The Gap Between Economic Narrative and Economic Reality

In 2025, Oman’s economic conversation was shaped by future-facing ambition. Conferences in Muscat focused on artificial intelligence, fintech platforms, and green hydrogen projects. These sectors are important for long-term competitiveness, but recent GDP data points to a different source of near-term growth.

According to the National Centre for Statistics and Information, agriculture and fisheries delivered the fastest growth of any major sector in the second quarter of 2025. While industry, including manufacturing, mining, and electricity, expanded by just 0.2 percent, and services grew by 4.9 percent, agriculture and fisheries surged by 12.5 percent. In a single quarter, value added reached OMR 307.4 million, up from OMR 273.3 million a year earlier.

This outcome challenges the assumption that diversification gains must come from new or complex industries. Instead, it shows that Oman’s strongest momentum is coming from modernizing sectors it already understands well.

Why Food Production Is Outperforming Capital-Heavy Industry

The contrast with industry is instructive. Manufacturing and energy projects are capital-intensive, slow to scale, and exposed to global competition. They often require long development cycles before contributing meaningfully to GDP.

Food production operates under a different logic. Demand is stable, domestic consumption is guaranteed, and import substitution delivers immediate trade balance benefits. Investments in agriculture and fisheries also translate into output faster, because they rely more on logistics, processing, and coordination than on advanced industrial ecosystems.

In Oman’s current phase of diversification, this matters. The country is not short of ambition, but it is constrained by execution speed. Agriculture and fisheries offer measurable returns within policy timeframes.

Fisheries: From Natural Resource to Industrial Output

The strongest gains within the sector came from fisheries, not because more fish were caught, but because more value was retained. For decades, Oman exported fresh fish with minimal processing, effectively transferring margins to foreign processors.

That model is now changing. The Special Economic Zone at Duqm has become the anchor of a new fisheries industrial base. In late 2025, six major projects were launched within the Fisheries Industries Zone, focused on canning sardines and tuna, producing fish oil, and packaging processed fillets for export.

This shift matters because processing multiplies value. It creates skilled jobs, supports logistics and packaging services, and turns a volatile commodity into a predictable industrial input.

SME Integration and Income Stability in Coastal Economies

Industrialization has also changed how small-scale fishermen participate in the sector. Instead of selling catch at unpredictable prices on the shoreline, boat owners are increasingly integrated into structured supply chains that feed processing plants.

This integration has stabilized incomes and improved planning. Fishermen can invest in better equipment, cold storage, and transport because demand is contract-based rather than opportunistic. The result is higher productivity without increasing pressure on fish stocks.

What appears as sector growth in GDP figures is, in practice, a restructuring of how value flows through coastal economies.

Aquaculture and the Maturation of the Blue Economy

Growth is not limited to wild capture. Aquaculture has moved from pilot stage to commercial scale. In 2025, projects such as the white-legged shrimp farm in Ja’alan Bani Bu Ali, with investment of OMR 6.3 million, and intensive pond farming in Al Khuwaimah, valued at OMR 10.2 million, expanded or became operational.

These projects are run by specialized operators, but they depend on local SMEs for feed supply, maintenance, logistics, and transport. This creates layered economic activity rather than isolated corporate output.

Aquaculture also reduces exposure to environmental volatility and strengthens export reliability, which improves Oman’s positioning in regional seafood markets.

Agriculture’s Logistics Breakthrough and Import Replacement Strategy

Agriculture’s performance follows a similar pattern. Growth was not driven by expanding farmland, but by fixing bottlenecks that historically limited output. The launch of the Silal Fruit and Vegetable Central Market in Khazaen Economic City was decisive.

Silal replaced the outdated Mawaleh market with a centralized logistics hub offering 30,000 square meters of climate-controlled wholesale space and 90 refrigerated warehouses. For small farmers, this addressed the core problem of post-harvest loss and market access.

Shortly after opening, the market handled more than 26,000 tonnes of produce and received over 1,100 refrigerated trucks. This confirmed that production capacity already existed, but lacked infrastructure to reach buyers efficiently.

SMEs and the “Localizing the Second Billion” Policy Push

Policy alignment amplified these infrastructure gains. Through initiatives such as the Food Security Lab 2025 and the “Localizing the Second Billion” program, the government set a clear objective to replace OMR 1 billion in food imports with local production.

SMEs in hydroponics, poultry, and date processing benefited from preferential access to land, financing, and logistics support. The result was faster scaling of viable businesses rather than speculative ventures.

The 12.5 percent growth recorded in agriculture and fisheries is therefore not cyclical. It reflects targeted policy design combined with execution capacity.

Why This Model Fits Oman’s Economic Geography

Food production aligns well with Oman’s demographic and geographic realities. Agriculture and fisheries employ people in Al Batinah, Al Sharqiyah, Al Wusta, and other governorates that are often excluded from industrial growth corridors.

This disperses income geographically, reduces urban concentration pressure, and anchors economic activity close to natural resources. At the same time, every tonne of local produce or processed fish directly reduces the import bill.

Few other sectors deliver employment, trade balance improvement, and regional development simultaneously.

Implications for Vision 2040 Execution

The lesson for policymakers is not to abandon advanced sectors, but to recalibrate expectations. Technology and energy projects are essential for the long term, but they are not substitutes for grounded growth engines.

Agriculture and fisheries demonstrate what works when policy focuses on value capture, logistics, and SME integration rather than symbolism. Scaling these models offers a faster and more resilient path to diversification outcomes.

From Safety Net to Growth Engine

In 2025, Oman’s strongest non-oil growth did not come from laboratories or factories. It came from fishing boats, processing lines, greenhouses, and cold storage facilities.

The implication is clear. Food security is no longer a defensive policy. It has become a primary driver of economic performance.

As Oman moves toward 2030 and beyond, its most reliable diversification gains may continue to come from improving what it already does well, rather than chasing what it does not yet need.