Muscat: Oman’s economic expansion in 2019 could see the country export more and import less than it currently does, say financial experts and advisors.
Government data shows that the country’s exports have steadily increased in the past four years, while imports have decreased over the same time period, and as the Sultanate sets up more and more industries across several fields of expansion, in an attempt to move away from oil and gas-based sources of revenue and increase its income from other sources, Oman will become more self-reliant and turn into a key provider of goods and services required by other countries in the immediate and wider region.
A major part of this expansion has been highlighted under the Tanfeedh initiative for economic diversification, which has targeted five key areas of development, namely tourism, agriculture and fisheries, transportation and logistics, mining and energy, and manufacturing. Ahmed Al Hooti, Chairman of the Economic Studies Committee at the Oman Chamber of Commerce and Industry, says this will help increase exports from and decrease the costs of imports to the country.
“Oman has seen a slight increase in the five sectors of mining, manufacturing, agriculture, fisheries, and tourism,” he told Times of Oman. “The pace of this increase might be because of the economic conditions and the general pace of Oman’s economy, as well as how these diversification policies are helping.”
“However, I can expect an increase of between three and five per cent in 2019 in these sectors,”added Al Hooti.
“The more factories there are in Oman and the more current factories produce, these factories will be able to provide what Oman needs and export the rest,” explained Al Hooti.
“However, as long as Oman has an open market, it becomes impossible to say that any given product will completely replace imported goods. For people to choose an Omani product, we require a culture that recognises how important Omani products are to our society, but we also need Omani products to be able to compete on their own as well, whether that is via the price or quality.”
According to data from the National Centre for Statistics and Information (NCSI), as of September 2018, Oman’s total exports for the year stood at OMR10.638 billion, already up from the OMR 10.542 billion that had been recorded in 2017, and significantly higher than the OMR 8.534 billion that had been clocked in 2016.
At this rate, the export rate for 2018 is likely to surpass the OMR10.843 billion that was recorded in 2015, although it will still be short of the OMR17.519 billion that was registered in 2014. The country’s main exports are oil and gas, engine fuel, iron ore and concentrates and methyl alcohol.
With several industries that address Oman’s manufacturing, industrial, logistics, transport and construction sectors coming up in Duqm, which has been earmarked as the hub of the nation’s non-oil future, including a US$4.1 billion refinery, and more than $10.7 billion in investments from the Chinese, a sebacic acid plant, the new Port of Duqm and Oman Dry Dock establishments, as well as air and ground logistics and a fisheries zone, plans have been drawn up for Duqm to make very strong contributions to the country’s industries in the future.
Yahya bin Said Al Jabri, the General Supervisor for the Special Economic Zone Authority of Duqm (SEZAD), said, “SEZAD aspires that 2019 will witness the launch of several projects for the local and foreign private sector. While it welcomes investors from the Sultanate and the brotherly and friendly countries to invest in Duqm, SEZAD affirms it will provide them with all the facilities that will enable them to start their business with ease.”
As far as imports go, Oman imported about OMR7.6 billion worth of goods and supplies at the end of September 2018, significantly lower than in 2017 (OMR10.16 billion), 2016 (OMR8.9 billion), 2015 (OMR11.15 billion) and 2014 (OMR11.26 billion). The Sultanate also earned significant revenue through re-exporting goods, which netted the country about OMR1.327 billion in 2018, although that was lower than it had been in the past years.
The United Arab Emirates remains the biggest importer of goods into Oman, with a value of OMR3.49 billion, followed by China (OMR448.46 million), the US (OMR348.93 million), India (OMR312.92 million) and Qatar (OMR246.84 million). The Sultanate’s key imports are diesel, mobile phones, iron and iron ore, and gold. In addition, it also re-exports engine fuel, diesel, cigarettes, motor and engine parts, passenger and goods transport vehicles and airplane and helicopter parts.
However, with the Sultanate currently working on tapping its mineral reserves, Dr Anchan CK, an investment advisor in Oman, says the country’s trend of importing minerals could soon be reversed. “Oman is on the cusp of unlocking its mineral export potential,” he revealed. “The country has some of the richest and most diverse mineral deposits in the world, which are largely concentrated in the country’s mountain ranges. Copper, chromite, manganese, zinc and gold are distributed in an ophiolite sequence that is between one and six kilometres thick.
Anchan added, “Oman’s total gypsum ore reserves are estimated at 170m tonnes, while there is approximately 40m tonnes of copper ore and 30m tonnes of chromite, according to a 2017 white paper on the industry.
Duqm, in central Oman, holds reserves of industrial minerals and salt, while fertilisers such as potash are found some 500km north. Thumrait in the south is known for gypsum and Salalah for limestone. Shuwaymiyah in the Dhofar Governorate has large deposits of limestone, gypsum and dolomite, while Sohar in the far north of the country is rich in copper, gold, gabbro and limestone.”
In addition, the ports of Salalah and Sohar have also been earmarked as shipping, transport and logistics hubs for the future, given their strategic position on the open Arabian Sea. Located very close to the industrial estates and free zones in Sohar and Salalah, where a number of industries, including those that specialise in steel and aluminium smelting, agriculture and food storage and production, pharmaceuticals and textiles, have been or are being set up, these too will help boost Oman’s exports and manufacturing capabilities.
Jamal Aziz, CEO Sohar Free Zone and Deputy CEO Sohar Port, said, “Our plan to expand the port will allow these factories to expand and deal with larger shipments, which will enhance the Port’s presence at the regional level as one of the most developed ports, which is part of the official directions to promote economic diversification in the Sultanate.”
Port of Salalah CEO Andrew Dawes added, “As one of the leading ports in the region, we are naturally positioned to leverage both our location and capabilities to diversify our service portfolio.”