The Oman Ministry of Finance (MOF) will reduce its public debt by more than RO 2.85 billion (US$ 7.4 billion) by the end of April 2022 as part of its Debt Management Strategy. A further initiative of the MOF is to minimize the fiscal deficit and shrink the public debt portfolio’s cost and risk by using surpluses (from the uptake of oil prices average rates).
Budget 2022 allocated RO 1.3 billion for loan interest refunds, but did not affect a commitment to repay maturing premiums of RO 2.7 billion. According to the MOF, steps are under way to tap other fiscal surpluses to boost economic growth in line with His Majesty Sultan Haitham bin Tarik‘s directives. The focus is on implementing more private sector-related development projects, including by enhancing the Development Budget’s allocation to RO 1.1 billion.
At the end of March 2022, the MOF repaid debt of RO 1.49 billion (US$ 3.88 billion), including the repayment of a loan facility worth RO 850 million (US$ 2.2 billion) prior to its maturity. Further, the MOF will prepay the RO 1.365 billion loan (US$ 3.55 billion) in April 2022. It is part of the government’s efforts to reduce public debt, which is expected to reach RO 19.46 billion by the end of April 2022.
A loan facility agreement worth RO 1.55 billion (US$ 4 billion) was recently settled by the MOF as part of its liability management efforts. A group of 26 local, regional, and international financial institutions provided the loan. As a result of the market’s validation of Oman’s fiscal reform initiatives and active debt management, the loan was oversubscribed by more than 150%. This was despite significantly tightened pricing inside the Oman curve.
Various international institutions and rating agencies expressed increased confidence in fiscal performance after the Government adopted fiscal consolidation measures. MOF plans to use the surplus due to higher oil prices to reduce budget deficits and public debt. This affirms that the government is in a better position to handle outside shocks. As a result of low interest rates on financing as well as increased engagement of financial institutions, the Sultanate of Oman has made significant progress at achieving its national goals, the MOF noted.