The Oman Investment Authority’s sovereign wealth fund has introduced a new OMR2 billion ($5.2 billion) fund aimed at attracting foreign direct investment (FDI) and promoting investments in local small and medium-sized businesses (SMEs). The Oman Future Fund, as it is called, allocates approximately 90% of its resources to FDI initiatives, with the remaining 10% earmarked for SMEs and venture capital projects, according to the Oman Observer.
The fund’s strategic partner is Oman’s finance ministry, and the collaboration, initially announced in May, is set to receive support from other government entities and companies, including the majority-state-owned telecommunications provider Omantel.
Oman has been actively working to diversify its economy away from reliance on fossil fuels. In 2019, the introduction of the New Foreign Capital Investment Law facilitated foreign investors’ engagement in commercial activities within or from Oman without requiring a local legal entity or commercial agent. This legislative change has contributed to the attraction of 235 FDI projects between 2019 and 2023, with the communications and media sectors experiencing notable growth, driven by nationwide fiber network installation projects and developments in tourism.
Despite these efforts, Oman’s economy remains heavily dependent on oil and gas, generating between 68% and 85% of government revenue, according to Moody Analytics. Past challenges, such as the 2016 budget deficit of $13.8 billion, equivalent to around 20% of the sultanate’s GDP, prompted officials to issue debt to cover the shortfall. Currently, Oman ranks 59th globally in terms of inbound greenfield FDI projects and fifth within the Middle East, following the UAE, Saudi Arabia, Qatar, and Israel. The establishment of the Oman Future Fund reflects ongoing efforts to diversify and strengthen the country’s economic landscape.
