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Saudi LCGPA Launches Additional Price Preference for Local Products

The Saudi Local Content and Government Procurement Authority (LCGPA) launched an additional price preference initiative to support 208 national products. (SPA)
The Saudi Local Content and Government Procurement Authority (LCGPA) launched an additional price preference initiative to support 208 national products. (SPA)
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Saudi LCGPA Launches Additional Price Preference for Local Products

The Saudi Local Content and Government Procurement Authority (LCGPA) launched an additional price preference initiative to support 208 national products. (SPA)
The Saudi Local Content and Government Procurement Authority (LCGPA) launched an additional price preference initiative to support 208 national products. (SPA)

The Saudi Local Content and Government Procurement Authority (LCGPA) launched an additional price preference initiative to support 208 national products in the medicine, pharmaceuticals and medical supplies sectors, as well as other industrial sectors.

The initiative was launched in cooperation with the Ministry of Industry and Mineral Resources and the Spending Efficiency Center.

The initiative aims to increase the price preference percentage granted to these products when compared to foreign counterparts during the bidding process in government competitions, the authority said.

The percentage, which was earlier determined by the local content preference regulations at 10%, was raised to 30% maximum, based on each sector’s standards. The move aims to mitigate the financial and economic impact on those sectors amid the COVID-19 pandemic.

The authority said the products were determined based on criteria differing from sector-to-sector according to its nature.

The new mechanism is based on providing a price preference of up to 20% for the products covered by the initiative; 10% under the initiative and 10% as per the price preference regulations. Every 10% preference will be based on the specific criteria of each sector targeted under the initiative.

Products identified in the Medicine and Pharma Sector are granted an additional preference of up to 10%, being included in the list, plus the other 10% if the product contains domestic Active Pharmaceutical Ingredient (API).

The initiative is based on Article 10 of the regulations granting preference to local content, Saudi SMEs and publicly listed companies. It also aims to help the sectors achieve self-sufficiency and strengthen supply chain for the target products.

LCGPA expects that the estimated spending on national factories during the initiative period, which ends on Dec. 31, 2021, will range between SAR 2 billion and SAR 3 billion.

The authority said the products were identified after a detailed study by the work team in the initiative. The study included 10,000 products, excluding those in the mandatory list.

A list of the target national products and the additional preference rates for each product will be issued in detail, and each product will be distributed according to the category within the additional price preference initiative, the authority said.

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Lebanon Hopes to Meet Foreign Bondholders in Coming Year, Finance Minister Says

A view shows Lebanon's Central Bank building in Beirut, Lebanon January 12, 2023. (Reuters)
A view shows Lebanon's Central Bank building in Beirut, Lebanon January 12, 2023. (Reuters)
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Lebanon Hopes to Meet Foreign Bondholders in Coming Year, Finance Minister Says

A view shows Lebanon's Central Bank building in Beirut, Lebanon January 12, 2023. (Reuters)
A view shows Lebanon's Central Bank building in Beirut, Lebanon January 12, 2023. (Reuters)

Lebanese officials hope to meet international bondholders to talk about restructuring debt in the next 12 months but are not planning any meetings at the World Bank/IMF Spring meetings next week, finance minister Yassin Jaber said on Tuesday.

Jaber spoke to Reuters just days before travelling to Washington for the Spring meetings - one of the biggest gatherings for financial policy makers and investors - where Lebanon will seek to show it has made progress on economic reforms to address the underlying causes of its financial crash.

Lebanon's economy began unravelling in 2019 after years of corruption and profligate spending by the country's ruling elite, and tipped into a sovereign default on its $31 billion of outstanding international bonds in March 2020.

Asked whether he planned to meet international bondholders in the next year, Jaber said, "definitely, definitely, this is as they say the elephant in the room."

"You can't escape it in the end. Lebanon is keen to resolve this issue, God willing," he said.

But the country needed to make progress on reforms - including reforming the banking sector and boosting government revenues through reforms to tax systems and customs collection - before it could start talks, Jaber said.

"We wanted, first of all, to do our homework, to put the whole reform process on the right track to get started. You can't have a house in total disorder and then say, 'I want to negotiate,'" he said.

The Lebanese delegation to the spring meetings will be the first outing at an IMF/World Bank meeting for Lebanon's new government, which took the reins in February and pledged to seek a new IMF programme. Jaber said it would be the first time a Lebanese finance minister attends in more than a decade.

Economy Minister Amer Bisat is scheduled to give an outlook on Lebanon's economy at a JPMorgan investor conference held on the sidelines, according to documents seen by Reuters.

The creditor group - which includes the heavyweight funds Amundi, Ashmore, BlackRock, BlueBay, Fidelity and T-Rowe Price as well as a group of smaller hedge funds - has recently appointed a financial advisor in preparation for debt talks.

Shortly after the bondholder group originally formed in 2021, it said it held a "blocking stake" of more than 25% across a number of Lebanon's bonds, making it a critical player in any debt restructuring.

The chunk of the bonds are also held by domestic commercial banks or the Lebanese central bank, which bought $3 billion of debt directly from a previous government in 2019.

Lebanon's bonds trade at deeply distressed levels of around 15-16 cents in the dollar. However, that is a sharp uptick from the single digits they traded in before Israel's military campaign badly weakened Lebanese armed group Hezbollah, long viewed as an obstacle to overcoming Lebanon's political paralysis.

In January, Lebanon's cabinet extended the statute of limitations on legal action over Eurobonds for another three years. Jaber said the move "reassured the bondholders".