Overview
Physical infrastructure underpinning Oman’s financial services sector spans transport networks, utilities, industrial zones, and specialised facilities. The government has committed significant capital to infrastructure development, with the national infrastructure pipeline valued at over USD 50 billion across all sectors. For financial services specifically, infrastructure investment of OMR 32 billion total banking assets targets capacity expansion, connectivity improvement, and modernisation of existing assets.
Key Indicators
| Infrastructure Element | Current Status | 2040 Plan |
|---|---|---|
| GDP Contribution | ~6% | 10%+ by 2040 |
| Banking Assets | OMR 32B | OMR 55B+ by 2040 |
| Islamic Banking Share | ~15% | 25% by 2040 |
Analysis
Infrastructure quality and availability significantly determine the competitiveness of Oman’s financial services sector. The Sultanate’s geographic advantages (3,165 km coastline, strategic location between Asia and Africa) are leveraged through purpose-built infrastructure. Bank Muscat, BankDhofar, National Bank of Oman, Alizz Islamic Bank, CMA, CBO benefit from dedicated industrial zones, port access, and utility connections. However, infrastructure gaps persist in secondary cities and remote governorates, creating geographic disparities in sector development. The Oman Rail project (2,200 km) and road expansion programmes will enhance connectivity, while digital infrastructure (5G, fibre) enables technology-intensive operations.
Challenges
Infrastructure financing gaps, construction delays, maintenance backlogs, and geographic dispersion increase costs. Limited capital market depth, low equity market liquidity, conservative lending culture, nascent fintech ecosystem, regulatory fragmentation between CBO and CMA, and high NPL ratios in SME lending (~8 percent).
Opportunities
PPP models for infrastructure delivery, modular construction approaches, smart infrastructure integration, and cross-sector infrastructure sharing reduce costs and improve utilisation. Islamic finance expansion, fintech sandbox and digital banking licences, insurance penetration growth (currently ~1.5 percent of GDP), green bonds and sukuk, pension fund reform, and regional wealth management hub potential.
Vision 2040 Targets
Increase financial services GDP share to over 10 percent; double insurance penetration; grow Islamic banking to 25 percent of assets; launch a digital riyal CBDC pilot; maintain 92 percent+ Omanisation.