Integrated investment authority to put Oman on better fiscal footing

The Omani government’s recent decision to restructure and consolidate all of its sovereign wealth funds and investments in public sector enterprises under one all-encompassing umbrella – Oman Investment Authority – bodes well for efforts to stabilise the nation’s fiscal situation amid the current global economic downturn, according to a key official representing the state-owned investment behemoth.

Muneer al Muneeri (pictured), CEO – Rakiza, an infrastructure-focused fund operating under the auspices of Oman Investment Authority (OIA), said the establishment of a unified body ensures robust alignment of strategic direction and vision across all of the different businesses and enterprises brought under the authority’s fold.

“The creation of OIA has come at a critical time for the country, which has a new economic vision, Vision 2040, and new leadership,” said Al Muneeri.  “At the same time, the country is moving rapidly to adapt to changes and developments happening around the world. The creation of OIA is critical from several angles – we have all of the infrastructure, the different companies and projects that the government developed over the past 40 – 50 years. The new entity has only one basic vision: to harness all of these investments to accelerate the country’s economic diversification and to put the economy in a better shape going forward, and in line with the Vision 2040 objectives.”

The official made the observations during a webinar hosted recently by The Business Year (TBY) on the theme, ‘Oman: Investment Landscape’. Fellow panelists during the hour-long online discussion Included Ghassan al Hashar, Investment Director – Public Authority for Social Insurance (PASI), and Hanaa al Kharusi, General Manager and Head of Corporate Banking – Ahli Bank.

Rakija, a first-of-its-kind fund, was launched in 2018 to enable foreign equity investors to explore opportunities in Oman’s broader infrastructure sector.  Areas of strategic investment interest include Renewables, Oil & Gas, Social Infrastructure, Power and Water, Telecommunications, Transport & Logistics, and the Environment.

Significantly, the establishment of OIA will have beneficial implications for Rakiza’s strategic goals, according to the official. “For Rakiza, the creation of OIA is very helpful as we will now be able to work closely with other entities within the government and within OIA’s umbrella. This umbrella now has different companies operating across different sectors which we can tap into and work together in achieving their goals and targets as a financial investor in the infrastructure space.”

Additionally, a unified investment entity will have a positive bearing on Oman’s image in international debt markets, he pointed out. Alongside efforts to support further consolidation within its umbrella, OIA will also be developing a fiscal plan to place the country on a better footing fiscally and economically, he said.

“I assume certain actions will be taken that will give credit (ratings) agencies the confidence that the country is taking certain measures to make it financially better going forward,” he noted, adding that a better rating would ease Oman’s access to liquidity and debt markets.

Also auguring well for Rakiza’s strategic goals is recent legislation by the government promoting Public Private Partnerships (PPP) and privatisation. “At Rakiza, we are tapping into opportunities available through privatisation. After all, the government sees privatisation as part of economic diversification, especially in terms of accessing alternative sources of funding – something that is happening across the region as well. Privatisation of government assets not only helps tap into new financing, but at the same time, brings efficiency into the operation of these assets.”

He further added: “Rakiza is a platform for international financial investors to tap into these opportunities, and with the expertise we have within our team, investors will see the returns they expect when they consider emerging countries like Oman.”