How ICV is Benefiting UAE Economy in Terms of Wealth Creation and Bringing Quality Suppliers to Execute Govt Contracts
The UAE is considered to be one of the most promising business regions in the world. Thanks to its well-developed infrastructure and the many initiatives taken by the authorities to create a business-friendly environment. The In-Country Value (ICV) program is one such initiative. Launched in 2018 by ADNOC, the ICV program aims to localize the UAE’s supply chain and accelerate the rate at which the Emirate’s GDP shall increase. The end goal of this program is to create jobs and business opportunities for Emirati people and to strengthen the UAE economy.
Since its inception, the ICV program has progressed quite well. Its success has resulted in a number of other entities taking an interest in the program as well.
What is ICV?
As its name suggests, the In-Country Value program aims to introduce measures that will help improve UAE’s local economy. The entire program is quite simple to understand; there are ICV registered entities, companies that have adopted the ICV program. ADNOC was the first ICV registered entity in the Emirates, and now more entities are following in their footsteps.
Any business or individual wanting to work with an ICV entity and enjoy the benefits of the program has to receive ICV certification. This certification can be obtained from any of the ICV certification bodies in UAE. This certification isn’t compulsory, meaning that you can still do business with registered entities if you don’t hold a certificate. But having the certification will give you an edge in the bidding process.
ICV registered entities recognize “ICV score” as an essential factor when deciding who to award the contracts to. There are several elements that are used to calculate the ICV score of every supplier. All of these elements are related to business activities that contribute to In-Country Value.
Businesses that hold ICV certification receive a bonus in their ICV score by default. This gives them an advantage over anyone who doesn’t have this certification. This approach encourages more businesses to become ICV certified without disrupting an already existing process.
Currently Registered Entities
Since 2018, the ICV program has had a positive impact on the Emirate’s economy. What started off as an initiative by ADNOC for economic and societal betterment has turned into a program being adopted by numerous other entities as well. Currently, the following entities have registered with the ICV program:
- Department of Economic Development
- Abu Dhabi Ports
- Mubadala Investment Company
As more and more entities are adopting the program, there are efforts being made to standardize the certification process. This shall make it easier for businesses and entities to get on-board the program. Recently, ENEC and Mubadala have partnered together and standardized their ICV certification process.
Impact of ICV on UAE’s Economy
The ICV program has played a major role in helping UAE withstand the impacts of COVID-19. The program has accelerated job creation, localized important parts of the Emirate’s supply chains, and had increased GDP as well. All of this has helped counter the impact of COVID-19 that has left many economies in a crippled state.
The entities that have become part of the program shall make an active effort to seek out collaborative opportunities as well. This shall help increase employment opportunities and increase the demand for locally sourced services and goods.
If we take a look at the numbers, it becomes clear that the ICV program has a positive impact on the economy so far. Since its inception in January 2018, the program has helped bring more than AED 44bn ($12bn) back to the Emirate’s economy thanks to localization. Also, a boost in private sector jobs has been observed as well. The ICV program has helped create around 1,500 jobs in UAE’s private sector.
Up till now, ENEC has awarded more than 2,000 local businesses with contracts. The combined value of these contracts is worth somewhere around AED 17.5bn. ADNOC currently has 4,000 suppliers from various sectors certified in its ICV program. ADNOC also handed two major contracts, worth around $245m. While these contracts weren’t given to local entities, the ICV program will ensure that more than half of the total value of these contracts will eventually be driven back to UAE’s economy.
As more entities will adopt the program and move towards standardization, these numbers will only continue to grow.
Job creation, socio-economic development, and GDP growth through localization. These are the main goals of the ICV program. Currently, we have a number of entities that have become part of the program and are making an active effort to accelerate the program’s agenda.
The program provides benefits for registered entities and for suppliers who are ICV certified. Most of all, it benefits the UAE’s economy. Currently, the program has shown promise by driving back a huge amount of money into the UAE’s economy. Also, it shall help mitigate the impact of COVID-19 as the Emirates move towards supply chain localization.
In the near future, the certification process will be simplified as the registered entities begin standardizing their certification process. This shall encourage more businesses to become ICV certified.