Oman plans to invest more than $12 billion into new projects to shore up income and create jobs in the wake of reduced crude oil production over the coming decades.

In the past 15 years Oman’s population has increased by more than a quarter to nearly 5 million. This rapid growth has placed strain on graduate job creation.

Today there are around 50,000 graduates seeking employment in the sultanate, around 1 percent of the population. Diversifying Oman’s economy is critical for creating jobs as well as pulling in investors.

The country is expected to produce just 700,000 barrels per day (bpd) by 2040, down from around one million bpd today. The government is counting on its 2040 Economic Vision, a development plan launched in 2021, to sustainably diversify its income away from oil with a range of glitzy mega-projects and initiatives.

These plans are targeted at rapidly reducing Oman’s oil reliance, slashing budget deficits and boosting returns from investments.

The government may also look to increase taxes in the battle to balance its books.

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Oman’s crude oil and gas revenues make up 70 percent of its state income. The remainder comes from VAT and corporate taxes. The budget deficit for this year is estimated at $1.7 billion. To finance this hole the government plans to borrow $623 million and draw the rest from its financial reserves.

Oman envisions the country cutting oil’s share of GDP to 16 percent in 2030 and 8.4 percent in 2040, down from 39 percent in 2017.

Source: Trade Finance