Oman's manufacturing moment: Building the economy of tomorrow

Observer

3 days ago

Oman stands at a pivotal juncture in its economic journey—a moment that demands bold, strategic decisions to shape long-term prosperity.
For decades, the nation's growth was anchored by its hydrocarbon resources, which provided essential revenue and enabled major infrastructure development. However, as global dynamics evolve—marked by shifting supply chains, digital disruption, and the climate transition—it has become clear that a new engine is needed to drive sustainable development.
Vision 2040 provides that roadmap, emphasising economic diversification, resilience, and international competitiveness. Among all sectors, manufacturing emerges as the most critical lever to deliver on these ambitions. It is not simply one industry among many; it is a force multiplier that catalyses growth across the economy, generates skilled employment, accelerates technology adoption, and enables Oman to transform raw materials into high-value exports.
In a world increasingly defined by strategic self-sufficiency and regional production hubs, Oman must fully commit to its manufacturing sector—not as an alternative, but as a national priority.
The manufacturing sector has demonstrated significant growth and resilience, aligning with national strategic objectives. The sector's average growth rate of 7.35% during the tenth five-year plan, culminating in 2024, is a clear testament to this momentum. Notably, Manufacturing Value Added (MVA) at constant prices reached RO 3.624 billion in 2024, accounting for 8.3% of GDP.
Foreign direct investment in the manufacturing sector increased in the first quarter of 2025 to reach RO 2.749 billion, a growth rate of 27.5% compared to the same period last year.
This growth was in industrial sectors, most notably renewable energy technologies, as well as medical, food, and others. This sustained growth reaffirms the sector's critical role in diversifying Oman's economy and enhancing national resilience.
The consistency in MVA growth—7.1% in 2021, 14% in 2022, and 8.3% in 2024, despite a temporary contraction in 2023—demonstrates both resilience and scalability.
Simultaneously, industrial exports reached RO 6.232 billion in 2024, following a substantial 44% increase in 2022 driven by strong global demand for petrochemical and metal products.
Foreign investments in the manufacturing sector have doubled over a short period, growing from RO 2.03 billion in 2020 to RO 4.575 billion in 2023, now constituting nearly 10% of total foreign investments.
This increase indicates robust international confidence in Oman's industrial ecosystem and future prospects.
The manufacturing sector is not only a driver of output and trade but also a catalyst for job creation.
Its high economic multipliers ensure that for every 100 direct jobs created, hundreds more are supported across the value chain. This is particularly vital for Oman's youth and rural populations, where employment opportunities can be expanded through industrial integration with sectors like mining and fisheries.
The approved national manufacturing strategy, accompanied by a clear implementation roadmap, lays out significant opportunities for the private sector. From high-value mineral processing to sustainable marine production and localised supply chains, Oman offers fertile ground for innovation, investment, and scalable enterprise-led growth.
At the heart of Oman's manufacturing advantage lies its ability to integrate upstream sectors — particularly mining and fisheries — into higher value chains. Oman is rich in strategic minerals like copper, gypsum, and limestone, and the country is finally beginning to move beyond extraction toward advanced processing and industrial transformation.
The development of the green copper cathode facility in Duqm is a prime example.
This project signals a shift from volume to value, from exporting ore to producing refined, sustainable materials with high market demand. The same holds true for fisheries.
Long a traditional livelihood, the sector is now primed for industrialization through cold chain development, product innovation (such as marine collagen and bio-based plastics), and international export logistics.
Manufacturing is the backbone that will transform these natural advantages into sustained economic returns, connecting rural supply with global demand and embedding more of the final product value within the Sultanate of Oman's borders.
To fully unlock this potential, four core enablers must be prioritised.
First, Oman must accelerate the development of a skilled, adaptive workforce. The factories of the future demand technicians, designers, process engineers, and digitally literate operators. These are not skills that can be imported at scale—they must be cultivated domestically through education reform, public-private training partnerships, and a reimagining of Omanisation. This policy must evolve from a quota system into a strategy for building national industrial capacity.
Second, the financial ecosystem must be tailored to industrial needs. Manufacturing projects require long-term capital and risk-tolerant finance structures. Oman should expand equity-based instruments, offer industrial scale-up funds, and strengthen export credit tools that incentivise private investment into priority sectors.
Third, regulatory clarity and speed must be addressed. Investors — both local and foreign — require transparent, predictable processes for licensing, land allocation, and labor approvals. Digital platforms like Invest Easy must evolve into seamless, integrated one-stop shops, supported by stable, pro-business regulatory environments.
Finally, Oman must pursue a cluster-based strategy, focusing resources on industrial hubs such as Suhar (advanced materials), Duqm (green industry), and Salalah (agrifood and fisheries).
These clusters promote scale, knowledge spillovers, and supply chain efficiency—conditions that individual factories cannot create in isolation.
Globally, the timing has never been better. According to Unido, while global manufacturing experienced a modest slowdown in early 2025, high-tech subsectors like computers and electronics remain resilient and are expected to lead recovery.
Oman, with its energy security, political stability, and access to three continents, is perfectly placed to integrate into reconfigured global value chains. As the world increasingly embraces 'friend-shoring' and strategic sourcing from reliable, neutral nations, Oman's appeal as an industrial partner is only set to rise.
But this window of opportunity will not remain open indefinitely. Global competition is accelerating, and those who move fastest will define the next generation of industrial leadership.
Oman must act decisively—channeling its incentives, infrastructure, and investment into building a manufacturing economy that is not only competitive but indispensable. The data is encouraging. The foundations are in place. Now, what is required is execution. Manufacturing is the sector that bridges Oman's resource wealth with its developmental aspirations. The future is not only possible—it is being built now. Right here. Right in Oman.