8th Five-Year Plan (2011-2015)
Oman’s growth during its Renaissance Period (1970- ) is based on well prepared and organized 5 year plans aiming at different areas of growth, according to the strategic choices and plans of the Omani Government.
The government plans to spend a massive RO42.71bn during the Eighth Five-Year Plan period (2011-2015) in the sultanate with a thrust on infrastructure development, education and health sectors.
The eighth plan unveiled by H E Ahmed bin Abdulnabi Macki, Minister of National Economy and Deputy Chairman of the Financial Affairs and Energy Resources Council on January 2, 2011 is the fourth within the framework of the long-term development strategy (1996-2020) of Oman.
The plan’s fiscal framework has been formulated to support the stability and growth of the economy, according to the Ministry of National Economy. The plan strives to enhance economic diversification by focusing on development of sectors such as tourism, industry, agriculture and fisheries. To achieve this, the plan has adopted a group of sectoral objectives, policies and mechanisms. Accordingly, non-oil activities are expected to grow at an annual rate of about ten per cent at current prices and six per cent at constant prices.
The plan aims to further the role of the private sector in the economy by stimulating domestic and foreign private investments thus raising the sector’s share in GDP and employment generation for national workforce. In order for this is to be achieved through the development of SMEs, offering better investment opportunities and environment, financing the private sector and a continued focus on the development of infrastructure.
The Eighth Five Year Plan has a strong focus on enhancing and developing human resources. The plan aims to widen the provision of work opportunities for national workforce and is expected to provide between 200,000-275,000 new employment opportunities during its period with 40,000-55,000 opportunities as an annual average.
Priority is given to social services in allocation of government expenditure. The total government expenditure on education and health sectors is expected to scale up to 55 per cent and 88 per cent respectively compared to the Seventh Five Year Plan.
Preliminary forecasts indicate GDP growth during the plan period at an annual average rate of six per cent at current prices and five per cent at constant prices. The inflation rate is expected to remain at an average of four per cent for the plan period.
Oil revenues are based on the forecasted increase of the annual average of oil production rates to 897,000 barrels per day and US$59 as average price per barrel for the plan period. Other revenues are estimated in light of the outlook on development of the main factors that define each item.
The annual average of total government revenues has been estimated at RO7.50bn for the plan period. The annual average of the public expenditure for the plan period is estimated at RO8.54bn. The annual average deficit of the general budget for the plan period is estimated to be RO1.04bn and its ratio to total revenues at 13.9 per cent.
There is a move to accelerate the pace of implementing the strategies of the Oman Digital Society and scientific research. For support of development in general, the plan aims to develop and raise the efficiency of the State’s administrative apparatus and upgrade the statistical work. Funding for the new government projects for the plan period will not be limited to the projects included in the development programme but also include the financing of new projects for other sectors. The total cost of projects that the government will finance outside the framework of the development programme is estimated at RO8.8bn.
During the plan period, under the investment expenditure item in the State General Budget, the government will fund projects at a total cost of RO6.6bn. Of these RO3.20bn will be as investment expenditure for oil production and RO3.41bn as investment expenditure for gas production. The total cost of the projects that will be financed by the government during the plan period under the participations item in the State General Budget is estimated at RO2.2bn. Of these, RO566mn is for financing the projects of Oman Company for Tourism Development, RO800mn to finance the government energy companies working in electricity transport and water distribution and electricity supply and RO87mn to fund projects of the Oman Sewage Company and Salalah Sewage Company.
The final approvals for new projects are estimated at RO5.6bn and the ongoing projects expected to be carried forward from the seventh plan at RO6.4bn. The total estimates for both new and ongoing projects will amount to RO12bn compared to RO3bn as actual approbations for the seventh plan. The average growth rate of development for the seventh plan is expected to be 6.3 per cent.
Despite the global financial crisis and its repercussions, theperformance of the seventh plan was satisfactory. Inflation, which reached 12.4 per cent in 2008 due to external factors, has reduced to 3.5 per cent at the end of the seventh plan period.
Major projects that will be implemented during the eighth plan
Eighth Five-Year Plan Highlights