Bahrain’s Industrial Sector Strategy 2022-26 to attract investment

The Industrial Sector Strategy 2022-26 was launched in late December 2021 as part of the national Economic Recovery Plan to help Bahrain recover from the economic slowdown brought on by the Covid-19 pandemic. The strategy focuses on increasing the sector’s contribution to GDP, expanding domestically produced exports and creating job opportunities. It is supported by efforts to adapt to the Fourth Industrial Revolution, develop a circular carbon economy, attract investment in digitalisation and improve regional supply chains.

The targeted industries under the strategy include food, pharmaceuticals, micro-electronics, and aluminium and petrochemicals downstream industries. It also seeks to boost more sustainable energy segments which will contribute to the kingdom’s efforts to reach net-zero carbon emissions by 2060.

Five Pillars

Under the strategy’s first pillar, the government will promote local industries by launching programmes encouraging large manufacturers to purchase products and services from local small and medium-sized enterprises (SMEs). There are also plans to provide industrial incubation and acceleration services to SMEs and improve regional trade supply chains through Export Bahrain, an initiative that promotes local exports and the Made in Bahrain label. The second pillar entails investing in infrastructure. This will be achieved by dedicating zones to promising industries, improving the amenities and services provided to industrial sites, intensifying inspections, encouraging the use of renewable energy and setting up an innovation centre to promote the adoption of Fourth Industrial Revolution technologies.

Under the third pillar, the government will reevaluate existing procedures to improve investor experience. It will launch a unified electronic system as the central platform serving investors, ease procedures for acquiring licences and address other business-related challenges. The fourth pillar – providing career guidance to Bahrainis – ensures the provision of numerous educational and vocational training opportunities. Programmes that encourage hiring locals and incentives for factories to establish internship programmes for technical and vocational education graduates are also in the works. Aligning legislation and regulations – the fifth and final pillar – will be implemented in line with GCC guidelines. Local laws are expected to be amended to help facilitate the development of precision industries, and specific urban planning classifications are to be dedicated to industrial areas.

Monitoring Performance

Three key performance indicators (KPIs) will be used to evaluate the implementation of the strategy. The first is an increase in the ratio of Bahrainis employed in the sector to 25.3%, which would boost the number of citizens employed in the industry to 65,300 by 2026. The second is the industrial sector’s contribution to GDP, which is targeted for growth of 14.5% to reach BD2.5bn ($6.6bn) by 2026. The final KPI aims to improve the sector’s share of exports to 80.1%, amounting to BD2.5bn ($6.6bn) by 2026.

The government plans to carry out various investment projects linked to the strategy totalling more than BD90m ($238.7m). These include the US Trade Zone, valued at BD75m ($199m). The zone is slated for completion by June 2025 and will cover an area of 1.1m sq metres. In addition, there are plans to develop the Fasht Al Adhm industrial zone, with a total area of 104m sq metres; and the Aluminium transformative industry plot, with an area of 477,000 sq metres. Other planned projects include the East Salman Industrial City and South Hidd Industrial Area with an investment of BD35m ($92.8m) to boost the sector’s infrastructure.

Tamkeen, the government agency responsible for private sector development, has committed to supporting the objectives of the Industrial Strategy. Tamkeen will focus on accelerating the adoption of the Fourth Industrial Revolution by offering training opportunities, including in areas such as artificial intelligence and transformative production.