Oman Investment Authority launches $5.2bn fund to increase investments in SMEs

Sectors including tourism, manufacturing and green energy will be the focus

Evening in Muscat. The Oman Investment Authority's latest initiative sets out to strengthen the private sector and small and medium-size businesses. Photo: Alamy

Oman's sovereign wealth fund Oman Investment Authority has launched a 2 billion Omani rial ($5.2 billion) fund to encourage investments in the private sector and in small and medium-size enterprises.

The Future Fund Oman, announced in May last year, aims to strengthen the sultanate’s economy by supporting diversification and attracting more foreign investment, Oman’s Ministry of Economy said in a statement on Wednesday.

It is expected to focus on sectors such as tourism, manufacturing, green energy, maritime resources and technology.

The fund is a catalyst for the growth of the national economy, and a reliable partner for local and international investors wishing to expand the scope of their projects in Oman’s economy, OIA president Abdulsalam Al Murshidi was quoted as saying by the Oman News Agency.

The Gulf nation, which is heavily dependent on hydrocarbons, launched a three-year fiscal stability programme in October 2022 to add momentum to its economic recovery from the pandemic-driven slowdown and support the development of the country’s financial sector.

Oman’s economy is estimated to grow by 1.3 per cent in 2023, down from 4.3 per cent in 2022, due to Opec+ oil production cuts, the International Monetary Fund said in November.

The country posted a budget surplus of 931 million rials for the financial year 2023, according to preliminary data after a more-than-anticipated rise in public revenue on higher oil and gas production and prices.

The surplus for the year compared with a deficit of about 1.3 billion rials that the country's budget earlier estimated.

Last month, Fitch Ratings said that Oman’s aim to expand domestic green hydrogen production could support its gross domestic product, fiscal revenue and the balance of payments over the long term amid the global energy transition.

Oman aims to produce at least a million tonnes of renewable hydrogen a year by 2030 before increasing the capacity to 3.75 million tonnes by 2040 and 8.5 million tonnes by 2050.

Tourism push

One of the economic pillars of Oman Vision 2040 is to increase revenue from tourism.

In 2022, Oman welcomed about 2.9 million tourists – up 348 per cent compared with 2021.

The country expects to earn more than 9 billion rials a year from tourism by 2040, as it bids to diversify its economy away from oil income.

Last year, the Ministry of Heritage and Tourism unveiled plans for new adventure tourism projects, including cable cars, ziplines and mountain trails.

The country, known for its diverse landscape with mountains, caves, valleys and coastal areas, will benefit from a planned single unified tourist visa for the GCC region, which is expected to be introduced this year or 2025.

This move forms a large part of the GCC 2030 tourism strategy, which is aimed at increasing the sector's economic contribution through increased regional travel and higher hotel occupancy rates.

It intends to boost the number of visitors to GCC countries to 128.7 million visitors by 2030. That would be up from 39.8 million in 2022, which was itself an increase of 136.6 per cent compared with 2021.

The new programme is expected to be a game-changer for the region, according to hospitality and tourism experts.