The Outer

The logistics sector…a pillar of economic diversification in the Sultanate of Oman

By Manal Abdel Fattah

The logistics sector in the Sultanate of Oman, represented by transportation and warehousing activities, achieved good growth during the past year, and its contribution to the gross domestic product of the Sultanate of Oman increased to 5.7 percent, equivalent to 1.8 billion Omani riyals of the gross domestic product, which recorded 31.4 billion Omani riyals at the end of the third quarter. From 2023.

On a quarterly basis, transportation and storage activities achieved a growth of 2.7 percent during the third quarter of 2023, and their contribution increased to about 646 million Omani riyals during the aforementioned quarter, compared to 629 million Omani riyals during the same period in 2022, while the contribution of transportation and storage activities to the gross domestic product was The total for the Sultanate of Oman during the entire year 2022 has achieved about 2.3 billion, at a rate equivalent to 5.2 percent of the gross domestic product for the year 2022, which amounted to 44 billion Omani riyals, evaluated at current prices.

Land transport and warehousing activities are the main source of momentum for the growth of the logistics sector in the Sultanate of Oman, which aims to enhance the various growth streams in the sector, especially air transport, and stimulate new streams, including e-commerce, with continuous efforts to support the infrastructure and raise the quality of services in the sector.

The Sultanate of Oman places the logistics sector as a fundamental pillar of growth during the Tenth Development Plan 2021-2025, and the economic directions of the Tenth Plan work to develop the sector by attracting investments, expanding local supply chains, enhancing infrastructure and connectivity between airports, ports and roads, and continuous development in services.

The Sultanate of Oman aims to transform into a global logistics center and enhance its position on the global trade map by taking advantage of its strategic location that mediates the global trade movement, the significant growth achieved by the sea ports sector and land transport activities, the expansion of new investments in all free and industrial zones, and a promising growth of investments in economic entities that enhance The logistics sector, including Khazaen Economic City.

The logistics sector has received many initiatives since the start of the implementation of the Tenth Plan, and efforts and initiatives accelerated over the past year, as last October, workshops and clinics were held to attract investment in the transport and logistics sector, which focused on the challenges facing the transport and logistics sectors, proposed solutions to them, new investment opportunities, and raising rates. Investing and increasing the attractiveness of work in the sector for Omani cadres, improving the Sultanate of Oman’s ranking in the Logistics Performance Index, and enhancing its global logistics position. The most important outcomes were identifying 27 investment opportunities in the logistics sector, and working to develop plans for 6 enablers to improve performance.

The Ministry of Transport, Communications and Information Technology aims to raise the volume of investments in the sector during the tenth plan to 2.5 billion Omani riyals, and to achieve the investment targets in the sector, the executive program for the Oman Logistics Center 2023-2025 was announced last year to increase the value of investments and economic diversification in the transport and logistics sector, and the executive program aims Areas including the private sector, investment and international cooperation, economic diversification and financial sustainability, the field of the labor market and employment, and the governance of the state’s administrative apparatus, resources and projects; It aims to increase the value of investments in the transportation and logistics sector from 1.5 billion Omani riyals in 2023 to 2.5 billion Omani riyals in 2025.

In the logistics sector, the growth of the sector is linked to an increase in revenues and fees from major sector activities such as land and air transportation, communications and other activities. In the labor market, the growth of the logistics sector offers opportunities to increase the number of direct and indirect jobs, as well as promising projects for young people in various logistical activities. Empowering medium and small enterprises in this sector is a main goal in the Sultanate of Oman, which has launched important initiatives to develop the capabilities of local suppliers, provide a supportive environment for business growth, promote products, and localize innovative industries.

Last week, the Council of Ministers adopted the “National Policy for Local Content (2024-2030 AD). )», which aims to create a national system responsible for organizing and monitoring local content in all sectors, with the aim of providing job opportunities for citizens, localizing industries, developing and adopting entrepreneurs, and encouraging small and medium enterprises and emerging companies. It is expected that the national policy for local content will contribute to enhancing the growth of many activities and sectors, including the logistics sector, by enhancing the activities of entrepreneurs in the sector and increasing the volume of non-oil exports to the Sultanate of Oman in light of the increasing support for national industries and Omani products and their replacement of imports.

It is noteworthy that, according to regional and international classifications, the port sector in the Sultanate of Oman ranks highly in many international indicators, including first place in the world in the speed of handling container ships, and the Port of Salalah also achieved second place among the most efficient container ports in the world, and in the performance services index.

Last year, the Sultanate of Oman’s infrastructure index ranking rose to 47th place internationally, and it ranked 53rd in the logistics services quality index. The customs clearance index also improved to 47th place, and the shipment tracking quality index rose to 20th place.

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