Industrial sector leads Oman’s economic growth
Published: 03:09 PM,Sep 11,2024 | EDITED : 11:09 PM,Sep 11,2024
MUSCAT: The industrial sector in the Sultanate of Oman has achieved remarkable economic growth in the first quarter of 2024, positioning itself as a key driver for sustainable development and economic diversification under Oman Vision 2040. According to the latest data from the National Centre for Statistics and Information (NCSI), Oman’s manufacturing sector grew by 9.2% at constant prices compared to the same period in 2023, with production value increasing from RO 871 million to RO 951 million across various industrial activities. This growth accounted for 10% of Oman’s GDP.
The most significant contributors to this growth were the basic chemical industries, which saw a 6.4% increase, and other manufacturing industries, which grew by 6.3%. The output in these sectors rose to RO 338.2 million and RO 545.2 million, respectively.
Driving factors behind industrial growth
Dr Saleh bin Said Masan, Under-Secretary of the Ministry of Commerce, Industry and Investment Promotion for Commerce and Industry, expressed his satisfaction with the rapid growth of Oman’s industrial sector. He highlighted that Oman’s industrial sector is outperforming the global average. While global industrial production grew by just 0.9% in the first quarter of 2024, Oman’s manufacturing industries saw more significant expansion due to strong governmental support and a focus on enhancing local products for both domestic and international markets.
Dr Masan attributed the sector’s success to the adoption of new technologies in supply chain management, which helped streamline operations and enhance production efficiency. Many Omani factories have implemented advanced tracking systems and logistics technologies, contributing to sustained growth despite global economic challenges such as fluctuating energy prices and supply chain disruptions. Additionally, Omani manufacturers have strategically adapted to changes in raw material and energy prices, making them more resilient to external pressures.
Oman’s rising competitiveness
Oman’s efforts in industrial development have been recognised globally. The country ranked 53rd worldwide and 4th regionally on the 2024 Industrial Performance Index for Competitiveness, issued by the United Nations Industrial Development Organisation (UNIDO). This ranking reflects the effectiveness of Oman’s policies aimed at improving its industrial sector's competitiveness.
The Ministry of Commerce, Industry, and Investment Promotion continues to support the sector by simplifying administrative procedures, offering tax incentives, and facilitating access to credit. These efforts have made it easier for investors to establish and expand their businesses. Additionally, the government provides land and services at competitive prices for industrial projects, with a particular focus on high-priority industries and advanced technologies.
Enhancing innovation and technology in manufacturing
To further enhance the sector, Oman is investing in research and development (R&D), digital technologies, and automation. The Ministry has established research centers to foster innovation, supporting startups through manufacturing incubators. Collaboration with academic institutions ensures the practical application of scientific and technical research in industry. Furthermore, the Ministry encourages the use of automation and artificial intelligence (AI) in factories, improving production processes' efficiency and accuracy while reducing costs.
Dr Masan emphasised the importance of adopting digital solutions such as the Internet of Things (IoT) and AI, which are becoming increasingly vital for modernising Oman’s manufacturing sector. By investing in R&D and innovation, Oman seeks to attract foreign investments in advanced industries and position itself as a leader in technological advancements in the region.
Export growth and international partnerships
Oman’s growing industrial sector has also led to a substantial increase in non-oil exports. By the end of May 2024, non-oil exports had risen by 11.2%, reaching RO 3.045 billion and accounting for 31% of the country’s total exports. A notable success story is the exponential rise in exports to South Korea, which increased by 1000%, fueled by the free trade agreement between the Gulf Cooperation Council (GCC) and South Korea. Exports to South Korea during the first five months of 2024 amounted to RO 288 million, driven by products such as naphtha, methanol, aluminum, and fish.
As the free trade agreement takes full effect, Omani non-oil exports are expected to further increase in the coming years. The agreement aims to reduce or eliminate customs tariffs and enhance competition between markets, promoting open economies and economic cooperation between the GCC and South Korea.
Future prospects and strategic initiatives
Oman’s Industrial Strategy 2040 outlines the government’s vision for the sector’s sustainable growth. Key initiatives include promoting national products in both local and international markets, developing human resources for the industrial sector, and modernising infrastructure. The Ministry of Commerce, Industry, and Investment Promotion is collaborating with various entities to offer specialised training programs and foster innovation in the workforce.
Mazen bin Humaid al Siyabi, Assistant Director General for Industry, emphasised that the government is actively supporting industrial entrepreneurship by organising trade events and providing export facilities. These initiatives, combined with strategic investments in infrastructure, aim to boost industrial output and create new job opportunities.
Oman’s industrial sector is set to remain a central pillar of economic growth and diversification. With continued investment in technology, innovation, and infrastructure, the sector is well-positioned to achieve sustained growth and contribute to the nation’s long-term economic objectives under Oman Vision 2040. — ONA
The most significant contributors to this growth were the basic chemical industries, which saw a 6.4% increase, and other manufacturing industries, which grew by 6.3%. The output in these sectors rose to RO 338.2 million and RO 545.2 million, respectively.
Driving factors behind industrial growth
Dr Saleh bin Said Masan, Under-Secretary of the Ministry of Commerce, Industry and Investment Promotion for Commerce and Industry, expressed his satisfaction with the rapid growth of Oman’s industrial sector. He highlighted that Oman’s industrial sector is outperforming the global average. While global industrial production grew by just 0.9% in the first quarter of 2024, Oman’s manufacturing industries saw more significant expansion due to strong governmental support and a focus on enhancing local products for both domestic and international markets.
Dr Masan attributed the sector’s success to the adoption of new technologies in supply chain management, which helped streamline operations and enhance production efficiency. Many Omani factories have implemented advanced tracking systems and logistics technologies, contributing to sustained growth despite global economic challenges such as fluctuating energy prices and supply chain disruptions. Additionally, Omani manufacturers have strategically adapted to changes in raw material and energy prices, making them more resilient to external pressures.
Oman’s rising competitiveness
Oman’s efforts in industrial development have been recognised globally. The country ranked 53rd worldwide and 4th regionally on the 2024 Industrial Performance Index for Competitiveness, issued by the United Nations Industrial Development Organisation (UNIDO). This ranking reflects the effectiveness of Oman’s policies aimed at improving its industrial sector's competitiveness.
The Ministry of Commerce, Industry, and Investment Promotion continues to support the sector by simplifying administrative procedures, offering tax incentives, and facilitating access to credit. These efforts have made it easier for investors to establish and expand their businesses. Additionally, the government provides land and services at competitive prices for industrial projects, with a particular focus on high-priority industries and advanced technologies.
Enhancing innovation and technology in manufacturing
To further enhance the sector, Oman is investing in research and development (R&D), digital technologies, and automation. The Ministry has established research centers to foster innovation, supporting startups through manufacturing incubators. Collaboration with academic institutions ensures the practical application of scientific and technical research in industry. Furthermore, the Ministry encourages the use of automation and artificial intelligence (AI) in factories, improving production processes' efficiency and accuracy while reducing costs.
Dr Masan emphasised the importance of adopting digital solutions such as the Internet of Things (IoT) and AI, which are becoming increasingly vital for modernising Oman’s manufacturing sector. By investing in R&D and innovation, Oman seeks to attract foreign investments in advanced industries and position itself as a leader in technological advancements in the region.
Export growth and international partnerships
Oman’s growing industrial sector has also led to a substantial increase in non-oil exports. By the end of May 2024, non-oil exports had risen by 11.2%, reaching RO 3.045 billion and accounting for 31% of the country’s total exports. A notable success story is the exponential rise in exports to South Korea, which increased by 1000%, fueled by the free trade agreement between the Gulf Cooperation Council (GCC) and South Korea. Exports to South Korea during the first five months of 2024 amounted to RO 288 million, driven by products such as naphtha, methanol, aluminum, and fish.
As the free trade agreement takes full effect, Omani non-oil exports are expected to further increase in the coming years. The agreement aims to reduce or eliminate customs tariffs and enhance competition between markets, promoting open economies and economic cooperation between the GCC and South Korea.
Future prospects and strategic initiatives
Oman’s Industrial Strategy 2040 outlines the government’s vision for the sector’s sustainable growth. Key initiatives include promoting national products in both local and international markets, developing human resources for the industrial sector, and modernising infrastructure. The Ministry of Commerce, Industry, and Investment Promotion is collaborating with various entities to offer specialised training programs and foster innovation in the workforce.
Mazen bin Humaid al Siyabi, Assistant Director General for Industry, emphasised that the government is actively supporting industrial entrepreneurship by organising trade events and providing export facilities. These initiatives, combined with strategic investments in infrastructure, aim to boost industrial output and create new job opportunities.
Oman’s industrial sector is set to remain a central pillar of economic growth and diversification. With continued investment in technology, innovation, and infrastructure, the sector is well-positioned to achieve sustained growth and contribute to the nation’s long-term economic objectives under Oman Vision 2040. — ONA