Oman’s economy was mostly based on professions like agriculture and good trading but with the discovery of oil reserves in the 60, about two-fifths of the national economic contribution is made from oil revenues. After many years of heavy reliance on oil turnovers, the demand declined followed by production and price drop. The focus shifted from oil to natural gases gradually to distribute revenue load and reliance. Other main industries in Oman are chemicals, cement, optical fibres, construction, copper and steel.
Oman benefited heavily with its oil reserves since 2004 but the combination of the OPEC production cut agreement and the decrease in consumption had pulled down the benefit in 2019. With the unexpected outbreak of Covid-19 in 2020, the oil market saw a decline like never and left the country’s economy in a serious downfall. There are other sources of revenue, but they have been minimal, impacted by the pandemic and not large enough to compensate for the lack of oil revenues. The real GDP is predicted to shrink by 5% this year despite the wave of global economic recovery measures. Many aspects have been affected, such as high inflation, increased government debt and hence an overall decrease in growth.
To decrease dependence, Oman is looking at financial, port and tourism sectors to diversity its revenue generation and liberalise the economy. It will also promote trade and investment for future diversification. The new combination is predicted to contribute to two-third of the national economy in the coming years. As for the IT sector, optical fibres is also a primary industry in Oman but the economic shock in 2020 is weighing heavily in terms of IT investment and hardware being a saturated market.
To support the momentum of the market in times of recovery, the IT sector is looking at infrastructure expansion, logistics development, integration into the government and tourism sectors. Looking at the stats, Oman has the use of smartphones is highest in the country among GCC which has helped the growth of e-commerce but surprisingly only 8% of this mobile using population is making e-purchases, that too from outside the country. There are market opportunity and scope of growth. All that remains is to explore and develop into the available space.
As the economy diversifies, 2021 and forward has a better outlook for the IT industry as other verticals are being expanded into. The nation is taking positive and active steps to minimize the risk factor is future economic decline situations. The current foundations are being steadily built which will help them stand strong in the long term.