MUSCAT: Oman’s Ministry of Finance announced at the weekend its intention to launch the third issuance of a sovereign sukuk denominated in Omani riyals within the framework of its sovereign sukuk programme unveiled in 2019. The bond will be issued via a book-building subscription process and will include a segment for small investors. The third issue of the sovereign sukuk programme is expected to contribute to promoting the rapid growth of the Islamic financial sector in the Sultanate, and it is part of the government’s strategy to deepen the capital market and expand its scope in order to enable it to play a greater role in local economic growth.
The Ministry of Finance has appointed the Islamic window of Bank Muscat to manage the issuance which can subscribed through all licensed banks operating in the Sultanate. The Ministry said the Sultanate is facing financial challenges as a result of the decline in oil prices and the consequences of the coronavirus pandemic, which have directly contributed to the sharp decline in global oil prices since the beginning of this year. Other production sectors have been impacted as well. Also having a negative bearing on the fiscal situation are production cuts agreed by Oman in line with its commitment to the Opec+ grouping of producers.
Nevertheless, the Sultanate has adopted a number of fiscal measures to rein in government spending and reduce the size of the growing deficit, notably by trimming public expenditure. The Ministry indicated that to meet financing requirements of the year, development bonds amounting to RO 550 million in value have been issued so far this year, while the government recently obtained a bridge loan of RO 770 million. This is in addition to withdrawals from state reserves, among other funding methods. The Ministry stressed however government’s commitment to monitor and evaluate its financial performance. Work is also underway to issue an integrated package of measures, it added. — ONA
Oman Observer is now on the WhatsApp channel. Click here
