Saudi Arabia’s localization plan is reshaping consultancy sector - and more beyond

The Kingdom has pioneered telemedicine and e-health services, enabling virtual consultations and remote surgeries to reach the farthest communities. (SPA)
The Kingdom has pioneered telemedicine and e-health services, enabling virtual consultations and remote surgeries to reach the farthest communities. (SPA)
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Updated 19 May 2024
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Saudi Arabia’s localization plan is reshaping consultancy sector - and more beyond

Saudi Arabia’s localization plan is reshaping consultancy sector - and more beyond
  • Plan a huge opportunity for Saudi Arabia to boost local jobs and reduce its reliance on foreign workers

RIYADH: As Saudi Arabia embarks on a journey aimed at boosting job opportunities for citizens, the localization plan for consultancy professions and businesses plays a crucial role.

In October 2022, the Kingdom’s Ministry of Human Resources and Social Development issued a decision mandating that from the end of March 2024, 40 percent of workers in firms in this sector must be Saudi nationals.

The decision targeted all professions in the sector, most notably financial advisory specialists, business advisers, and cybersecurity advisory specialists, as well as project management managers, engineers, and specialists.

This targeted localization, or Saudization, is part of the cooperation between the Ministry of Human Resources and Social Development and supervising bodies, represented by the Ministry of Finance, the Local Content and Government Procurement Authority, the Expenditure and Project Efficiency Authority, and the Human Resources Development Fund.   

The collaboration aims to elevate the presence of cadres in the sector and boost the percentage of Saudis, contributing to the development of local content in this strategic sector. It also seeks to organize the labor market.

The ministry is meant to support private sector establishments in several ways, including helping them in hiring Saudis by supporting the training and qualification of employees, as well as supporting employment procedures and other initiatives.  

On a similar note, the Local Content and Government Procurement Authority is required to follow up on the commitment to include Saudization requirements in consulting contracts.

It has also issued a guide that clarifies the details of localizing the consultancy sector and professions, and the mechanism of implementing it.  

Reshaping the consultancy sector     

Azeem Zainulbhai, co-founder and chief product officer at talent-on-demand platform Outsized, believes the Saudization rules in the sector will help keep more money in the Kingdom, even though training costs could increase.

“This move means less reliance on experts from abroad in key fields like finance, project management and cybersecurity. Essentially, it’s about creating more jobs for Saudis in important, well-paying sectors and making sure they're trained for these roles,” he told Arab News.

“The end objective is to get better at handling projects and business dealings that are specific to Saudi culture and regulations, stimulate private sector growth, and foster a knowledge-based economy ultimately making companies more efficient and competitive globally,” the co-founder emphasized.

Bashar El-Jawhari, consulting partner at PwC Middle East, also stated that the localization plan initiated by Saudi Arabia marks a significant milestone in reshaping the consulting sector within the Kingdom.  




Azeem Zainulbha, Co-founder and chief product officer at Outsized

“With the launch of the second phase, we anticipate several key transformations that will contribute to the development and empowerment of local talent,” El-Jawhari told Arab News.

“Firstly, as young Saudi professionals enter the workforce, we expect a notable increase in demand for consulting services related to project and transformation management, financial and legal advisory, as well as procurement and supply chain management,” he added.

By having more Saudis in consulting, businesses can better navigate local market dynamics and regulations.

Azeem Zainulbha, Co-founder and chief product officer at Outsized

The consulting partner went on to note that the influx of senior Saudi talent into the consulting industry presents an opportunity for firms to leverage their experience and insights to drive business growth.

Sectors to be affected  

The localization push of course expands beyond the consultancy sector, Zainulbhai noted.

“Tourism and hospitality can really use local insights to attract more visitors and celebrate Saudi culture. Major construction and engineering projects, like the NEOM and the Red Sea Project, will also benefit from having local experts who understand the specific requirements and standards needed,” he said.

The Outsized executive also shed light on the fact that the healthcare, IT, cybersecurity, and renewable energy sectors are all set to improve with more local consultants who bring a deep understanding of regional needs and regulations.

“Local financial experts will be key in adapting to Saudi Arabia’s unique market, especially as it continues to grow and change,” Zainulbhai commented.

Overall, sectors essential to the diversification from oil will see substantial growth and development from this localization.  

“When looking at various sectors, certain areas are poised to benefit more prominently than others. For example, the government and public sectors are likely the first to benefit in light of the transformation journey towards Vision 2030,” El-Jawhari affirmed.

The consulting partner explained that as Saudi Arabia continues its journey toward achieving the ambitious goals outlined in Vision 2030, there is a growing emphasis on enhancing the efficiency and effectiveness of government operations.

“Consulting services play a vital role in supporting this transformation by providing strategic guidance and expertise in areas such as organizational restructuring, process optimization, and performance management,” El-Jawhari commented.

He added: “Furthermore, nationals equipped with experience in operational excellence are well-positioned to contribute to these efforts by implementing measures aimed at optimizing operational processes, reducing costs, and enhancing productivity.”

Potential opportunities

The plan is a huge opportunity for Saudi Arabia to boost local jobs and reduce its reliance on foreign workers, which aligns perfectly with the broader Vision 2030 goals.

“By having more Saudis in consulting, businesses can better navigate local market dynamics and regulations,” added Zainulbhai.

He continued to underscore that local consultants can offer insights that make companies more competitive, especially in sectors where understanding local consumer behavior is crucial.

He also clarified that businesses that follow these new hiring rules may find it easier to onboard government clients.

“The focus on local talent is also great for fostering innovation and could help companies set up successful programs to nurture new ideas in fields like digital tech and sustainability,” Zainulbhai explained.

From El-Jawhari’s point of view, the localization plan presents opportunities for Saudi nationals to enter the consulting profession, contributing to the development of a vibrant knowledge-based economy.

Potential challenges  

While there are many benefits, the plan also brings several challenges. According to Zainulbhai, those include filling talent gaps, adjusting to cultural shifts, and meeting new regulatory standards.

“To tackle these, businesses could set up mentorship programs where seasoned international consultants train up-and-coming Saudi professionals. Setting up special training centers to quickly upskill workers could also help,” the co-founder described.




Bashar El-Jawhari, Consulting partner at PwC Middle East

“There might be some resistance to these changes within companies, so promoting a culture that values diverse perspectives will be important,” he added.

Zainulbhai also believes that consulting with local legal experts will be crucial to stay on top of new regulations.

We anticipate several key transformations that will contribute to the development and empowerment of local talent.

Bashar El-Jawhari, Consulting partner at PwC Middle East

“Although initial costs might be high, businesses can look into government subsidies or focus on tech solutions to reduce long-term expenses and increase efficiency,” he said.

From PwC’s perspective, El-Jawhari said that the availability of fresh, well-educated Saudi graduates provides consulting firms access to junior talent.

“The challenge lies in retaining them beyond the first 4 to 5 years. Government and semi-government entities begin to recruit these nationals, who have gained experience in international consulting firms, to join their workforce,” he stressed.

The consulting partner went on to explain that another challenge is attracting mid-career Saudi consultants who are in high demand and short supply.

“The third challenge is distinct specialties. For example, with the strong drive toward diversifying the economy, there is a need for consulting experience across sectors such as industrial, defense, tourism and culture, sports, and entertainment, supported by international experience,” El-Jawhari revealed.

He further disclosed: “Overall, finding Saudi talent in relatively new sectors of the economy is quite challenging.”

“To expand the pool of mid-career Saudis, a program between government entities and consulting firms could be established. The program could include seconding talented mid-career Saudis into consulting firms for 1 to 2 years,” El-Jawhari clarified.

He wrapped up with this regard saying that this gives consulting firms access to mid-career Saudi talent and in return, government entities gain a mid-career professional equipped with consulting experience.

Vision 2030 implications  

Undoubtedly, this plan provides a key piece of the bigger Vision 2030 puzzle, which aims to diversify the economy beyond oil and boost public services like health and education.

“By increasing Saudi involvement in consulting, the plan helps keep more money in the country and creates high-value jobs that are crucial for modernizing the economy,” Zainulbhai said.

The co-founder also mentioned that it also focuses on upgrading the skills of the Saudi workforce, which is essential for innovation and sustained economic growth.

“More local consultants mean the private sector can grow stronger and more independent, making Saudi Arabia a more appealing place for investors and helping develop key sectors,” he concluded.

On the other side, El-Jawhari shed light on how two key outcomes of Vision 2030 are a thriving economy and a vibrant society.

“Pushing for a higher level of consulting localization will create higher-paid jobs for Saudi nationals, resulting in a more vibrant society that enjoys a higher quality of life,” the consulting partner reiterated.

“Additionally, local talent can provide the necessary expertise in specific consulting services to catalyze economic diversification,” he concluded.

 


Saudi Arabia set to welcome 300 millionaires in 2024: Henley & Partners

Saudi Arabia set to welcome 300 millionaires in 2024: Henley & Partners
Updated 19 June 2024
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Saudi Arabia set to welcome 300 millionaires in 2024: Henley & Partners

Saudi Arabia set to welcome 300 millionaires in 2024: Henley & Partners

RIYADH: As many as 300 millionaires will flock to Saudi Arabia in 2024 as the Kingdom continues to attract high-net-worth individuals, according to a study. 

In its latest report, Henley & Partners said that Saudi Arabia’s capital Riyadh as well as Jeddah are becoming “increasingly popular” with immigrant millionaires,especially from North Africa and the Middle East. 

“In our view, these two cities have the potential to mimic Dubai and Abu Dhabi in attracting large numbers of wealthy expats in the future,” said the British consultancy firm in the release. 

According to the analysis, the UAE is continuing its run as the top destination of choice for HNWI, with an estimated 6,700 millionaires expected to make the country their home by the end of 2024.

“For the third year running, the UAE looks set to take first place as the world’s leading wealth magnet, with a record-breaking 6,700 moneyed migrants expected to make the Emirates home by the end of the year, significantly boosted by large inflows from the UK and Europe,” said the British consultancy. 

According to the report, the UAE’s tax-free income, golden visa residency program, and geographic location have made it a favorite destination for migrating millionaires. 

The Group Head of Private Clients at Henley & Partners, Dominic Volek, said that 2024 is shaping up to be a watershed moment in the global migration of wealth. 

“An unprecedented 128,000 millionaires are expected to relocate worldwide this year, eclipsing the previous record of 120,000 set in 2023. As the world grapples with a perfect storm of geopolitical tensions, economic uncertainty, and social upheaval, millionaires are voting with their feet in record numbers,” said Volek. 

He added: “In many respects, this great millionaire migration is a leading indicator, signaling a profound shift in the global landscape and the tectonic plates of wealth and power, with far-reaching implications for the future trajectory of the nations they leave behind or those which they make their new home.” 

The UAE is followed by the US and Singapore, with 3,800 and 3,500 millionaires set to live in these countries by the end of this year. 

Canada grabbed fourth place in the list, with a projected 3,200 HNWI flocking to the country, followed by Australia and Italy with 2,500 and 2,200 millionaires coming to these nations, respectively. 

Switzerland came in the sixth spot in the list, with an estimated 1,500 millionaires relocating to the country, followed by Greece and Portugal at 1,200 and 800, respectively. 

The report highlighted that the UK is expected to see an unprecedented net loss of 9,500 millionaires in 2024 — second only to China worldwide and more than double the 4,200 who left the country last year. 

According to the analysis, China is expected to be the biggest millionaire loser globally, with an anticipated net exit of 15,200 HNWIs this year, compared to 13,800 in 2023.


Egypt’s exports surge 9.8% to $16.55bn amid global trade expansion

Egypt’s exports surge 9.8% to $16.55bn amid global trade expansion
Updated 19 June 2024
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Egypt’s exports surge 9.8% to $16.55bn amid global trade expansion

Egypt’s exports surge 9.8% to $16.55bn amid global trade expansion

RIYADH: Egypt’s merchandise exports soared by 9.8 percent year-on-year in the first five months of 2024 to reach $16.55 billion, according to a top official.     

Exports increased every month over the period, underscoring the north African country’s ongoing expansion in global trade, according to Egypt’s Minister of Trade and Industry Ahmed Samir.   

Notable items that contributed to the growth included fresh and dried citrus fruits valued at $721 million, wires at $353 million, and manufactured petroleum oils at $186 million.      

Key export sectors also included building materials, valued at $3.86 billion, the food industry at $2.64 billion, and chemical products and fertilizers estimated at $2.49 billion.   

Agricultural crops were worth $2.26 billion, according to a statement.   

The ministry aims to bolster exports across all sectors to diverse global markets in the coming phase, emphasizing collaboration between government entities, business communities, and Egyptian exporters to enhance product quality and competitiveness. 

This effort supports Egypt’s target of achieving $100 billion in annual merchandise exports.   

Moreover, the statement revealed that Saudi Arabia emerged as the top market for Egyptian merchandise exports during this period, totaling $1.39 billion. 

Following Saudi Arabia, Turkiye accounted for $1.31 billion, the UAE at $1.13 billion, Italy with $974 million, and the US at $904 million.   

In May, Egypt’s Central Agency for Public Mobilization and Statistics revealed that the value of Egyptian exports to Arab countries surged 8.7 percent year-on-year, reaching $13.6 billion in 2023. 

Saudi Arabia led among Arab nations in importing from Egypt, with exports totaling $2.7 billion during the year, according to the statement issued last month. 

This trend underscores the substantial growth in trade relations, partnerships, joint projects, and development investments between the two countries in recent years.     

Last month, the International Monetary Fund projected that Egypt’s foreign cash inflows would come from five sources, including commodity exports, tourism and Suez Canal revenues, as well as private transfers and net foreign direct investment.      

The fiscal year 2023-2024 total will be around $107.3 billion, compared to about $93.6 billion in 2022-2023.      

However, the IMF anticipates inflows to decrease again in the next fiscal year, dropping below the previous year’s level to approximately $91.2 billion. 


King Abdulaziz Port boosts infrastructure with new cranes, enhancing global maritime hub status

King Abdulaziz Port boosts infrastructure with new cranes, enhancing global maritime hub status
Updated 19 June 2024
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King Abdulaziz Port boosts infrastructure with new cranes, enhancing global maritime hub status

King Abdulaziz Port boosts infrastructure with new cranes, enhancing global maritime hub status

RIYADH: Saudi Arabia’s King Abdulaziz Port’s crane capacity has been boosted by 9.7 percent as part of an SR7 billion ($1.86 billion) investment deal.

The facility, operated by Saudi Global Ports Co., has received three automated quay and three rubber-tired gantry cranes, increasing its handling infrastructure.

According to a press release from Saudi Ports Authority, also known as Mawani, this addition brings the total number of quay cranes to 18 and gantry cranes to 50, enhancing the Dammam port’s workflow and enabling it to handle large ships efficiently.

These enhancements are made under commercial contracts between Mawani and Saudi Global Ports Co. 

This development is part of ongoing efforts to strengthen King Abdulaziz Port’s position as a competitive and sustainable global hub.

The new cranes can reach a minimum of 25 rows, which facilitates the efficient handling of advanced and large ships. 

Additionally, the use of modern cranes contributes to improving the skills of the workforce, supporting the Saudi ports system and solidifying the Kingdom’s growing role in the global logistics chain.

This upgrade aligns with the goals of the National Transport and Logistics Strategy, which aims to establish the nation as a global logistics center and a key link between continents.

Saudi ports are experiencing a constant surge in handling shipments. In March, terminals in the Kingdom recorded a 12.48 percent increase in the number of received containers compared to the same period last year, according to official data from Mawani.

The Authority disclosed that terminals in Saudi Arabia received 265,148 standard containers in the third month of 2024, marking an annual increase from 235,738.  

Furthermore, the maritime facilities experienced a 3.77 percent uptick in the volume of handled tonnage, reaching 19.64 million tonnes, in contrast to 18.93 million tonnes recorded in March 2023.    

“This reflects the scale of efforts made to develop port infrastructure and provide the highest levels of logistics services,” Mawani stated in a statement.

The Kingdom’s general shipment volumes reached 804,837 tonnes, solid bulk cargo reached 3.94 million tonnes, and liquid bulk freight reached 14.74 million tonnes.

A report from the UN Conference on Trade and Development revealed that Mawani climbed from 76.16 points in the second quarter of 2023 to 77.66 points in the third quarter of last year, affirming Saudi Arabia’s progress in the maritime sector.

Moreover, the Kingdom has consistently pursued global collaborations in the maritime sector, the latest of which occurred at the second edition of Vision Golfe 2024, held in Paris on June 4.

At the event, Mawani signed an agreement with the French Ministry of Economy, Finance, and Industrial and Digital Sovereignty and its Marseille counterpart as part of France and Saudi Arabia’s commitment to excellence in trade and maritime transport.


Riyadh among top 5 MENA startup ecosystems, report states

Riyadh among top 5 MENA startup ecosystems, report states
Updated 19 June 2024
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Riyadh among top 5 MENA startup ecosystems, report states

Riyadh among top 5 MENA startup ecosystems, report states

RIYADH: Saudi Arabia’s capital Riyadh is among the top five startup ecosystems in the Middle East and North Africa region, according to new data. 

The international policy advisory and research organization Startup Genome, in collaboration with the Global Entrepreneurship Network, revealed that three of the Kingdom’s cities were among the top-ranked startup ecosystems in the region. 

Riyadh was ranked fourth, with Jeddah and Alkhobar also making the list, according to Startup Genome’s latest Global Startup Ecosystem report. 

The criteria for inclusion in the list required ecosystems to be ranked in the top 40 global leaders or top 200 emerging environments or to have a value greater than $200 million. 

Furthermore, Riyadh was also one of two MENA ecosystems making the global list of cities with four or more unicorns in the last 10 years, the other being Dubai. 

A company is termed a unicorn when it reaches a valuation of $1 billion without being listed on the stock market. 

The report highlighted that the capital was ranked between 51 and 60 internationally, with its funding performance ranking seven out of 10. 

The Kingdom was also praised for its proactive approach to embracing artificial intelligence, with the report highlighting the nation’s $40 billion commitment to boosting the technology. 

The UAE’s capital, Abu Dhabi, was ranked as the fastest-growing startup ecosystem in the region, with a global rank between 61 and 70. 

“In a nation emboldened by its strategic vision to become a dominant global technology hub, the UAE is establishing its capital city as one of the world’s most prominent destinations for high-growth technology companies,” the report stated. 

Abu Dhabi’s ecosystem was valued at $4.2 billion, with one unicorn between 2021 and 2023. The city also saw a median funding of $825,000 in seed rounds. Total venture capital funding amounted to $1.1 billion between 2019 and 2023, with 16 exits during the same period. 

The region has seen significant growth in venture capital and startup development in recent years, mostly driven by Saudi Arabia. 

In 2023, the Kingdom secured 52 percent of the total VC funding in the MENA region, a substantial increase from the 31 percent share it held in 2022. 

Saudi Arabia’s startup ecosystem ranked first in regional venture funding activities in 2023, amassing an unprecedented $1.38 billion in capital.  

This achievement positioned the Kingdom at the forefront of venture capital funding in the Middle East and North Africa, surpassing the $1 billion mark for the first time, as reported by MAGNiTT in their Saudi Arabia FY2023 report. 


Half of Saudi Arabia’s World Defense Show 2026 floorspace already snapped up by exhibitors

Half of Saudi Arabia’s World Defense Show 2026 floorspace already snapped up by exhibitors
Updated 19 June 2024
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Half of Saudi Arabia’s World Defense Show 2026 floorspace already snapped up by exhibitors

Half of Saudi Arabia’s World Defense Show 2026 floorspace already snapped up by exhibitors

RIYADH: International exhibitors have already secured half of the space at the World Defense Show set to be held in Riyadh in 2026, demonstrating strong early interest in the biennial event.  

The defense and security exhibition, scheduled for Feb 8-12 and covering an area of 800,000 sq. m., follows the successful conclusion of its second edition in February. 

The event attracted a record number of 773 exhibitors, all aiming to capitalize on the Kingdom’s status as one of the largest defense spenders worldwide.   

In the state budget announced in December 2023, Saudi Arabia allocated SR269 billion ($71.70 billion) for the military sector this year, reflecting an 8.5 percent increase from the 2023 estimates.    

Andrew Pearcey, CEO of the World Defense Show, said: “The demand has been phenomenal. Just four months after the second edition of the show closed, to global industry approbation, we have already sold 50 percent of the floorspace for the third edition.”    

He added: “Many of the industry’s leading multi-domain businesses booked their stands for 2026 during the 2024 event. I am in no doubt that World Defense Show 2026, will be an essential event for global companies across the defense supply chain.”   

The CEO highlighted that the third edition of the event further solidifies the entity’s position as the emerging global hub for the defense industry.   

The early bookings for the event are in line with the show’s vision to serve as a platform where the global defense industry can convene, connect, and gain valuable insights into the latest innovation-driven defense and security solutions.   

The event also aims to foster integration across air, land, sea, space, and security domains to accelerate advancements in defense technologies.  

“We have grown each year, in the size of our event, in the number of exhibitors and visitors, but also in the depth and breadth of expertise and influence of those taking part in our panels, presentations and discussions,” Pearcey said. 

“Our impact is effected in two ways, as a gateway to partnership and collaboration with the Saudi Arabian defense industry, but more importantly as a truly global networking and policymaking event, welcoming senior delegations from around the world to meet representatives of the international defense industry in a confidential and impartial setting,” he underlined. 

The World Defense Show team are attending Eurosatory 2024, held from June 17 to June 21 at the Paris Nord Villepinte Exhibition Centre. This event will allow potential exhibitors to learn more about the 2026 initiative and book their space while it is still available.  

The World Defense Show 2026 will see the return of many of the event’s networking features, including the “Meet the KSA Government” program, which shares the latest developments on the Kingdom’s business guidelines, investment requirements as well as partnership processes.

Held at the heart of the global supply chain, the show will bring together the most prominent players and start-up visionaries from the defense domain to collectively craft the sector’s future.