Omani FDI inflows expected to accelerate: CBO.
The pace of Foreign Direct Investment (FDI) inflows is projected to pick up in the Sultanate, the Central of Bank of Oman (CBO) stated in a key report, citing a brightening macroeconomic outlook as well as the nation’s steadily improving ranking on the Global Competitive Index.
Net FDI inflows totalled around RO 700 million during January-September 2018, the CBO said in its newly published Mid-Year Review of the Omani Economy in 2018. This was primarily generated as a result of state-owned Oman Oil Company divesting a 10 per cent share in one of its assets to a foreign investor. “Net inflows under FDI would be much higher during the full year 2018,” it noted.
Explaining its optimism for heightened FDI inflows, the apex bank elaborated: “Overall, a conducive business environment, a strategic location coupled with state-of-the art infrastructure, an open current and capital accounts, and a fixed exchange rate makes Oman an attractive destination for foreign investment.
Furthermore, the new foreign investment law under active consideration is expected to further infuse confidence in foreign investors for bringing their investment in Oman. In view of the above, going forward, FDI inflows would accelerate in the Sultanate.”
Foreign investment, according to the CBO report, receives priority attentions in all of the government’s plans and strategies, including the economic diversification programmes, in light of its contribution and significance in contributing capital as well as supporting technology transfer.
“Besides providing a free open market economy, Oman has been constantly focusing on improving business environment that promotes competition and encourages participation of the private sector,” the report said.
It cited in this regard Oman’s ranking on the Global Competitiveness Index (GCI), which climbed to 47 in 2018, up from 62 in 2017, among a total of 140 countries covered by the Index. The improved ranking, the Central Bank said, is a reflection of the increasingly business-friendly environment taking hold in the Sultanate.
A combination of public private partnership (PPP) initiatives and the planned privatisation of public sector entities/assets will help catalyse the inflow of FDI, according to the report.
“Oman has also been encouraging FDI in prominent special economic zones (SEZs) such as Duqum, Sohar, Salalah and Al Mazyunah. Besides, Oman is strategically located with a very well developed infrastructure network encompassing roads, ports, and airports with huge potential to become a gateway to the entire Gulf region for international trade and investment. In fact, state-of-the-art logistics infrastructure (roads, air, and ports) in conjunction with several SEZs makes Oman an ideal place for foreign companies to set up their ventures for catering to the Gulf region and Asia,” the report explained.
The One Road One Belt (OROB), for which Oman has already signed a Memorandum of Understanding (MoU) with China, is expected to bring in large FDI in the Sultanate due to its strategic location, it further pointed out.
Thanks to a stimulating business environment, coupled with the continuous policy efforts of the authorities, Oman has been receiving robust FDI due to its free market, stable macroeconomic environment and political stability, the Central Bank stated. This FDI, while benefiting primarily the Oil & Gas sector, will also be channeled to non-oil industries, especially manufacturing, tourism and logistics, it added.