The UAE is regarded as one of the most promising business regions in the globe. Thanks to its well-developed infrastructure and the numerous measures done by the authorities to establish a business-friendly environment. The In-Country Value (ICV) programme is one such endeavour. ADNOC launched the ICV program in 2018 with the goal of localising the UAE’s supply chain and accelerating the Emirate’s GDP growth rate. The program’s ultimate purpose is to provide Emiratis with career and entrepreneurial possibilities while also strengthening the UAE economy.
Since its inception, the ICV program has evolved effectively. Its success has sparked interest in the program from a variety of other organisations.
What is ICV?
As the name implies, the In-Country Value program seeks to implement measures that will benefit the UAE’s local economy. The entire program is straightforward to understand; there are ICV registered businesses and companies that have implemented the ICV program. ADNOC was the first ICV-registered entity in the Emirates, and others are following suit.
Any firm or individual who wants to cooperate with an ICV entity and profit from the program must first obtain ICV certification. This certification can be achieved from any ICV certification body in the UAE. This certification is not required, therefore you can still conduct business with registered entities if you do not have one. However, holding the certification will provide you an advantage in the bidding process.
ICV registered organisations recognise the “ICV score” as an important consideration when awarding contracts. Each supplier’s ICV score is calculated using numerous elements. All of these aspects are related to commercial operations that increase in-country value.
Businesses with ICV certification gain a bonus in their ICV score by default. This offers them an advantage over those who do not have the certification. This strategy promotes additional firms to become ICV certified while not interrupting an already established procedure.
Currently Registered Entities
Since 2018, the ICV program has had a favourable impact on the Emirati economy. What began as an ADNOC project for economic and societal improvement has evolved into a program that is being adopted by a wide range of other entities.
Currently, the following entities have registered for the ICV program:
- ADNOC
- ALDAR
- Department of Economic Development
- Abu Dhabi Ports
- Mubadala Investment Co.
- ENEC
As more organisations use the program, efforts are being made to standardise the certification procedure. This will make it easy for businesses and entities to join the program. Recently, ENEC and Mubadala collaborated to standardise their ICV certification procedure.
Impact of ICV on the UAE Economy
The ICV program has helped the UAE cope with the effects of COVID-19. The program has accelerated job development, localised key components of the Emirate’s supply chains, and enhanced GDP. All of this has helped mitigate the effects of COVID-19, which has destroyed numerous economies.
Entities that have joined the program must also actively seek out cooperation opportunities. This will help to enhance job possibilities and the demand for locally based services and goods.
If we look at the figures, it is evident that the ICV program has had a good influence on the economy thus far. Since its commencement in January 2018, the program has helped return more than AED 44 billion ($12 billion) back into the Emirate’s economy through localisation. There has also been an increase in private-sector job opportunities. The ICV initiative has helped create around 1,500 jobs in the UAE’s private sector.
To date, ENEC has issued contracts to over 2,000 local enterprises. The cumulative value of these contracts is around AED 17.5 billion. ADNOC presently has 4,000 vendors from diverse industries certified through its ICV program.
ADNOC also awarded two large contracts totalling roughly $245 million. While these contracts were not awarded to local firms, the ICV program will ensure that more than half of the total value of these contracts is ultimately returned to the UAE’s economy.
As more institutions accept the program and work towards standardisation, these figures will only increase.
Conclusion
Localisation generates jobs, promotes socio economic development, and boosts GDP. These are the primary objectives of the ICV program. Currently, we have a number of entities that have joined the program and are actively working to further its objective.
The initiative helps both registered organisations and ICV-certified suppliers. Most importantly, it benefits the UAE economy. Currently, the program has demonstrated promise by reinvesting a significant amount of money in the UAE’s economy. It will also help to reduce the impact of COVID-19 as the Emirates move towards localising their supply chains.
The certification procedure will become simpler in the near future as registered entities standardise their certification processes. This will inspire more businesses to get ICV-certified.
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