Latest news with #FutureGenerationFund
Observer
3 days ago
- Business
- Observer
Oman's strategic edge: a new era of sovereign investment
In today's fast-moving global economy, Sovereign Wealth Funds (SWFs) have become more than just financial investors. These state-owned investment vehicles are now key tools for a nation's economic development, helping to build strong economies and secure a prosperous future for their people. SWFs serve three vital roles: stabilizing the economy, saving for future generations, and supporting national development. For countries like Oman that rely on oil and gas, SWFs are a vital safeguard against unpredictable price swings, ensuring the government has a steady budget. They also act as a savings account, turning wealth from non-renewable resources into a diverse, long-term portfolio of assets that will benefit future generations. By following international standards for good governance and transparency, SWFs can operate with the confidence needed to make a real impact. Globally, these funds manage assets exceeding $13 trillion. They are major players in global markets, directing investments toward sectors that align with their countries' strategic goals, like technology and renewable energy. This shows a smart shift away from just seeking financial returns to building national resilience and local supply chains. In the GCC, SWFs are crucial for driving national change. Saudi Arabia's Public Investment Fund (PIF), for example, is a central force behind its Vision 2030, funding huge projects in new cities and future industries. Similarly, in Oman, this role is perfectly fulfilled by the Oman Investment Authority (OIA). Since its creation in 2020, the OIA has acted as a guardian of Oman's wealth, with a clear mission to support the national economy and foster an investment environment aligned with Oman Vision 2040. The OIA isn't just an investor; it is a primary driver of the nation's development plan. The OIA's impact has been both significant and widespread. Since 2016, it has provided more than RO 7 billion to the state budget, acting as a financial partner and a buffer against economic shocks. Its efforts to reduce debt for its companies and lower government guarantees have been key to improving Oman's credit rating and returning it to an investment-grade status. The OIA's strategy is carefully guided by Oman Vision 2040. Its investment portfolios—the National Development Fund, the Future Generation Fund, and the new Future Fund Oman (FFO)—each have a specific purpose. The FFO, with its RO 2 billion capital, is a clear sign of Oman's commitment to boosting the private sector and speeding up economic diversification in key areas like logistics, mining, tourism, and clean energy. One of the OIA's most impressive strategies is the "Omani Angle." This approach ensures that every international investment—particularly through the Future Generation Fund—delivers tangible benefits back to Oman. This could mean attracting foreign capital, bringing new technology to local companies, or setting up regional offices in the Sultanate. For instance, the OIA's investments in US companies like Sense Lab and Gradiant have directly helped bring smart energy and water treatment technologies to Oman, building local expertise and addressing national challenges. The OIA is also a leader in developing human talent, which is vital for any knowledge-based economy. In 2024 alone, it created 1,393 new jobs for Omanis, bringing the Omanisation rate across its companies to an impressive 77.7%. Programs like "Nomou" and "Mutamad" are designed to equip young Omanis with the skills needed for a diverse economy. This shows that the OIA is not just managing money, but also building the workforce of the future. Its support for local businesses is equally important, with spending on SMEs reaching RO 265.5 million in 2024. The authority's program of selling assets has successfully attracted over RO 1.5 billion, invigorating the private sector and attracting foreign investors by reinvesting capital into new projects. For Oman to achieve even greater things in the next decade, we must build on these strong foundations. The path forward for the OIA calls for continued momentum and even tighter alignment with Vision 2040, focusing on five key priorities. First, keep governance world-class. Transparent reporting, clear risk limits, and arm's-length decision-making are not just technical requirements; they are the foundation of public trust and lower the cost of capital with international partners. Oman should continue to align its disclosures with the Santiago Principles and global ESG norms, reinforcing its reputation as a credible and reliable investment partner. Second, scale what works. The Future Fund Oman should continue to favor export-earning, high-productivity projects with strong local content. This includes advanced manufacturing, green hydrogen, downstream metals, logistics, and digital infrastructure. By using rigorous project preparation and independent investment committees, the fund can ensure every investment creates maximum value. As assets mature, the OIA can recycle capital faster through structured sales and listings, broadening local ownership and deepening the Muscat Securities Exchange. Third, pull in global partners. The OIA's credibility can be used to invite top-tier international firms to base their regional operations in Oman. This "platform builder" model, where the OIA co-invests and provides long-term support, reduces risk for first-movers and builds pipelines of technology, talent, and trade, directly linking Oman to global value chains. Fourth, put people and SMEs at the center. To ensure that diversification benefits everyone, annual targets for quality jobs, Omanisation, SME spending, and supplier development should be set for every company in the OIA's portfolio. Publicly reporting on this progress will keep the diversification journey people-first and measurable, reinforcing the social contract that underpins the fund's work. Finally, treat economic diplomacy as a portfolio strategy. By expanding sovereign-to-sovereign partnerships, co-investment memorandums, and specialized funds with like-minded investors, Oman can amplify its voice and open new markets for Omani firms. This strategic approach ensures that every international relationship serves a clear economic purpose, creating opportunities for collaboration rather than competition. The lesson from the world's best SWFs is simple: respect the past, invest for the future, and let transparent institutions do their important work. The OIA has already made great progress—growing assets, supporting the budget, creating jobs, and opening doors abroad. The next decade will require more of the same, but on a bigger scale: larger partnerships with global companies, deeper local supply chains, faster reinvestment into strategic industries, and a firm commitment to the Santiago Principles. By staying on this path, Oman's sovereign capital will not only protect national wealth but will also help write the next chapter of our diversification story—with confidence and in a way that is worthy of the generations to come.
Bloomberg
20-05-2025
- Business
- Bloomberg
Nigerian Sovereign Fund Boosts Exposure to Asia, European Assets
By , Jennifer Zabasajja, and Joumanna Bercetche Save Nigeria's sovereign wealth fund reduced its exposure to the US at the beginning of this year and bought other investments to diversify its portfolio. The fund, which had 4.42 trillion naira ($2.76 billion) under management as of December, reduced the exposure of its Future Generation Fund to US markets and bought more Japanese, Australian and European assets, Umar-Sadiq said in an interview with Bloomberg TV on the sidelines of Qatar Economic Forum in Doha on Tuesday.
