27 Mar 2019
A new report from a global business consultancy revealed that Oman is planning to hike non-oil activities by an average of 4.3% between 2016 and 2020. - Times of Oman
The report, titled Oman 2019 and published by the Oxford Business Group (OBG), explains how the increases will be driven by the Sultanate’s Tanfeedh plans for economic diversification, which has targeted five sectors for development – manufacturing, logistics and transport, tourism, mining and energy and agriculture and fisheries.
Data from the National Centre for Statistics and Information (NCSI) showed that foreign trade from Oman’s exports totalled to OMR13.45 billion at the end of November 2018. Non-oil trade made up 28.72% of the amount, or OMR3.84 billion.
“The authorities are aiming to grow non-oil activities by an annual average of 4.3% between 2016 and 2020. The Ninth Five Year Plan seeks to shift the economy to a more private sector footing by developing small and medium-sized enterprises, public-private partnerships (PPPs) and improving the investment climate. The plan also establishes a privatisation programme that will grant the private sector numerous opportunities to acquire, finance or manage government projects,” the report said.
“In terms of broadening the economic base of the country, the Ninth Five Year Plan envisages both vertical expansion of the sectors dependent on oil and the development of non-oil sectors such as manufacturing, transportation and logistics, tourism and mining.”
The report went on to say: “The key objective of Tanfeedh is to ensure public and private sector participants efficiently implement the government’s diversification strategy. The programme establishes clear standards and key performance indicators for the government’s objectives and provides periodic reports on the progress of the reform effort.”
Ahmed Al Hooti, a board member of the Oman Chamber of Commerce and Industry (OCCI), and the head of economic studies at the organisation, said reaching the figure targeted was already in the works.
“Already, we have in the pipeline plans that are being run, and it is known that we have five new sectors for expansion,” he noted.
“Three of these sectors are already running, and two will start running soon. These five sectors will actually encourage more people to work hard, because we have the means to run these kinds of businesses. Logistics, tourism and industry and manufacturing are currently working, and the mining, fisheries and agriculture sectors are on the way.”
The report also showed that the Sultanate’s non-oil exports had shown a notable increase in 2017. The surge was mainly fuelled by a rapid expansion in the exports of mineral products, which increased by 78.2%, as well as manufactured plastic and rubber articles (45%), chemicals (39.8%), foodstuffs, beverages and tobacco (32.9%) and base metals (22.8%).
Dr Anchan CK, an expert on international investment in Oman, said that government policies are now largely aimed towards boosting non-oil investment.
“The higher oil prices in conjunction with fiscal measures, implemented over the last years, helped in improving Oman’s fiscal position,” he said.
“The monetary aggregates in Oman expanded during 2018 with an increase in domestic assets remaining as the primary source of such expansion. The credit conditions also improved and bank credit grew year-on-year by 7.5 per cent as at the end of 2018, suggesting some rebound in investment activities in 2019.
“The composition of GDP is pegged to shift from the current 40:60 split between the hydrocarbons and non-oil sector to 15:85 by 2030. This trend is expected to continue to 2040, when hydrocarbons are expected to account for just seven percent of gross domestic product (GDP).
"One of the key area which is currently focused is the private sector integration, which places specific emphasis on small and medium-sized enterprises (SMEs) and the non-hydrocarbons sector. Currently, SMEs accounts for around 15 percent of GDP. Oman’s efforts to expand non-oil activity will continue into 2019 through the Tanfeedh initiative and new policies," he went on to explain.