Finance & Capital Market

Oman logs $52bn foreign investment in 2018

The total foreign investments in Oman reached RO19.96 billion ($51.7 billion) by the end of 2018, up by 12.1%, compared to RO17.80 billion in 2017, a media report said.

The foreign direct investment (FDI) in Oman at the end of 2018 represented 63.6% of the total foreign investment while the other foreign investments, which include commercial credits, loans and deposits, represented 32.6% of the total foreign investments, reported Oman News Agency, citing data issued by the National Centre for Statistics and Information (NCSI).

The foreign investments in the Sultanate’s portfolios accounted for 3.7% of the total foreign investments and only 0.1% of financial derivatives. The total foreign investment inflows in 2018 reached RO2.16 billion compared to RO2.38 billion in 2017.

The data point out that the oil and gas sector recorded 48.8% of the total foreign investments in the Sultanate in 2018, reaching RO9,736.6 million compared to RO7,159.0 million in 2017 and RO5,267.2 million in 2016.

The financial brokerage and intermediation sector in Oman ranked second, recording 25.1% of the total foreign investments in 2018, followed by the manufacturing industries sector with 14.1% and the transport, storage and communications sector with 3.9% of the total foreign investments.

The value of foreign direct investment in 2018, which reflects a long-term relationship and a permanent interest in an entity that relate to another economy rather than the investor's economy, reached RO12.69 billion, up by 19%, compared to RO10.66 billion in 2017.

The data also show that the oil and gas extraction sector represented 67.3% of the total foreign direct investment in 2018, reaching RO8.54 billion, followed by the financial intermediation and manufacturing industries sectors, by 11.4% and 9.1%, respectively, of the total direct foreign investment.

According to the same data of NCSI, nine countries contributed to 86.9% of the total foreign direct investment in the Sultanate in 2018, with the United Kingdom (UK) ranking first with total investments reaching RO6.62 billion, followed by the United States of America (USA) with RO1.55 billion, the United Arab Emirates (UAE) with RO1.03 billion. The total direct investments of the State of Kuwait reached RO387.100 million; the investments of the Kingdom of Bahrain reached RO362.600 million; and that of the State of Qatar reached RO327.500 million.

According to the data, the income paid by foreign investment enterprises in 2018, including profits, proceeds from reinvestment and interest, reached RO1.13 billion, recording an increase of 11.9%, compared to RO1.02 billion in 2017.

The amount of interest paid to direct investors increased from RO735.100 million in 2017 to RO817.300 million in 2018 while the value of reinvested proceeds increased by 16.8% and income paid to other investment also increased by 56.7 % in 2018 to reach RO192.800 million.

The size of labour force in foreign direct investment enterprises in 2018 decreased by 4.6%, compared to 2017, as the total number of labour force in foreign investment enterprises reached 253,950 labourers. Out of this, 91,184 labourers are Omanis while the number of non-Omanis reached 162,766. This decrease was attributed to the decrease in the number of manpower in the construction sector by 11.6%.

Total wages and salaries in foreign investment enterprises in 2018 decreased by 1% compared to 2017, reaching RO2.33 billion, as the salaries and wages of Omanis decreased by 1.4%, recording RO1.23 billion while the salaries and wages of expatriates decreased by 3.6%, recording RO1.09 billion.

Oil and Gas and construction activities collectively received about 39.7% of total salaries and wages in 2018 while salaries and wages in the oil and gas activity represented 23.3%, and those in construction activity represented 16.4% of the total wages and salaries.

The foreign Omani investment registered an increase of 5.4% at the end of 2018 to reach RO6.81 billion compared to RO6.06 billion in 2017.

Other types of Omani investment included commercial credit, deposits and loans that represented the highest percentage, equivalent to 42.4% of the total Omani investments abroad in 2018 while direct Omani investment and investment in portfolios accounted for 27.4% and 30% of the total Omani investments abroad, respectively.

The Omani direct investment increased by 0.8% in 2018, compared to 2017. This increase is attributed to the increase in the investment of the oil and gas extraction sector by 0.5%, and real estate sector, leasing and commercial project activities by 0.2% during 2018 compared to 2017.

The total income from Omani investment abroad reached RO118.300 million in 2018, which is a decrease by 3.7% compared to 2017 while the income from direct investments decreased by 3%, as well the income from other investments decreased by 4.6%.

The UAE is considered the most important destination for Omani direct investment abroad at the end of 2018, reaching RO423.100 million, representing 22.7% of the total Omani direct investment abroad, followed by Kuwait with 9.3%, Saudi Arabia by 4.9% and India by 2.2%.