Oman’s geographical position is still a great opportunity to expand its trade and logistics sector. The Sultanate of Oman already has an excellent infrastructure, part of which is available and another is under construction. The stable political climate is also of a value added to further expand the performance of the logistics sector. The equation required to have a competitive logistics sector is available in the Sultanate of Oman with key ingredients needed for Oman to make a quantum leap towards the growth of the sector and establishing the Sultanate of Oman as a hub for logistics acknowledged globally.
The above-mentioned factors only reinforce positioning of Oman as an ideal location for the suggested logistics hub, especially with its location at the crossroads of international trade and commerce that links the Eastern and Western worlds. Access to important international markets such as Greater Africa, Indian subcontinent and Eastern European countries can be done through this proposed logistics hub.
The current Sultanate of Oman Logistics Strategy (SOLS) 2040 is base for enhancing the competitiveness of the sector. The Strategy is aimed at:
• The logistics contribution to GDP growth – expressed in monetary terms
• The market share of goods that flow into the region
• Related employment growth
• The position of Oman on various logistics and industrial indices
• The global perception of Oman in relation to logistics
The strategy presents a growth scenario in real terms, which has been developed on the basis that logistics contributes (12%) of overall GDP by 2040, with an assumed stable annual growth of overall GDP by (5%). This recognizes that the 12% is based on the assumption that the current oil and gas production rates are sustainable. Knowing that this may not be the case, the contribution of logistics to the overall GDP is likely to be significantly higher and may reach (30%).
The aim of the logistics strategy is to raise Oman’s ranking to (20) in each index by 2030 and to (10) by 2040. In doing so, demand for other support services will be created including cargo handling, construction, IT equipment and software, trade finance, packaging and labelling, assembly and transport support industries.
With a highly advantageous strategic location at the crossroad of east-west trade routes and a coastline stretching over 3,000 kilometers, Oman offers direct trade routes from its deep-water ports to the fast-growing markets of the GCC, India, Africa, Far East and Europe. All major ports in these regions can be reached within two weeks, faster by two days than any other port inside the Strait of Hormuz.
In 2020, Oman ranked #1 for Port Calls according to UN Conference on Trade and Development. It took an average of only 12.5hrs to handle a ships container, compared to 13.8 hours in the second-best country. Oman also has 52% lower cost of complying to import documentary requirements that GCC average while ranking #1 in GCC in World Bank Doing Business – Trading Across Boarders index, saving time and cost for trade and logistics.
Oman has a great advantage from logistics point of view with open access to Indian Ocean, hence a large market access to Indian Subcontinent, East Africa and Far east. Opportunities in logistic sector include: Developing cold chains, Warehousing, added value services, Cargo freight station (Multi Country Consolidation, LCL Import/Export), 3PL, Logistics Solution Providers, E-Commerce logistics hub, Feeder connectivity into the regional markets and Level playing field for Free Zones.
Dr. Yousuf Hamed al Balushi
Smart Investment Gateway
yousufh@omaninvestgateway.com
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