Oman is shaping up its sovereign wealth fund, which is encompassing the stabilization and strategic mandates of its predecessors.

The Oman Investment Authority (OIA) was launched in June 2020 as a merger of the Oman Investment Fund and the State General Reserve Fund. The SGRF has been used largely as an oil revenue stabilization mechanism and to diversify the economy away from oil and gas in more than 25 countries worldwide. The OIF on the other hand was the successor of the Oman Oil Fund and invested in long-and medium-term projects at home and abroad.

The role of the OIA as a stabilization fund seems firmly entrenched. This week, Sheikh Nasser bin Sulaiman Al Harthy, Acting Vice Chairman for Operations of the Oman Investment Authority, said that OIA had contributed OMR5 billion (US$13 billion) to Oman's general budget since 2016 – implying that SGRF was included in the transfers.

This week, the OIA issued its Code of Governance to “further improve their operations, enhance performance, and align them with the sustainable development plans and strategic and economic goals in line with Oman Vision 2040.” The focus of the code is transparent and accountable decision-making and results. The emphasis is on an arms-length relationship with the government, with the OIA appointed as a shareholder in the companies and not as an entity of the government.

OIA has become increasingly active as an investor, both domestically and regionally. This week it announced a collaboration with US-based food company MycoTechnology to set up innovative food production in the country. The Vital Foods Technologies company will aim to produce alternative protein using dates from the country with the aim of enhancing food security, achieving national sufficiency and reducing date waste. The collaboration boosts OIA’s role in attracting foreign investment and building strategic partnerships.

OIA is also focused on regional infrastructure. In January, OIA signed an MoU to develop Malindi Tourist Port with the government of Zanzibar, an island territory that forms part of Tanzania and with which Oman has historical trading links. The MoU includes a feasibility study of a project to rehabilitate, develop and operate the port and develop the waterfront, as well as transfer commercial activities from the current port to the new Mangga Pwani port. Sami bin Abdullah Al Sinani, Senior Director of Logistics and Infrastructure Services at the OIA, said in a statement that the MoU aims to maximize the Sultanate of Oman’s benefit from China’s Belt and Road Initiative.

Oman has attracted interest from other strategic sovereign investors in the region, which could support OIA’s drive for strategic investment. In October 2021, Abu Dhabi’s Mubadala and ADQ representatives were part of a UAE delegation to Oman to discuss investments in technology and infrastructure. The visit came hot on the heels of a Kuwaiti delegation to Oman that included the Kuwait Investment Authority (KIA).

During the visit, the Acting Managing Director and executive director of the General Reserve at the KIA, Bader Al-Ajeel said: “Kuwait has a great interest in exploring the new investment opportunities in the Sultanate of Oman, and search for opportunities that contribute to the Authority’s interest in attractive returns… We attach great importance to our GCC partnerships, with the aim of creating a system of strategic security cooperation in important and vital sectors such as logistics and food security.”

Related funds OIA
Related tags Strategy Asset Allocation