In order to alleviate the unprecedented financial crisis facing Oman as a result of coronavirus (COVID-19) pandemic, coupled with the sharp decline in international oil prices, the Ministry of Finance has announced a raft of measures.
Focused on reducing spending and budgetary allocations, the measures are expected to have a financial impact of RO1 billion, while on the revenue side the effect is estimated to be around RO300mn.
H E Darwish bin Isma’eel al Balushi, Minister Responsible for Financial Affairs, said that the world is currently undergoing an unprecedented economic and financial crisis. ‘The crisis is causing serious negative impacts on all countries of the world, without exception and at rates surpassing all predictions,’ he said.
In a statement to ONA, H E Balushi said that the slump in prices of Oman oil led to steep decline in the sultanate’s oil revenues, and this outstrips the government of its ability to finance programmes of development and social expenditure as allocated in the budget, besides exposing the finances to multiple risks.
The minister added that following decisions have been taken to alleviate the crisis:
– 10% reduction of current expenses of civil, military and security units.
– 10% reduction of liquidity allocated for the developmental budget.
– A minimum of 10% reduction in operational and administrative expenses of government companies.
– 50% reduction of subsidy allocated for government companies.
– 50% reduction of bonuses and privilege dues of boards of directors of public authorities, public establishments and companies.
– A minimum of 50% cut on financial provision for official missions at all civil, military and security units, as well as government companies.
– Negotiation with owners of real estate properties leased by the government for a discount in rent by at least 10%.
– Suspension of implementation of new capital projects of government departments and firms, in addition to rescheduling of existing obligations.
– Suspension of promotion and bonuses for all employees of government companies, irrespective of results of a firm or its performance.
– Suspension of all training courses and workshops planned abroad, as well as attendance (abroad) of conferences, exhibitions and expositions of civil, military and security units, as well as government companies.
– Suspension of exceptional bonuses for all employees.
– Suspension of all unnecessary ceremonies and activities, like annual celebrations and inaugural ceremonies.
– Giving priority to the private sector in works involving expansion or initiation of activities at government companies and enhancing the role of government-private sector partnership.
– Accommodating any new developments that might occur during this year within budget allocations, only by raising the efficiency of procedures of spending management, but without demanding additional financial allocations.