Saudi Arabia, the world’s third largest defense spender, aims to cut its defense import bill by 50% by 2030.

In an effort aimed at developing Saudi Arabia’s domestic defense industry, Saudi Arabian Military Industries (SAMI) and South Africa’s Paramount Group have signed an agreement to collaborate to this end.

Saudi Arabia, the world’s third-largest defense spender, aims to localise 50% of its defense expenditure by 2030.

Under the deal, SAMI, the kingdom’s state defense company, and Paramount, a private company, would collaborate on the development of technologies and capabilities across the land, sea and air domains, as well as system integration.

“This will contribute significantly to further enhancing the capability of Saudi Armed Forces and increasing local content,” said Andreas Schwer, SAMI’s CEO in a statement.

In 2018, Schwer had stated SAMI had approached a number of South African defense companies to help it fulfill its domestic defense requirements.

The deal with Paramount is the first of its type for the Kingdom.

Both companies did not provide further details as to the nature of the agreement.

“Saudi Arabia is important to Paramount Group as much of the technology that we have created over the years has been developed with the Middle East in mind,” said Paramount chairman Ivor Ichikowitz.

Incidentally, South Africa’s defense industry contributed significant amounts to the country’s economy during the apartheid-era. However for years, it has suffered from the impact of a squeeze on defense spending globally and a weak domestic market.

In 2018, Saudi Arabia had made a $1 billion bid for a broad partnership with South Africa’s defense company Denel that would have included acquisition of a minority stake in its joint venture with Germany’s Rheinmetall.

Despite its desperate need for cash, Denel failed to strike a deal by the end of 2018, the deadline by which SAMI said it wanted to conclude an agreement.

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