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Oman’s economic diversification: Major strides made in delivery of 130 projects

Project facilitation: Oman Vision 2040 Implementation Follow-up Unit outlines progress in advancing strategic initiatives across eight economic and enabling sectors

The latest ‘Economic Diversification Report 2020’ produced by the Oman Vision 2040 Implementation Follow-up Unit – the successor of the Implementation Support & Follow-up Unit (ISFU) – provides a detailed account of the major strides achieved by the unit in advancing the delivery of strategically important projects and initiatives across eight key thrust economic and enabling sectors: Manufacturing, Tourism, Logistics, Labour Market, Business Environment, Fisheries, Energy and Mining.

A dashboard of as many as 130 projects and initiatives distributed in these eight sectors shows progress achieved in either advancing or completing the delivery of these targeted objectives over the course of 2020. A further 25 projects and initiatives, added to the dashboard in 2020, are making headway in their delivery, according to the report.

The Observer looks at the strategic and socioeconomic significance of the sectors identified by the Omani government for active hands-on follow-up and intervention at the highest levels of authority:


Designated as one of the main contributing sectors to the Omani economy, Manufacturing faced significant challenges stemming from the pandemic over 2020 in the face of, among other factors, border closures and flight suspensions which held up suppliers of manpower, equipment and raw materials. Of 23 projects and initiatives listed on the manufacturing dashboard in 2020, 61 per cent were delivered, effectively boosting the sector’s contribution to the GDP to 10.8 per cent in 2020.

Key highlight: Industrial Strategy 2040: A notable addition to the sector dashboard is a plan for a new 20-year Industrial Strategy. It envisions a well-developed manufacturing base in the Sultanate by 2040 leveraging modern technology, local Omani talent, and the latest innovations.

Spearheaded by the Ministry of Commerce, Industry and Investment Promotion, the Industrial Strategy 2040 blueprint seeks to: diversify manufacturing activities and turning them into technology and knowledge-based activities; develop unique and varied products that focus on improving the health and well-being of citizens; expand the Omani manufacturing industry geographically to enter new regional and international markets; advance technology in Omani manufacturing; and establish a culture of innovation.


Devastated by the pandemic, the sector is “rapidly recovering” in line with a recovery plan charted by the Ministry of Heritage and Tourism (MoHT) in Q4 2020. Programme stakeholders were focused on advancing five key KPIs for the sector: Delivering an exceptional tourism experience; Attracting more and higher-yielding tourists; Attracting private investments; Developing better plans to attract investors; and Creating job opportunities for Omanis.

Key highlight: Al Kasfah Spring and Al Ashkhara Beach projects

The Ministry of Heritage and Tourism is collaborating with the Ministry of Finance and Environment Authority in facilitating approvals for the development of tourism sites centering around the Al Kasfah Spring in Al Batinah South Governorate and Al Ashkhara Beach in Al Sharqiya South Governorate. The shortlisted investors undertaking further studies at the request of the authorities before final approvals come through.


A key sector that helped alleviate the adverse effects of the pandemic, the logistics sector posted a 23 per cent jump in the handling of containers and general cargo in Q1 2020, compared with figures for the corresponding quarter of 2019. A total of 18 projects and initiatives were listed for delivery on the sector’s dashboard last year. Interventions by the Oman Vision 2040 Implementation Follow-up Unit, helped in facilitating the movement of goods held up by pandemic-related lockdowns. The Unit also worked closely with the stakeholders of key projects listed on the dashboard.

Key highlight: Development of Airport City

Billed as a key enabler for Oman’s air cargo industry, the Airport City initiative has elicited interest from a number of players and potential investors who see the benefits of setting up operations in a free zone located in close proximity to air cargo terminals. Overseen by the Ministry of Transport, Communications and Information Technology, the initiative is also backed by Asyad-Marafi, Oman Shipping Company, and Oman International Container Terminal. A detailed masterplan, featuring a logistics gate and cold terminal extension, has been finalized.

Business Environment

The team overseeing this portfolio began 2020 with as many as 21 projects and initiatives aimed at enhancing the investment environment, as well as facilitating services within the sector. In addition to ‘Invest Easy’ and ‘Lean Principles’ added in 2019, a new sub-dashboard, focusing on ‘Doing Business’ was introduced in 2020 due to its importance and the nature of the report’s indicators.

Key highlight: Mega Sales

This initiative, added to the dashboard in 2020, aims to enable the implementation of major discount campaigns for a period of 3 days (ends in November) coinciding with the global discount by brands in the same period. “It aims to influence consumer behavior in Oman (localise spending) and enhance the percentage of sales of brands and the number of visitors and tourists going to shopping centers in Oman.” said the Implementation Unit.

Through changes in regulations, malls and entities with multiple retailers can apply for one license, allowing all of the stores operating in the mall to conduct sales at the same time. “This enables the retail sector to conduct for example “Black Friday” like mega sale at their own discretion, but it was capped at one time per year as year-round sales seemed problematic,” it noted. Stakeholders in the initiative include the Ministry of Commerce, Industry and Investment Promotion, Consumer Protection Authority, Ministry of Justice and Legal Affairs, and the Doing Business Report unit.


While the pandemic impacted progress in the implementation of a number of projects listed in the sector dashboard for 2020, a few successes were nevertheless recorded during the year. Last year, the first Commercial Abalone Aquaculture Project was launched in December. State-owned Al Wusta Company, a subsidiary of Fisheries Development Oman, also maintained its fishing trips rate despite the challenging environment.

Key highlight: Feed algae farm in Al Sharqiyah

British algae farming firm Feed Algae is a key player in the Al Sharqiyah Algae Farm which, with a capacity of 100,000 tons of algae per year, is set to be the biggest of its kind in the world when operational. Investment in the project is estimated at RO 167.5 million. Land allocated for the farm is currently the subject of some legal issues which are being resolved at the moment, according to the report.


A dramatic slump in electricity demand stemming from the pandemic and wider economic downturn adversely impacted the overall performance of the 14 projects and initiatives listed in the sector’s dashboard for the year. Nevertheless, commitments towards renewable energy, energy conservation and efficient use, and so on, will continue to be adhered to. Oman Vision 2040 targets the contribution of renewable energy resources in providing 20 per cent of the Sultanate’s electricity needs in 2030, rising to 35-39 per cent by 2040.

Key highlight: Green Zone

An initiative of the Authority for Public Services Regulation (APSR), it calls for a cluster of government buildings to be fitted with solar panels while at the same time subject to energy auditing and retrofitting – moves aimed at enhancing energy efficiency and their dependence on electricity from the grid. According to a survey, energy audits can deliver an average of 30 per cent savings in energy consumption through the implementation of the Energy Service Companies (ESCO) model. In the first phase of its roll-out, 14 buildings will be covered in this initiative.


Offering great potential in diversifying the national economy, the mining sector witnessed many challenges in advancing the 12 projects and initiatives listed on the dashboard for the year.

Key highlight: Shaleem Project

Several ministries are working together to help unlock the massive mineral potential of this block, which covers an area of 3314 sq km in the Dhofar Governorate. Minerals found in the founding include gypsum, limestone, attapulgite and dolomite, Stakeholders include the Ministry of Energy and Minerals, Ministry of Housing and Urban Planning, Ministry of Interior, Ministry of Heritage and Tourism, Ministry of Defence, Royal Oman Police, Ministry of Agriculture, Fisheries and Water Resources and Environment Authority.

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