Consulting industry of Oman grows steadily amid ongoing diversification

The management consulting industry of Oman continued its steady growth last year despite being one of the smallest of the GCC, with ongoing diversification efforts and moves toward energy privatisation and consolidation providing some of the market opportunities.

With lower oil reserves than all of the other Gulf states bar Bahrain, (which itself received a reasonable boost in just recent months), and an independent, politically neutral orientation, Oman is often considered the quieter outpost of the GCC. So too, its management consulting market; at just above $100 million last year out of a collective worth of $2.8 billion, Oman’s is the second smallest of the council.

Still, just a few years ago in 2014, before the crash in oil prices took full effect, Oman’s management consulting market was one of the shining lights – recording growth at a rate behind only that of Saudi Arabia at nearly 7% percent. When regional government spending dried up in the wake of the global oil price dive, the GCC consulting market contracted to 6% growth, with Oman dropping down to just 3.5% in 2015.

This year, the combined GCC management consulting market is tipped for 8% growth, following upward gains last year as the region’s governments backed in their economic diversification agendas – with the public sector consulting spend growing by 7.3% (accounting for close to a third of the overall market). Due to its relatively lower oil reserves, Oman has been tracking a steady, less dramatic path toward diversification for some time.

The Sultanate is now in its ninth five-year plan, an economic roadmap which sits alongside equivalent national transformation programmes across the GCC, with the Supreme Council for Planning preparing to release the first draft of Oman Vision 2040 by the end of the year. According to Deloitte figures from 2016, oil accounted for approximately 90% of Omani government revenues. This year’s budget forecasts oil at just 50% of revenues, with non-oil revenue projected to increase by 11%.

KPMG, which along with fellow Big Four firms PwC, Deloitte, and EY first established an office in the country in the early-to-mid 70s, summarised the 2018 Omani budget as ‘realising that diversification away from oil has to be pursued vigorously with the help of the private sector investment to contain the budget deficit.”

In addition to its pursuit of public-private partnerships and ongoing plans toward privatisation of state energy assets – with its electricity holding agency Nama recently appointing a consortium of privatisation advisors led by London Economics – the country has also been looking into integrating its refining and petrochemical industries; reportedly with the aid of McKinsey & Company, and with The Boston Consulting Group recently forwarding consolidation as an important strategic consideration for the petrochemical sector of the GCC.

While Oman has identified its cultural heritage and tourism as primary non-resource areas for development, with the new Muscat International Airport designed to cater to up to 48 million visitors per year through future expansions, and is keen to tap into technological and digital opportunities – most notably marked by the advanced regional cybersecurity centre unveiled by EY in the capital last year – the nation, like most of the GCC, is also focused of establishing its manufacturing and petrochemical refining sectors.

These various factors of Oman’s current economic landscape suggest a solid and steady rather than spectacular short-term for the management consulting industry in the country. Outside of the Big Four however, and a slew engineering consulting and energy sector firms, such as Seimens, which appointed 34 year-old Brazilian Claudia Massei as its country CEO this year, very few of the bigger management firms have a permanent primary office in Oman despite an active presence.