Oman Ministerial Roundtable

Focus on Oman as

an Investment Destination

Chamber welcomes high-level Oman ministerial delegation

Dr Muna Salim Al-Jardania, Under Secretary, Oman, Ministry of Higher Education, Research & Innovation H E Qais bin Mohammed Al Yousef, Oman Minister of Commerce, Industry & Investment Promotion Julian Lynn, Regional Head, Middle East and Asia Pacific, UK Export Finance

Mr Bandar Reda Julian Beach

HMA Bill Murray Sean Spratley Dr Frigyes Lestak

H E Azzan bin Qassim Al-Busaidi

A highly successful ministerial business roundtable on Oman took place at the Chamber on Tuesday 11 January 2022. The ABCC’s first business event of the new year had been organised in close collaboration with the Oman Embassy in London and the British Embassy in Muscat. The roundtable for potential investors in clean energy and mining in Oman attracted approximately one hundred delegates and allowed Omani officials to enter into constructive dialogue with potential British investors.

The main focus of the discussion at the event was on investment opportunities in key areas such as clean energy, solar, renewable technology, wind power, hydrogen and mining.

Mr Bandar Reda, ABCC Secretary General & CEO, formally welcomed the high-level Omani delegation to the Chamber and pledged to support private sector engagement.

The delegation comprised H E Qais bin Mohammed Al Yousef, Minister of Commerce, Industry & Investment Promotion, H E Prof Mahad Said Baawain, Minister of Labour, H E Abdulsalam Al Murshidi, President, Oman Investment Authority, H E Nasser bin Khamis bin Ali Al Jashmi, Secretary General, Ministry of Finance & Supervisor of the National Programme for Fiscal Balance, Dr Muna Salim Al-Jardania, Under Secretary at the Ministry of Higher Education, Research and Innovation, H E Sheikh Dr Mansoor bin Talib bin Ali Al Hinai, Chairman, Authority for Public Service, and H E Azzan bin Qassim Al-Busaidi, Advisor to the Ministry of Commerce, Industry & Investment Promotion.

The meeting heard that Oman had become more focused on promoting private sector investment in recent years and that it regarded the UK as a key partner in the fulfilment of its ambitions to develop a stronger and more diverse economy. Driven forward by its Vision 2040 blueprint, the Sultanate was implementing a package of incentives designed to attract foreign investors and introducing more business friendly laws to stimulate its economic recovery from the pandemic.

A keynote speech to the meeting was delivered by H E Qais bin Mohammed Al Yousef, Oman’s Minister of Commerce, Industry & Investment Promotion and further elaboration was provided by H E Azzan bin Qassim Al-Busaidi.

Apart from Oman’s excellent location and world-class infrastructure, the minister emphasised that investors could take advantage of incentives such as reduced land rent, a more efficient company licensing process, support for firms that hire Omani employees and new visas lasting up to ten years. Investors also benefit from the customfree access to markets arising out of Oman’s free trade agreements with countries in the Arab region, the United States and others.

Oman had many natural advantages and a wealth of resources which offered advantages to investors, whose investments were guaranteed by legislation and protected from future changes in law.

H E Qais bin Mohammed Al Yousef pointed out that a business license could be issues within a matter of minutes and revealed that the Ministry of Commerce was planning to open a dedicated desk to respond to queries on all issues of concern for UK investors. In addition, the minister stated, a new investor residency programme granted visas of 10-year duration, which formed part of the Omani government’s efforts to enhance the investment environment.

H M Ambassador to Oman, Mr Bill Murray, who chaired the discussion, pointed out that the meeting was being held within the framework of the UK-Oman joint action programme to promote bilateral investment. The delegation to the UK of senior Omani ministers followed on from the visit to London in December last year of H M Sultan Haitham bin Tariq, which was hailed as a milestone in UK-Omani relations. The ABCC’s roundtable was held on the day that Oman marked the 2nd anniversary of the Sultan’s rule.

Speakers stressed that both countries were looking forward to the concluding of a UK-GCC Free Trade Agreement expected later this year.

The clear message to British companies that emerged from the event was that Oman offered great opportunities to investors in a range of key sectors, notably tourism, fisheries and ICT and that it wanted to establish much closer relations with the UK, building on the historic relations enjoyed by the two nations.

Several leading UK firms active in Oman in the clean energy and mining sectors delivered positive accounts of their experiences of the Oman business environment during the roundtable. They warmly commended the support available to foreign investors and the keenness of the Omani authorities to help their businesses succeed in the market.

The British company executives were active in the technology, renewable energy and mining sectors. The overall impression was that it was easy to work in Oman and the attitude that investors could encounter was one of enthusiasm for cooperating with foreign investors. Oman was open to innovation and welcomed investors.

British investors sharing their testimonies included Julian Beach, whose company Green Fuels was a pioneer in renewable fuels; Ali Qaiser, of Hambro Perks, a technology investment firm; Raj Sandhu, of Bikal, which provides IT solutions; Chris Hulatt, founder of Octopus Group, which manages investment in renewables, healthcare and real estate; Sean Spratley, founder of Knights Bay, a mining investors with a decade of experience of Oman; Mark BattRawden, of Envorem, a Greentech firm involved in waste management; Dr Frigyes Lestak, of Flare2Value (F2V), an energy solutions company in flare abatement; and David Reavley, of Solar Water, which uses technology to enable sustainable and affordable access to fresh drinking water.

LATEST ECONOMIC NEWS FROM OMAN

2022 budget sets spending at $31.5bn

Oman has approved its annual budget for 2022, allocating 12.13 billion Omani riyals ($31.5bn) for spending, with a focus on basic public services, from health to social support, stimulating investment. This year’s budget, which is an increase on the previous year’s budget of 12.167bn riyals, is based on an oil price assumption of $50 per barrel, Oman News Agency (ONA) has reported.

IMF assessment

IMF has said that a strong rollout of vaccines, higher oil prices and continued implementation of structural reforms would considerably improve the outlook for Oman’s economy. IMF expects Oman’s real GDP – which contracted by 2.8 per cent in 2020 – to grow by 2.5 per cent this year and by 2.9 per cent in 2022.

Fitch Ratings revises Oman’s outlook

Fitch Ratings revised Oman’s outlook to stable from negative following improvements in key fiscal metrics, including government debt, GDP and the budget deficit.

The move means that all three main ratings agencies have now taken similar decisions in recent months, with Moody’s and S&P Global Ratings revising their outlooks on Oman upwards in October 2021.

Fitch explained its decision saying it estimated that the country’s deficit fell sharply to 3.4% of GDP in 2021, compared to 16.1% of GDP in 2020. More than half was due to higher oil and gas prices, with hydrocarbons revenues up by around a third.

However, it said, non-oil revenue has also been increasingly strongly, rising 40% year-on-year in the first ten months of this year, helped by the introduction of a value-added tax (VAT) in April.

Growth Forecast for 3.1 percent in 2022 and steady to 2.3 percent in 2023

Fitch also forecast real GDP growth to accelerate to 3.1 percent in 2022 and steady to 2.3 percent in 2023, driven by stronger hydrocarbon growth next year, while non-oil growth will be moderate at just over 2 percent on average. Non-oil growth will be supported by further recovery from the pandemic and the completion of large projects but constrained by the impact of fiscal consolidation.

Investment Projects

H E Abdussalam Mohammed al Murshidi, chairman, Oman Investment Authority (OIA), said (13 December 2021) that more than 110 investment projects are being implemented in 2021 and 2022 and the volume of actual investments in 2021 stood at RO2.6bn. In 2022, the volume of spending will be RO2.9bn through the expansion of current projects and setting up new ones. “In 2022, the volume of investments in the tourism sector is expected to be RO193mn, RO57mn in the mining sector, RO116mn in the logistics sector, and RO156mn in communications and information technology,” H E Murshidi said.

“This is in addition to RO99mn in the food sector, RO54mn in fisheries, RO1.41bn in the energy sector, RO803mn in the general services sector and RO52mn in other sectors,” he added.

He informed that sate-owned companies will operate themselves to cover their expenses without the help of the Ministry of Finance.

“Companies owned by OIA are working on several sustainable projects and will cover their own expenses,” he said.

Oman Vision 2040

Oman has adopted a bold 2040 Vision strategy that aims to create a competitive business hub underpinned by strong regulation and Environmental, Social, and Governance (ESG) goals.

The vision sees investment as key and sets out sustainable development goals, including renewable energy initiatives.

“The vision focuses on reshaping the roles of and relation between the public, private and civil sectors to ensure effective economic management; achieve a developed, diversified and sustainable national economy; ensure fair distribution of development gains among governorates; and protect the nation’s natural resources and unique environment,” His Majesty Sultan Haitham bin Tarik said in the Vision 2040.

‘Diversified economy will bring growth, resilience to Oman’ – the World Bank

Oman’s plans for economic diversification will help bring growth to the country and make it more resilient, according to a top official at the World Bank.

Issam Abousleiman, the World Bank’s country director of the GCC countries, Middle East and North Africa, said that diversification also provides more sustainable levels of growth, and multiple career opportunities for the next generation of graduates.

Oman’s Comparative Advantages

Oman’s economic expansion is a key part of Vision 2040, which aims to develop a sustainable, diversified economy that provides good standards of life and employment opportunities for all. The World Bank country director said that in expanding into tourism, agriculture and fisheries, mining, renewable energy, manufacturing, transport and logistics, the country is taking the right steps forward.

“With a stunning coastline of over 3,000 km plus attractive natural landscapes, historical monuments and a welcoming culture, Oman is well poised to capitalise on the tourism sector and its niche areas of eco-tourism and MICE (meetings, incentives, conferences and exhibitions),” he said.

“Other areas in which Oman might have a comparative advantage include logistics, given its geographic location, and food and agriculture,” said Abousleiman. “In addition, given the energy transition, Oman can move in taking advantage of the wind and the sun to expand renewable energy production that could reduce the cost of its own energy, reduce emission by helping meet its international commitment, and export excess energy as the GCC links its grid to other parts of the Middle East, Africa and beyond.

UK-Oman Relations

On 16 December 2021, the British Prime Minister welcomed the Sultan of Oman, Haitham bin Tarik al Said, to Downing Street for discussions aimed at enhancing bilateral relations.

Both countries welcomed their longstanding ties and looked forward to revitalising their partnership across trade, investment and defence.

The two leaders underlined their commitment to continue working closely together, looking ahead to a potential UK-GCC summit in 2022 and the signing of a free trade agreement.

With a stunning coastline of over 3,000 km plus attractive natural landscapes, historical monuments and a welcoming culture, Oman is well poised to capitalise on the tourism sector and its niche areas of eco-tourism and MICE (meetings, incentives, conferences and exhibitions)