Gap Alert: Manufacturing GDP Share

Gap Alert: Manufacturing GDP Share

Severity: AMBER

Manufacturing accounts for approximately 10 percent of GDP, below the Vision 2040 aspiration of 15 percent by 2030.

Gap Analysis

Oman’s manufacturing base is dominated by refining, petrochemicals, and basic metals, all closely tied to the hydrocarbon value chain. Diversified manufacturing including food processing, building materials, and automotive components remains small-scale and fragmented. The Duqm and Sohar industrial zones are attracting investment but most projects are still in the construction or early operational phase and have not yet contributed fully to GDP.

What Needs to Change

Shift from enclave-based heavy industry to integrated manufacturing ecosystems with local supply chains. Develop industrial skills through specialised training institutes co-located with industrial zones. Reduce the cost of industrial utilities including electricity and gas feedstock to internationally competitive levels.

Risk Assessment

Amber severity. Manufacturing is essential for job creation, export diversification, and economic complexity. The gap is closable through the Duqm and Sohar project pipelines, but execution risk is high and timelines may slip.

Recommended Interventions

Key interventions: establish an Industrial Development Bank to provide long-term project finance; create plug-and-play factory shells in industrial zones to reduce entry barriers; negotiate preferential trade access for manufactured goods through FTA negotiations; launch an Oman Made brand and procurement preference programme; and develop a petrochemical downstream master plan to capture more value from feedstock advantages.

This gap alert is issued by the Oman Vision 2040 Research Unit and is updated quarterly. Severity levels: GREEN (on/ahead of track), AMBER (gap widening but recoverable), RED (structural gap requiring urgent intervention). Data sources include NCSI, World Bank WGI, IMF, and relevant international indices.