Exports increase enhances diversification plan
MUSCAT: The export sector posted a good growth rate in 2017. The sector, which is one of the key drivers of economic diversification, can create fresh job opportunities, attract foreign investments, provide the healthy milieu for the growth of local investments and curb the balance of payment deficit. The statistics point out that the value of exports during last year increased to RO 12.6 billion compared to RO 10.3 billion in 2016; a growth by 22.7 per cent.
The value of oil and gas exports stood at RO 7.3 billion or 58.1 per cent of the total value of the commodity exports in 2017 supported by the increase in Omani crude oil price whose average stood at $ 51.3 per barrel compared to $ 40.1 per barrel in 2016.
The non-oil exports posted higher growth rates (32.4 per cent) to hit RO 3.1 billion compared to RO2.4 billion in 2016; the best growth rate during the past three years.
The value of re-export products hit RO 2.1 billion, an incline by RO 52.7 million over their level in 2016.
The major non-oil Omani exports include chemical industries, metal and plastic products, tools, electrical appliances, transport equipment and others.
The industrial sector is one of the key sectors for the growth of the national economy. The current five-year plan focuses on enhancing the growth of the industrial sector especially the manufacturing industries, the major source of export products.
As per the statistics of the National Centre for Statistics and Information (NCSI), the GDP of the manufacturing industries grew by 8.7 per cent in 2017 to RO 2.8 billion, compared to RO 2.4 billion to constitute 48.4 per cent of the GDP for the industrial activities whose value stood at RO 5.5 billion.
A number of industrial projects are under way and are expected to increase the Omani non-oil exports. About RO 11.2 billion worth projects are under way including Duqm Refinery and the crude oil storage terminal in Raz Markaz, the Chinese Industrial City, Sebacic Refinery, the Bus and Auto Assembly Factor, two cement plants, fish processing plants and others as well.
At the Sohar Port Industrial Zone, Orpic completed last year the Sohar Refinery Improvement Project (SRIP), which aimed at maintaining public health and environment by reducing emissions and recycling industrial waste-water in Sohar Refinery.
The project will enhance the efficiency of the refinery operations, increase the production of naphtha, which is used as feedstock for aromatic plant. It will also reduce the naphtha imports from 70 per cent to 30 per cent. It will also increase the production of polypropylene, which will be used to supply the needs of the polypropylene plant instead of importing. The project will also produce tar for the first time in the Sultanate.
A land usufruct agreement was signed last year with one of the leading Indian manufacturing company that will invest $ 300 million to set up a plant that will produce 100,000 of cotton thread, which will be exported to textile plants abroad.
The value of investments at the industrial estates managed by the Public Establishment for Industrial Estates (PEIE) increased to about RO 6.3 billion.
The opening of the new Muscat International Airport, Al Batinah Expressway and the implementation of a number of projects in Duqm, Salalah and Sohar Ports will give momentum and thrust to the exportbased industries.
The experiences of many countries around the world point out that the growth of export sector contributed to creating new job opportunities and helped in reducing the number of jobseekers. The growth of the export sector contributed as well to reducing the deficit of the balance of payment as export is one of the key sources for attracting foreign currency.
The current five-year plan focuses on enhancing the growth of the industrial sector especially the manufacturing industries, the major source of export products.