UAE’s $11bn manufacturing investment aims to cut oil reliance

• Industrial exports up 70% on 2021
• AED300bn GDP contribution target
• Local production to cut imports

The UAE plans investment of more than AED40 billion ($11 billion) over the next five years to establish itself as a centre for advanced manufacturing.

The strategy aims to expand its industrial base, accelerating efforts to diversify its economy away from oil.

Highlighting progress so far, Dr. Sultan Al Jaber, federal minister of industry and advanced technology, said the Emirates’ industrial exports rose to AED197 billion last year, up nearly 70 percent on 2021.

Speaking at the 5th annual “Make it in the Emirates” forum in the capital, Abu Dhabi, he did not immediately give comparative figures for 2023.

“Countries with strong industrial foundations enjoy sustainable economic growth, secure a bright and prosperous future, and contribute to societal advancement,” Al Jaber said. “Investing in manufacturing is investing in an advanced economy.”

The AED40 billion injection target is part of so-called Operation 300bn, a ten-year industrial strategy launched in 2021 aimed at raising the sector’s GDP contribution to AED300 billion by 2031.

Eleven areas will benefit, ranging from chemicals, metals and electrical equipment, to food production, pharmaceuticals, rubber and plastics, and wood and paper products.

Seven local lenders, including Emirates Development Bank, First Abu Dhabi Bank, Mashreq, and Emirates NBD, will offer financing packages to industrial companies, particularly those involved in import substitution and high-tech production.

As part of the strategy, officials also unveiled plans to expand long term procurement opportunities, known as offtake agreements, to more than AED168 billion over the next decade. 

These contracts, which guarantee future purchase volumes, are expected to bolster investor confidence and support domestic production capacity. 

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In parallel, the UAE aims to localise over 4,800 industrial products, manufacturing them domestically to reduce reliance on imported goods.

The country also launched a AED1 billion Emirates Growth Fund, backed by Emirates Development Bank, to boost funding for small and medium-sized industrial enterprises.

The manufacturing sector contributed around 9 percent to the UAE’s GDP in 2024, according to the Ministry of Industry and Advanced Technology. Authorities are targeting an increase to 15 percent by 2031. 

About 700,000 people work in manufacturing in the UAE, in more than 13,500 industrial companies. Forty percent are based in Abu Dhabi and 20 percent in Dubai.

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Figures show that the UAE attracted over AED180 billion in industrial investments between 2021 and 2024, bolstered by regulatory reforms, foreign ownership incentives, and infrastructure spending. 

Emirates Development Bank alone deployed more than AED8 billion in financing for industrial projects during this period.

The urgency to diversify is rooted in the UAE’s dependence on hydrocarbons, which still account for roughly 30 percent of GDP and more than half of government revenues. 

With oil prices always generally volatile, the government is increasingly turning to advanced manufacturing, technology, and green energy as pillars of its post-oil economic model.