certified companies: “The National ICV Program has led to 15,768 UAE nationals being employed in National ICV-certified companies, marking an 80% increase compared to 2022. This increase aligns with the ministry's policies for upskilling Emirati talent and preparing them for the job market.”
Partnerships and agreements
Al Suwaidi highlights how, under the programme, local manufacturing agreements have played a pivotal role in attracting new industries to the UAE. He notes: “In 2023, major companies entered strategic agreements for local manufacturing. Examples include manufacturing agreements between Adnoc and companies such as Halliburton and Yokogawa to produce pipes, wellheads, advanced drilling tools and materials, as well as electric pumps, totaling over AED30 billion. Additionally, there was a purchase agreement worth AED600 million between PureHealth and Pharmax Pharmaceuticals for the manufacturing of Favipiravir.”
He continues: “Such agreements reflect the role and impact of the Make it in the Emirates initiative in enhancing national integration. PureHealth has collaborated with Abu Dhabi Medical Devices Company to establish a new factory, which supports self-sufficiency and strengthens local supply chains and medical security. This includes launching a production line for patented medical equipment and supplies at a cost of AED110 million. Additionally, PureHealth and Gulf Pharmaceutical Industries (Julphar) are launching the first factory in the Middle East to produce Glargine (a vital alternative to insulin) in Ras Al Khaimah, at a cost of AED150 million.”
Al Suwaidi emphasises the importance of other integrated agreements that provide incentives and enablers to drive success in the industrial sector. This includes the provision of raw materials for local factories through Borouge, a petrochemicals company. Additionally, competitive industrial lands are allocated through Abu Dhabi Ports, offering competitive prices. Competitive financing solutions are also provided to the industrial sector through the strategic partners including Emirates Development Bank. In 2023, First Abu Dhabi Bank and Mashreq Bank also provided financing, along with other supportive enablers, to enhance competitiveness and boost exports.
He adds: “Agreements were also signed for purchases totaling AED400 million between Etihad Airways and national industrial companies such as RAK Ceramics and Biz Ceramics & Textiles, in addition to purchase agreements worth AED70 million between Emirates Steel and the Emirates Lime Factory. Furthermore, Al Dar Company signed purchase agreements worth AED70 million with national industrial companies for the manufacturing of electrical transformers and more.
Rapid expansion
The number of entities joining the National ICV Programme has increased significantly, from five entities in 2020 to 28 entities in 2023. The programme's scope expanded to cover five emirates in 2023 compared to three in 2022. These include Abu Dhabi, Ras Al Khaimah, Ajman, Fujairah, and Umm Al Quwain. Additionally, eight new local and federal entities have joined, including the Ministry of Energy and Infrastructure, Ministry of Health and Prevention, Emirates Health Services Foundation, Emirates Schools Establishment, Government of Ajman, Government of Umm Al Quwain, Department of Health in Abu Dhabi, and Rafed. The number of companies obtaining ICV-certified companies on rose from 4,500 in 2022 to 6,100 in 2023, representing a 36% increase, with more than 7,000 certificates issued during 2023.
Economic diversification
To support a diverse range of economic sectors in the country, the National ICV Programme has introduced numerous opportunities across industry, services, retail, hospitality, and real estate since its launch. Additionally, MoIAT launched a new digital platform for the programme, enabling companies to obtain certificates digitally, saving them around 40% on time and costs.
Expanding the programme
The ministry continues to expand the programme to new sectors, including, but not limited to, clean energy, healthcare, defense industries, aviation, telecommunications, real estate, education, infrastructure, cybersecurity, iron, aluminum, among others. These efforts have played a significant role in accelerating the implementation of the programme at the national level.
New sectors were added to the programme following its success across others including heavy industries, space technology, hydrogen, medical technology, advanced manufacturing, food and beverages, agricultural technology, pharmaceuticals, electronic equipment, machinery and equipment manufacturing, petrochemicals, rubber and plastics.
The Industrialist Programme
Under the ICV, MoIAT launched the Industrialist Programme in collaboration with the Ministry of Human Resources and Emiratisation (MoHRE) and the Emirati Talent Competitiveness Council (Nafis). The initiative aims to enable Emirati talent and enhance localisation in the sector through the implementation of specific policies and programmes. It focuses on equipping and enabling the Emirati workforce to fill positions in the industrial and advanced technology sectors, aligning with the requirements of factories. This includes a training programme to upskill national talent, as well as providing access to specialised technical positions in the industrial sector.
Under the programme, the ministry, in collaboration with MoHRE, Nafis, Abu Dhabi Department of Economic Development, and Adnoc Group, organised the Industrialist Career Fair in November 2023. The event contributed to providing more than 500 jobs and training opportunities in over 73 factories across the country, and attracted more than 3,000 Emiratis seeking employment, with 4,000 on-spot interviews conducted.
Over 416 employment contracts were signed, and high-quality educational and training programmes were offered. Additionally, four training programmes were launched to upskill Emirati talent, covering industries such as oil and gas, security and safety, iron, paper, and F&B.
Technology incentives
The ministry announced an update to National ICV evaluation criteria in 2023. This update includes an additional bonus of up to 5% for companies assessed under the Industrial Technology Transformation Index (ITTI). ITTI is a flagship initiative aimed at encouraging companies to adopt advanced technologies and sustainable practices. By scoring highly in the ITTI, companies can gain a better ICV score, incentivising more technology adoption and more sustainable practices.
Lower fees for SMEs
The ministry announced in June 2023, in collaboration with the Ministry of Economy, the introduction of a new pricing scheme for National ICV-certified SMEs as a new incentive for companies registered in the National Programme for Small and Medium Enterprises. Through this initiative, the ministry aims to support smaller companies to compete and access government procurement.
Upskilling local talent
To help Emiratis thrive in the private sector, the ministry collaborated with Nafis to launch a training programme for UAe nationals employed in ICV-certifying bodies. The initiative is aimed at enhancing their technical, digital, and specialised skills in auditing data related to the programme's certificate, under Nafis’ ‘Khebra’ programme.
The programme provided Emiratis with three-month training opportunities at ICV-certifying bodies, targeting individuals with a bachelor's degree. It focused on procedures for awarding the certificate, particularly in the field of financial auditing.
Green ICV
During the second edition of the Make it in the Emirates Forum, the ministry announced the adoption of Green ICV as a new standard within the National ICV Programme. The move is aimed at enhancing sustainability practices in government procurement and incentivising companies to reduce emissions.
The Green ICV standard provides companies with the opportunity to earn additional points in the National ICV formula when they commit to implementing sustainability standards, green policies, and practices. Companies can gain an additional 3% on their ICV score based on their practices in sustainability, water management, emissions management, recycling and efficiency.
In 2024, the National ICV Programme continues its journey, integrating with other key initiatives and programmes launched by the ministry such as Make it in the Emirates and the Technology Transformation Programme. As the programme continues boosting the growth and competitiveness of national companies, as well as supply chain resilience, ICV will continue driving the national economy and jobs over the next decade.--TradeArabia News Service
