220,000 new Omani jobs required by 2030 to meet growth targets: IMF

Observer

2 days ago

MUSCAT, JUNE 1
The Omani economy must generate over 220 thousand jobs for its national workforce by 2032 to meet the country's national growth demands, according to the International Monetary Fund (IMF).
The figure is based on projections that 550,000 nationals will enter working age within the next year, with participation rates expected to remain around 67%.
Published in the IMF's Selected Issues Paper, 'Labour Market Dynamics in Oman,' April 2025, the report underscores that relying on the public sector as the primary source of employment is no longer feasible amidst efforts to ensure medium-term fiscal sustainability and reducing reliance on hydrocarbon revenues.
According to the report, while 56% of the Omani workforce is in the private sector, the public sector remains a favorable destination for Omanis due to job security, higher compensation, and more relaxed work arrangement.
The private sector, however, remains dominated by expatriates, which make up 86% of the workforce with wages significantly lower on average, particularly in low- and medium-skilled jobs, creating a wage disparity that deters private firms from hiring nationals without government intervention.
Furthermore, the IMF notes that Oman's education system, despite improvements, is not sufficiently aligned with the needs of a diversifying economy, causing a discrepancy in the skills required by the private sector and those available in the labour market.
According to the report, a large share of educational paths chosen by Omanis are still tilted towards humanities and business administration rather than science, engineering, and technology fields. Additionally, enrollment rates in vocational education represents less than 2% of enrollment in higher education.
Another identified challenge is the female labour participation rate which stands at 32%, in comparison to 89% for men. Omani women hold fewer senior and managerial roles, which could discourage them further from entering the labor market, despite higher academic performance among women, the report notes.
Finally, another key restraint to the labour market is limited mobility, especially for expatriate workers. Until recently, labour regulations required expatriates to remain with their initial employer for 12 months before qualifying for an unconditional job transfer. This restriction indirectly encouraged firms to favour expatriates over nationals, as their limited bargaining power contributed to lower wage expectations. In turn, this dynamic reduced the attractiveness of private sector roles for low-skilled Omanis.
The IMF hailed the new Social Protection and Labour Laws as a step in the right direction toward addressing longstanding challenges in the Omani labour market, while also recommending complementary policies to amplify their impact.
These include strengthening and scaling up active labor market programmes to reduce the skill mismatch with private sector needs, as well as adopting dual-education systems that integrate vocational training with on-site experience. The Fund also calls for accelerating efforts to increase the participation of women in the workforce. In addition, aligning wages in the public and private sectors more closely with productivity is seen as a key measure to enhance the appeal of private sector employment for nationals.