Oman’s 2026 State budget adopts a pragmatic “buy-and-build-in-Oman” strategy to bolster local content by directing a greater share of public expenditure to local vendors, facilitating SME access to public contracts and attaching employment, skills and technology transfer obligations to large contracts.
SYSTEM AND RULES FOR PROCUREMENT AND LOCAL CONTENT
Government spending has immense potential to stimulate local content due to its direct influence on who earns, learns and builds capacity to invest. Procurement reform is slated for implementation by 2026, with the Projects, Tenders and Local Content Authority (PTLC) establishing the framework. Early indications point to a focus on tendering processes, standard operating procedures and the reduction of administrative burdens to streamline competition for local businesses. Budget analyses show that PTLC delivered cost savings and streamlined procurement documentation in 2025, with further improvements to the consistency and governance of tendering planned for 2026.
SMES ARE THE “ENGINE ROOM” OF LOCAL CONTENT
Local content goes beyond local manufacturing to include local service and supply chains in logistics, maintenance, IT and contracting. The 2026 budget connects economic transformation with the growth potential of SMEs. One measure of this is in the distribution of tenders. In the first half of 2025, the electronic tendering system (Esnad) provided the majority of tenders to SMEs, indicating the active management of the local supplier pipeline.
Finance is important too. The same analysis focuses on exemptions and new SME lending volumes, which enables local firms to invest in equipment, personnel and compliance — the “capability building” that transforms local participation into enduring local content.
EMPLOYMENT IS INTEGRATED INTO CONTRACT VALUE
With respect to local content, a distinctive aspect is how Oman merges procurement flows with national employment targets. Budget reporting for the 2026 budget rollout outlines funding for the employment programme, which contains a mechanism linked to the value of contracts and procurement across government entities, Oman Investment Authority subsidiaries; and the oil and gas sectors. That structure motivates contractors to integrate Omanisation, training and decent work creation into their project winning and delivery plans — facilitating “local content in people” and not just in products.
LOCAL CONTENT THAT IS SECTOR SPECIFIC FOSTERS LOCAL CAPABILITY
Sector programmes, in addition to general procurement, provide more immediate local content opportunities. For instance, Oman’s ICT local content stimulation strategy clearly incorporates a positive local content boost in the technical assessment for certain contract values — encouraging bidders to localise partnerships, employment and local service delivery capacity.
OFFSETS AND TECHNOLOGY TRANSFER STRENGTHEN LOCAL VALUE
When local content is not just spending but also includes know-how, it is at its best.
The ongoing budget climate emphasises the Partnership for Development (Offset) Programme, which seeks to build national workforce capability and transfer advanced technologies through structured agreements with international firms — assisting Oman in gradually gaining and retaining more advanced activities.
Bottom line: Oman’s 2026 budget emphasises support for local content, with procurement made more accessible and performance-based, facilitating the delivery and winning of contracts by SMEs, accompanying large contracts with employment outcomes and deploying sectoral rules coupled with offset programmes to transform expenditure into workforce development, local supply chains and sustained local capability.
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