Saudi Arabia’s NIDLP: A Catalyst for Economic Transformation
As Saudi Arabia advances towards its ambitious Vision 2030 objectives, the National Industrial Development and Logistics Program (NIDLP) stands out as a pivotal force driving the nation’s economic diversification. Recent reports indicate that NIDLP contributed an impressive SR986 billion ($262.8 billion) to the Kingdom’s non-oil gross domestic product (GDP) in 2024, which accounted for a significant 39% of the total. This figure not only marks a noteworthy increase from SR949 billion the previous year but also highlights the program’s critical role in steering Saudi Arabia beyond its traditional oil dependency.
The annual performance report of NIDLP underscores its achievements across essential sectors such as industry, mining, energy, and logistics. These sectors are experiencing what the program refers to as a “qualitative transformation” within the national economy. The overall contribution of non-oil activities to the broader GDP has reached 55%, showcasing a transformative shift driven by robust growth in manufacturing, mining, and transport sectors.
Notably, the manufacturing sector witnessed a growth rate of 4%, while both mining and transport/storage sectors expanded by 5%. This diversification strategy endeavors to cultivate a more resilient economic framework, reducing vulnerability to fluctuations in the global oil market and solidifying the nation’s fiscal stability.
The General Authority for Statistics reported an overall GDP growth of 1.3% for 2024, primarily fueled by expansions in non-oil sectors. This resilient performance is indicative of a broader shift away from direct reliance on oil revenues, aligning with the Kingdom’s long-term vision.
Launched in 2019, NIDLP seeks to integrate key sectors while leveraging local content and the advancements of the Fourth Industrial Revolution. The objective is to establish a diversified economic base characterized by high-value addition. The recent report reflects sustained momentum towards achieving these long-term economic goals.
The number of executive initiatives under NIDLP reached 284 by the end of 2024, with a commendable 163 completed, resulting in a completion rate of 57%. This ongoing progress validates the program’s capability to deliver substantial impact across its designated sectors.
Among the highlights of the report was the remarkable job creation within these sectors. Total employment across NIDLP-related industries surpassed 2.43 million in 2024. The program alone generated more than 508,000 new jobs during the year, of which over 81,000 positions were filled by Saudi nationals. Key contributors to these employment gains included sectors such as manufacturing, mining and quarrying, electricity and gas, and logistics, underscoring the program’s broad economic footprint.
Another significant development was the substantial increase in non-oil exports, which reached a total value of SR514 billion, reflecting a year-on-year increase of 13.2%. Exports of non-oil goods alone climbed by 4%, contributing SR217 billion to this total. Notably, re-exports surged by an impressive 42% to SR90 billion, while services exports increased by 14% to reach SR207 billion. Chemicals emerged as the leading export category, contributing SR78.5 billion, closely followed by electrical equipment and metals.
The labor market’s significant gains are a testament to NIDLP’s role in fostering economic opportunities. The robust employment figures underline the program’s success in creating jobs, which are essential for ensuring sustainable economic growth and meeting the demographic challenges facing the Kingdom.
Saudi Arabia’s non-government investments in program sectors reached SR665 billion, with the Saudi Industrial Development Fund approving cumulative loans totaling SR198 billion. Furthermore, export credit facilities issued by the Saudi Export-Import Bank stood at SR69.14 billion, providing critical support to both new and existing industries.
Industrial activity also saw remarkable expansion, with a record of 12,589 industrial establishments operational by year-end. The number of ready-built factories reached 1,511 as new investment in industrial cities and special zones totaled a remarkable SR1.41 trillion.
The local defense industry is progressing, with cumulative sales from domestic companies reaching SR34.32 billion. NIDLP’s national industrial strategy is particularly focused on localizing supply chains across various sectors such as medical supplies, automotive, and energy-related products.
Renewable energy initiatives have also gained traction, with total capacity initiated in 2024 reaching an impressive 20 gigawatts. This includes significant new agreements for solar projects and new commercial operations contributing to carbon emissions reductions of approximately 1.7 million tonnes.
The mining sector has experienced a burgeoning environment for exploration, with spending reaching SR228 per square kilometer and a 380% increase in mining sites offered for competitive bidding. The sector aims to contribute SR176 billion to GDP and create approximately 219,000 jobs by 2030. Saudi Arabia’s global ranking for mining license environment quality has notably improved as well.
Logistics advancements complement these developments, with 1,056 logistics licenses issued and the expansion of re-export logistics centers from just two in 2019 to an impressive 23 in 2024. Port utilization rose to 64%, while customs clearance times were reduced to just two hours, facilitating smoother trade operations.
Furthermore, the performance indicators exceeded several objectives set by the Ministry, including military industrialization localization which reached 19.35%, surpassing its target of 12.5%. Local content in non-oil sectors achieved SR1.231 trillion, exceeding the target of SR1.11 trillion. The momentum continues with 3,107 final licenses issued for promising industries, well above the target of 845 licenses.
As NIDLP evolves, it not only contributes to achieving three primary pillars of Vision 2030—fostering a vibrant society, creating a thriving economy, and building an ambitious nation—but it also plays a crucial role in driving key secondary goals through strengthening private sector participation and maximizing economic value.
A focal point of the program is to improve the competitiveness of Saudi Arabia’s energy sector and enhance local content across oil and gas industries while promoting renewable energy development. NIDLP also focuses on establishing specialized economic zones designed to attract foreign investments, facilitating growth in various sectors.
Alongside these efforts, the program is committed to advancing non-oil sectors, targeting localization of high-potential sectors such as advanced manufacturing and defense industries. This emphasis on localization aims to maximize domestic value across the country’s non-oil value chains.
The logistical framework underpinning these initiatives is critical. NIDLP aims to bolster the performance of logistics hubs while enhancing domestic, regional, and international connectivity across trade and transport networks. All these efforts are geared towards consolidating Saudi Arabia’s position as a global logistics hub, reinforcing the Kingdom’s strategic role in global supply chains.
Saudi Arabia is now witnessing a monumental shift in its economic landscape—one that promises not just improved GDP figures but a more sustainable and diversified economy paving the way for future generations.
Key Takeaways:
- NIDLP contributed SR986 billion to non-oil GDP in 2024, representing 39% of the total.
- Non-oil exports reached SR514 billion, a year-on-year increase of 13.2%.
- Over 508,000 new jobs created in NIDLP sectors, with 81,000 filled by Saudi nationals.
- The program aims to localize key sectors and enhance the competitiveness of the Saudi economy.
Source:
- General Authority for Statistics
- Saudi Industrial Development Fund
- NIDLP Annual Performance Report
