Job plan funding tied to procurement in budget

MUSCAT, JAN 2
Oman is embedding labour-market support into its public spending system by linking part of the funding for its employment programme to government and state-linked procurement, as the Sultanate of Oman rolls out its 2026 budget and the Eleventh Five-Year Development Plan (2026–2030).
Officials said the government has allocated around RO 100 million a year for the employment programme during the plan period, including 1.2 per cent of the value of contracts and procurements concluded with government units, companies affiliated to the Oman Investment Authority; and oil and gas company contracts.
The mechanism is notable because it shifts employment policy from being solely a budget line to becoming a built-in feature of procurement flows — a design intended to broaden responsibility for job creation and strengthen employment stability as the new five-year plan begins.
The 2026 state budget projects RO 11.447 billion in revenue, calculated on an average oil price assumption of $60 per barrel, against estimated spending of RO 11.977 billion, resulting in a projected deficit of about RO 530 million.
Within the revenue breakdown cited at the press briefing, officials estimated net oil revenues at RO 5.752 billion, net gas revenues at RO 1.961 billion and non-oil revenues at RO 3.734 billion.
The employment-programme funding design raises practical questions for the market — particularly contractors, suppliers and SMEs that rely on public tenders — including how the 1.2 per cent contribution will be applied across procurement cycles, how it will be disclosed in tender documents and invoices; and what safeguards will ensure the mechanism supports jobs without distorting competition or inflating project costs.
Officials also outlined the broader fiscal framework for 2026. Current expenditure is estimated at about RO 8.771 billion, including RO 3.160 billion for defence and security and RO 4.700 billion for civil ministries, while public debt service expenditure is set at about RO 911 million, based on expected interest payments and repayment plans.
On financing, the government plans to cover its needs through domestic borrowing of around RO 902 million, external borrowing of about RO 990 million and a draw from reserves of roughly RO 400 million, officials said.
In parallel, a Royal Decree requires the Ministry of Economy to issue the Strategic Programmes Volume of the Eleventh Five-Year Plan in the first quarter of 2026, with projects to be determined at the start of each year and monitored through periodic evaluation.