Omanisation and ICV: A comprehensive overview
Published: 06:05 PM,May 03,2025 | EDITED : 10:05 PM,May 03,2025
Oman has embarked on a transformative journey to diversify its economy and reduce dependency on oil revenues. Central to this vision are two pivotal initiatives: Omanisation and In-Country Value (ICV). These strategies aim to enhance local employment, develop national competencies, and retain economic value within the country. This article delves into the evolution, implementation, and impact of these initiatives across various sectors in Oman.
ICV enhances Oman’s economic status by increasing domestic investment and raising skilled workforce employment. Omanisation sets national labour quotas, subsequently purposing their retraining them to ICV-enhancing sectors. Oman is reported as having the 4th fastest growing economy, projecting to peak the 2025 GDP rate at $185 billion. Dual ICV policy ventures are projected to successfully improve these numbers.
When aligning these ICV enhancements with globalization factors, Oman could boost the domestic economy growth rate by a staggering 16%. Reassessing current flows and policies while stimulating improvements through Omanisation will achieve a flexible economic growth framework.
IMPLEMENTATION FRAMEWORK: GOVERNMENTAL POLICIES
The several bodies and policies established by the Omani government to administer and ICV and Omanisation include:
- Omanisation has direct responsibilities to the Ministry of Labour, which sets Omanisation quotas per sector and ensures compliance.
- ICV integration is the responsibility of the Ministry of Energy and Minerals, which works with companies to ensure ICV clauses are included in contracts and scope of works.
- The Tender Board concentrates on Local Content for procurement contracts sponsored by Government, with plans to create a National Local Content Office that will devise and oversee policies and frameworks for optimising local content.
Corporate Engagement
Businesses active in Oman must comply with the Omanisation and ICV specific requirements. For example:
• Petroleum Development Oman (PDO): In 2023, the company spent $2.5 billion on ICV initiatives, which was 40% of its total supply chain spending. This included $900 million towards SMEs and $422 million worth of goods from 30 local manufacturers.
• OQ Group: In 2023, PDO also spent $753.11 million of their budget for local suppliers, including $172.53 million for SMEs in Riyada Card holder categories.
Oil and Gas Sector
The ICV and Omanisation policies have been spearheaded in the oil and gas industry:
• Training Programmes: PDO and other companies have initiated training programs to bring on board Omanis as welders, and for engineer and white-collar roles, certified nurse midwives or other positions.
• Supplying Manufacturing: These programs have resulted in Omani companies producing flanges, valves and pumps which improves local manufacturing.
Transport and Logistics:
The Oman Ministry of Transport, Communications & Information Technology has set high Omanisation goals for the period:
• Omani Mazdoor Union: 100% Omanisation is the goal for certain positions in transport, logistics as well as communications and IT from 2025 to 2027.
• Goals for the Year: The 2024 Omanisation target for the transport and logistics sector is 20%, and 31% for communications and IT.
Manufacturing and SMEs
Increasing local manufacturing activities and supporting Small and Medium-sized Enterprises (SMEs) include:
• Impact on SME Development: PDO's investment in SMEs will reach $900 million in 2023, illustrating his intent to nurture business and vendor development.
• Local Industry Participation: ICV enhancement and sustaining strategies for Galfar put above 90% of spending in the local market.
Striking the Balance
Although strides have been made, the challenges remain:
• Skill Gaps: The ability of an Omani national to actually take over the job of an expatriate in the future is always a challenge. There is a need to improve the education system and vocational training facilities.
• Participation of Private Sector: Omanisation might be avoided by some private sector establishments because of the assumed increased expenses or decrease in productivity. For non-complaint companies, the government policy has altered to provide stricter penalties which are now higher fees and less financial incentives.
• Monitoring and Evaluation: Developing a proper system to monitor and evaluate ICV and Omanisation activities needs to be done. These are objectives of the proposed, functionally termed 'Local Content Office'.
COMING YEARS PROGNOSIS
Human capital development alongside economic diversification is one of the pointers in Oman’s Vision 2040. Omanisation and In-Country Value (ICV) are still believed to:
• Boost Oman’s Economic Resilience: By eliminating dependence on foreign labor and retaining value within the economy.
• Enhance Sustainable Development: Osman’s goal of local industries and SME's value construction.
• Promote Innovation: Supporting new sector development with the transfer of technology.
The creation of specific entities, like the ‘Local Content Office’; the integration of ICV into national policy showcases Oman’s attainment of these goals.
CONCLUSION
These steps mark Oman’s socio-economic evolve strategy. Omanisation and In-Country Value policies form the core. Oman is developing these policies with the intention of a reinforced economy of increasing resilience, diversity, and sustainability. These plans can be achieved if the government joins forces with the private sector and educational institutions.
ICV enhances Oman’s economic status by increasing domestic investment and raising skilled workforce employment. Omanisation sets national labour quotas, subsequently purposing their retraining them to ICV-enhancing sectors. Oman is reported as having the 4th fastest growing economy, projecting to peak the 2025 GDP rate at $185 billion. Dual ICV policy ventures are projected to successfully improve these numbers.
When aligning these ICV enhancements with globalization factors, Oman could boost the domestic economy growth rate by a staggering 16%. Reassessing current flows and policies while stimulating improvements through Omanisation will achieve a flexible economic growth framework.
IMPLEMENTATION FRAMEWORK: GOVERNMENTAL POLICIES
The several bodies and policies established by the Omani government to administer and ICV and Omanisation include:
- Omanisation has direct responsibilities to the Ministry of Labour, which sets Omanisation quotas per sector and ensures compliance.
- ICV integration is the responsibility of the Ministry of Energy and Minerals, which works with companies to ensure ICV clauses are included in contracts and scope of works.
- The Tender Board concentrates on Local Content for procurement contracts sponsored by Government, with plans to create a National Local Content Office that will devise and oversee policies and frameworks for optimising local content.
Corporate Engagement
Businesses active in Oman must comply with the Omanisation and ICV specific requirements. For example:
• Petroleum Development Oman (PDO): In 2023, the company spent $2.5 billion on ICV initiatives, which was 40% of its total supply chain spending. This included $900 million towards SMEs and $422 million worth of goods from 30 local manufacturers.
• OQ Group: In 2023, PDO also spent $753.11 million of their budget for local suppliers, including $172.53 million for SMEs in Riyada Card holder categories.
Oil and Gas Sector
The ICV and Omanisation policies have been spearheaded in the oil and gas industry:
• Training Programmes: PDO and other companies have initiated training programs to bring on board Omanis as welders, and for engineer and white-collar roles, certified nurse midwives or other positions.
• Supplying Manufacturing: These programs have resulted in Omani companies producing flanges, valves and pumps which improves local manufacturing.
Transport and Logistics:
The Oman Ministry of Transport, Communications & Information Technology has set high Omanisation goals for the period:
• Omani Mazdoor Union: 100% Omanisation is the goal for certain positions in transport, logistics as well as communications and IT from 2025 to 2027.
• Goals for the Year: The 2024 Omanisation target for the transport and logistics sector is 20%, and 31% for communications and IT.
Manufacturing and SMEs
Increasing local manufacturing activities and supporting Small and Medium-sized Enterprises (SMEs) include:
• Impact on SME Development: PDO's investment in SMEs will reach $900 million in 2023, illustrating his intent to nurture business and vendor development.
• Local Industry Participation: ICV enhancement and sustaining strategies for Galfar put above 90% of spending in the local market.
Striking the Balance
Although strides have been made, the challenges remain:
• Skill Gaps: The ability of an Omani national to actually take over the job of an expatriate in the future is always a challenge. There is a need to improve the education system and vocational training facilities.
• Participation of Private Sector: Omanisation might be avoided by some private sector establishments because of the assumed increased expenses or decrease in productivity. For non-complaint companies, the government policy has altered to provide stricter penalties which are now higher fees and less financial incentives.
• Monitoring and Evaluation: Developing a proper system to monitor and evaluate ICV and Omanisation activities needs to be done. These are objectives of the proposed, functionally termed 'Local Content Office'.
COMING YEARS PROGNOSIS
Human capital development alongside economic diversification is one of the pointers in Oman’s Vision 2040. Omanisation and In-Country Value (ICV) are still believed to:
• Boost Oman’s Economic Resilience: By eliminating dependence on foreign labor and retaining value within the economy.
• Enhance Sustainable Development: Osman’s goal of local industries and SME's value construction.
• Promote Innovation: Supporting new sector development with the transfer of technology.
The creation of specific entities, like the ‘Local Content Office’; the integration of ICV into national policy showcases Oman’s attainment of these goals.
CONCLUSION
These steps mark Oman’s socio-economic evolve strategy. Omanisation and In-Country Value policies form the core. Oman is developing these policies with the intention of a reinforced economy of increasing resilience, diversity, and sustainability. These plans can be achieved if the government joins forces with the private sector and educational institutions.