Oman fund to secure revenue for future generations

The volume of foreign investments in the Sultanate’s State General Reserve Fund (SGRF) is increasing despite the fact that the size of the fund’s assets is not large compared with some of the GCC sovereign funds and other similar funds in the world. Established in 1980, the fund aims to achieve the government’s vision to support its efforts to secure revenue for future generations, increase returns on investment and strengthen Oman’s relations with other countries.

In the past few decades, it has entered into a number of investment projects, some of which have been successful. This is the nature of foreign investment with all countries.

Recently, the fund received the approval of the government of Tanzania to proceed with the project of the ‘Bagamoyo’ Special Economic Zone in accordance with the plan proposed by the group ‘ China Merchant’ International, where this approval is an important achievement of the partners of the project, which includes Oman, China besides Tanzania.

Negotiations are foreseen for the legal procedures that will include environmental studies, which will be followed by building tenders.

Data indicates the fund manages its investments to achieve the best possible long-term returns in several types of assets and economic sectors to form an investment portfolio extending in more than 27 countries around the world. The results show that the fund has achieved an average annual return of 7.5 per cent by the end of 2014.

Officials in the Sultanate have valued this partnership with Tanzania and the China Venture Group. “We would like to thank the government of Tanzania for entrusting us with the development of this project, and we highly value this partnership, which comes in light of the deep-rooted historical relations with Tanzania and as a strong testimony to the successful relations with the China Merchant Group,” stated Abdulsalam al Murshidi, Executive President of SGRF.

The project includes the establishment of a world-class seaport, to be developed in phases, comprising four berths, two of which are dedicated to containers, multi-use ladders and a fourth for support services.

The first phase of the port will be developed in parallel to the development of the supporting infrastructure of the project as well as the industrial zone associated with the port, while an additional area of 700 hectares will be allocated for subsequent stages.

For the free industrial zone related to the port, it will cover an area of 1,770 hectares, 70 per cent of which will be allocated to factories, workshops, warehouses and 30 per cent to transport, landscaping, water, energy, gas and telecommunications.

The fund’s strategic asset allocation plays a key role in achieving long-term returns through investments of diversified assets. The fund has a vision to respond to any developments that may occur in the global financial markets or to change economic expectations quickly and flexibly through its strategy Research.

This can be implemented through the adoption of a methodology that includes the study of global trends, the attractiveness of markets and the purpose of decisionmaking in the event of any good investment opportunity.

The fund operates within a set of controls, by investing in assets denominated in free currencies, negotiable in the form of gold, deposits or securities issued by governments or private institutions with a strong financial reputation. No funds may be withdrawn from the fund except for the purpose of budget financing.