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The April 6 event connected Omani and U.S. companies with information on Oman’s new economic stimulus plan and answered questions from U.S. investors interested in Oman

 

MUSCAT, OMAN: On April 6th, the Oman American Business Center (OABC) hosted a Virtual Majlis with Oman’s Minister of Commerce, Industry, and Investment Promotion, H.E. Qais Al Yousef.

The session presented a unique opportunity for members of the OABC to engage and ask specific questions to better understand the vision and future plans of MOCIIP.  His Excellency Qais Al Yousef discussed incentives for foreign investors and other key information about how the plan will impact the future and Oman’s Vision 2040. The session also addressed business continuity and steps to mitigate the challenges faced by companies due to the pandemic.

OABC President and Chairman Ali Daud opened the session and thanked the official guest of honor: U.S. Ambassador to Oman, Leslie Tsou, before introducing His Excellency and the session’s moderator, OABC Board Member and Treasurer, William Crew of Inspired Solutions.

OABC compiled a list of questions received from its member companies, and during the event, executives were also given the opportunity to ask questions directly via chat.

“We commend His Excellency’s willingness to sit down together and engage with questions from the business community,” says Daud. ”We trust that this first virtual majlis may pave the way for more interaction, discussion, and future sessions between the public and private sectors within Oman.  We would also like to thank our partner, the Bilateral US-Arab Chamber of Commerce, who supported the invitation of their membership as well to this event.”

 

“It is notable that in spite of, and even because of, the difficult and unique situation the world is facing today, U.S. companies can learn about what Oman has to offer through an online platform rather than physical travel,” continues Daud. “We hope that new opportunities and connections will be made through these efforts and initiatives during this time, as well as the future, as Oman moves towards its Vision 2040.”

 

As the official affiliate of the US Chamber of Commerce in Oman (AmCham Oman), the OABC promotes understanding, partnerships & other matters of mutual economic interest between business communities in Oman and the United States.

 

Formed in 2003, the OABC’s mission is to foster the development of commercial activity between Oman and the United States.  With 30 events annually and over 160 member companies, OABC is Oman’s most active business council and networking group.

 

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In line with its mission to foster the development of trade and commercial activity between Oman and the United States, the Oman American Business Center (OABC) hosted an informational webinar on March 3, entitled ‘Introduction to the Export-Import Bank of the United States (EXIM),’ in partnership with the U.S. Embassy
Muscat.

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The session featured opening remarks by OABC Vice President Fouad Eid, H.E. Asila bint Salim al-Samsami, Undersecretary of the Ministry of Commerce, Industry, and Investment Promotion, and U.S. Ambassador Leslie Tsou, followed by a presentation by Rick Angiuoni, Business Development Specialist and Regional Director of Africa, EXIM.

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Mr. Angiuoni discussed the International Buyers Program, with loan guarantees and direct loans for international companies, long-term financing of up to 14 years, and details on accessing specific opportunities. He also led the Q + A.

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If you were unable to attend or would like to review the session, please find the full recording here and the presentation here.

Rick also expressed his willingness to be contacted by members, so please save his address for your records: rick.angiuoni@exim.gov.

 

What is EXIM?

The Export-Import Bank of the United States (EXIM) is the official export credit agency of the United States. EXIM supports the purchases of US-made capital equipment and ancillary services by creditworthy international buyers that cannot obtain credit through traditional trade finance sources. EXIM offers trade financing solutions and helps turn business opportunities into real transactions.
EXIM does not compete with private-sector lenders but provides financing products that fill the gaps in trade financing. It assumes country and credit risks that the private sector is unable or unwilling to accept. EXIM also helps to level the playing field for U.S. companies by matching the financing that other governments provide to their exporters. In more than 85 years of operation, EXIM has supported more than $400 billion of U.S. exports to international markets.
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As the COVID-19 pandemic continues to impact Oman and the region, The National Detergent Company (NDC), the maker of the best detergent brand Bahar, supported the country and the community by introducing a range of innovative and convenient COVID fighting products.

NDC’s COVID fighting product portfolio includes Farah Hand Sanitizer Pocket Spray, Farah Hand Sanitizer Gel, Bahar Premium Antiseptic Liquid, Bahar Antimicrobial Disinfectant Spray, Bahar Gold Multipurpose Disinfectant and PInex.

Farah Hand Sanitizer Pocket Spray, a next-generation hand sanitizer that provides enhanced germ-killing power while being skin-friendly, can be carried in your pocket and offers protection and safety on the go. Farah Hand Sanitizer Gel range – 20ml, 80ml, 270ml, 500ml, 5Ltr, was approved by Oman’s Ministry of Health in the initial stages of COVID -19.

Today, a much sought-after product among consumers in the Sultanate, Farah hand sanitizer contains 70% ethyl alcohol and can kill 99.99% of harmful germs. The hand sanitizer is ideal for corporates, institutions, hospitals, individuals, families and frontline healthcare workers.

NDC’s Bahar Premium antiseptic disinfectant, which provides all-round family protection against germs, has also received the approval from Oman’s Ministry of Health. The disinfectant liquid which is ideal for personal and household cleaning purposes kills 99.99% of germs.

NDC’s other wellness and hygiene products in the laundry, personal and home care segments include Bahar Powder detergent, Bahar Liquid Detergent, Bahar Premium Dishwashing Liquid, Bahar Clean, D’zire antibacterial soap and Farah anti-bacterial hand wash liquid.

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The US Department of State Investment Climate Report on the sultanate released last week applauds Oman for continuing to improve regulatory frameworks to establish an economic climate conducive to foreign investment.

The report highlights Oman’s smooth transition of power in January, which reassured investors of the country’s political stability, and the country’s focus on ports, free trade zones, and logistic hubs as promising developments.

The US Department of State released the 2020 Investment Climate Statements on 165 foreign markets on September 9.

‘Oman is taking steps towards making the country a more attractive destination for foreign investment. However, to improve the country’s overall investment climate substantially, the government will need to lessen its dependency on oil, and open up key sectors to private sector competition and foreign investment. These measures have a renewed sense of urgency in the wake of the dual crises of the oil price collapse and the COVID-19 pandemic,’ stated the report.

Oman touts its geographic advantages and interest in attracting foreign direct investment (FDI) in key sectors. It is located just outside the Arabian Gulf and Strait of Hormuz, with proximity to shipping lanes carrying a significant share of the world’s maritime commercial traffic and access to larger regional markets. ‘Oman’s most promising development projects and investment opportunities involve its ports and free zones, most notably in Duqm, where the government envisions a 2,000sq km free trade zone and logistics hub at the crossroads of East Africa and South Asia.’

The report added that Oman promulgated five new laws in 2019 to promote investment – the Public-Private Partnership Law; the Foreign Capital Investment Law (FCIL); the Privatisation Law; the Bankruptcy Law; and the Commercial Companies Law.

‘Oman’s long awaited FCIL holds particular promise for removing minimum share capital requirements and limits on the amount of foreign ownership of an Omani company.’

‘His Majesty Sultan Haitham bin Tarik’s smooth accession following the passing of the late H M Sultan Qaboos bin Said in January 2020 showed Oman’s political stability, reassuring many investors,’ the report said.

Retrieved from: https://muscatdaily.com/Oman/388006/US-applauds-investment-climate,-stability-in-Oman-

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Retrieved from: https://muscatdaily.com/Oman/387868/His-Majesty%E2%80%99s-promotion-of-economic-freedom-praised-

The Heritage Foundation, a US-based research organisation formulating public policies, has praised the efforts of His Majesty Sultan Haitham bin Tarik in promoting economic freedom for the sultanate, modernising the economy and strengthening relations with the United States.

In a report published in The Daily Signal, an American political media news website, Anthony B Kim, research manager and editor of the Index of Economic Freedom, at The Heritage Foundation, said that Washington currently has a unique opportunity to build on the existing good relations with the sultanate and reaffirm it as a reliable partner in dealing with the many challenges facing the Middle East.

About the economy, the report stated that it is notable that Oman is the sixth-freest economy in the Middle East and North Africa region, according to the Heritage Foundation’s latest edition of the annual Index of Economic Freedom.

The country’s overall economic freedom score has increased by 2.6 points from last year, with significant improvements in all areas related to the rule of law.

‘As a moderately free economy, Oman’s economy has been undergoing modernisation and liberalisation, albeit gradually,’ it added.

‘Recognising the importance of developing a dynamic entrepreneurial environment, the government has acted to diversify economic activity and stimulate broader-based development. An effort is underway to develop a new bankruptcy and insolvency law, which would help to improve the country’s business environment and increase foreign direct investment inflows.’

Kim further said that such improvements in economic freedom would aid the government’s efforts to develop the economy beyond the oil sector more rapidly, positioning Oman as an even more valuable trading partner for the United States and others, and increasing the country’s standing and influence in the region.

‘Washington’s renewed good relations with Muscat will benefit not only the US, but other partners in the region as well, as the two longtime partners move forward together,’ he wrote.

The US is one of Oman’s largest trading partners, exporting about US$2bn in goods to Oman and importing around US$1bn in goods from the sultanate.

The first contact between the US and Oman was in 1790, and the relationship became formalised in 1833 with a Treaty of Amity and Commerce, the first bilateral trade deal between the US and an Arab Gulf state. In 1840, Oman sent the first accredited diplomat from the Arab world to the US.

‘Continuing that unique, long-established relationship with America, Oman has been a more strategic partner of the United States since 1980, when it became the first Gulf state to sign a formal accord permitting the US military to use its facilities.’

The US-Oman free trade agreement – the sultanate’s only bilateral trade agreement – was signed in 2006, and since then, it has led to increased partnerships between Omani and US companies in a broad range of industries, not limited to energy.

 

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An interview with Peter Price, Vice President of Oman Operations at Hill International

  1. Can you please tell us more about Hill International?

Hill International (Hill) is an international construction consulting firm that provides program and project management, construction management, and risk management to clients involved in major construction projects worldwide. Hill is also recognized as a global leader in fully integrated facilities management (FM) services for over a decade. Hill has participated in over 10,000 project assignments with a total construction value of more than $500 billion. Hill is ranked as the 8th largest construction management firm in the United States according to Engineering News-Record magazine.

 

  1. What sorts of changes did Hill make early on in the pandemic, both on a global level for all offices, and here in Oman?

Our company responded and adapted well at the early onset of Covid-19 by informing our staff, globally and locally about how the virus spreads and ways to keep safe and work in a clean, socially distanced environment. We took protection measures such as providing our staff with the necessary PPE like masks and sanitizers, as well as checking temperatures of employees and encouraging our staff to continue practicing good personal hygiene. We made sure to speak to all our clients to coordinate and align our new hygiene methods amongst all sites to try and limit the possibilities of our staff getting infected. A fruitful result of our proactivity is that we recorded 0 infected cases in Oman. We asked our staff who didn’t feel well not to come to work and we paid for them to get the PCR test.

Hill International also followed the recommendations that were regularly sent from our global COVID-19 advisory & action committee, which has been diligent in researching all the up-to-date related information and sending it across the company. Due to our actions, we managed to take preventative measures to ensure the well being of our staff and clients without needing to shut down for a long period or take time off of work.

 

  1. What has the day-to-day work been like in the past few months and how does it compare to the work before COVID19?

In line with government regulations, our offices were closed for a short period of time and the head office staff were asked to work from home. Despite this adjustment our project teams maintained operations on sites, while maintaining social distancing, with the required permits from the local authorities. Although health and safety regulations were held to a high standard prior to COVID-19, they were heightened as a result of the pandemic to ensure the safety of all our employees. Everyone had to put on masks, check their temperature before coming into the workplace, sanitizers became ubiquitous and setting up socially distanced offices has shaped the dynamic of our day-to-day work. Adhering to social distancing regulations and limiting groups of people meant that we had to cancel all our events and conferences until the situation improved and it is safe to do so.

 

  1. What is the biggest challenge you are facing during this Pandemic?

The biggest challenge was to keep our people safe during these unprecedented times, and raise awareness and knowledge about COVID-19. We made sure to apply more hygiene rules in all of our labor camps and provide our workers with safety equipment.  Another challenge we faced was the disruption that occurred in the global supply chain as travel regulations were limited, affecting distribution across countries as well as locally.

 

  1. What do you feel is the biggest strength of your company right now?

Our greatest strength is our ability to adapt to change, as we managed to support our clients throughout this process and meet their needs despite these unprecedented times.

 

  1. Anything else you’d like to add?

Hill International is constantly evolving and changing for the better. Even during Covid-19, our company is flourishing and striving to be bigger and better in this industry. We are continuing to stay positive and be patient during this time as we know that it is vital for the safety of all humanity.Hill International has taken many measures to ensure the safety of all of its employees and has been successful so far in all of its endeavours, and we look forward to working with other members of the OABC and in the greater business community.

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Your vote counts! U.S. Embassy Muscat is now accepting completed ballots and Federal Post Card Applications (FPCAs) through the 2020 election cycle.

If you wish to return your FPCA or ballot via the Embassy’s mail service, please drop off completed voting materials in the Voting Box at the entrance of the Embassy.  Normal transit times via the Embassy’s mail service vary from one to four weeks.   
The Voting Box is available only on days the Embassy is open to the public. Due to COVID-19, the Embassy is currently open to the public on Mondays from 8:00am to 11:00am. The Embassy is closed on U.S. and Omani holidays.  U.S. citizens can check the Embassy’s public service hours at https://om.usembassy.gov/u-s-citizen-services/.

 

Follow a few simple steps to make sure that you can vote in the 2020 U.S. elections:
  1. Request Your Ballot: Complete a new Federal Post Card Application (FPCA) at FVAP.gov. You must complete a new FPCA after January 1, 2020 to ensure you receive a ballot for every federal election for which you are eligible throughout the 2020 election cycle. The completion of the FPCA allows you to request the absentee ballots for all elections for federal offices (President, U.S. Senate, and U.S House of Representatives) including primaries and special elections during the calendar year in which it is submitted. All FPCA forms that are correctly filled out and include a signature and date are accepted by all local election officials in the U.S. states and territories.  You can use FVAP’s easy online assistant to walk you through the FPCA at FVAP.gov. The online voting assistant will ask you questions specific to your state. We encourage you to select the option of receiving your ballot electronically (by email, internet download, fax, depending on your state) as this is the fastest way for you to get your ballot. Include your email address in the FPCA to take advantage of the electronic ballot delivery option. Return the FPCA to you election office per the the instructions on the website. FVAP.gov will tell you if your state accepts the FPCA by email, mail, or fax. If you must mail your FPCA, please see bellow for mailing options.
  2. Receive and Complete Your Ballot: States are required to send out ballots 45 days before a regular election for federal offices and states generally send out ballots at least 30 days before primary elections. For most states, you can confirm your registration and ballot delivery online.
  3. Return Your Completed Ballot: Some states allow you to return your completed ballot electronically and others do not. If your state requires you to return paper voting forms or ballots to local election officials, then you can do so free of charge at the nearest U.S embassy or consulate. Place your ballots in postage paid return envelops or in envelops bearing sufficient domestic U.S. postage, and address them to the relevant local election officials.

 

Researching the Candidates and Issues:  Online Resources.  Check out the FVAP links page for helpful resources that will aid your research of candidates and issues.  Non-partisan information about candidates, their voting records, and their positions on issues are widely available and easy to obtain on-line.  You can also read national and hometown newspapers on-line, or search the internet to locate articles and information.  For information about election dates and deadlines, subscribe to FVAP’s Voting Alerts (vote@fvap.gov).  FVAP also shares Voting Alerts via Facebook (@DODFVAP), Twitter (@FVAP), and Instagram (@fvapgov.

Learn more at the Federal Voting Assistance Program’s (FVAP) website, FVAP.gov.  If you have any questions about registering to vote overseas, please contact Embassy Muscat’s Voting Assistance Officer at +968 2464-3600, or via email at VoteMuscat@state.gov.

Remember, your vote counts!

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crowe website

 

In continuation to Foreign Capital Investment Law issued in July 2019, Ministerial Decision no. 72/2020, promulgating the Executive Regulations of the Foreign Capital Investment Law issued on 14 June 2020, the Sultanate took further steps to ease the investment process. Salient features of the new executive regulations are:

  • Application, approvals, clearance, authorization and payment is going to be online
  • A foreign investor can entrust a bank or management and financial consultancy offices, with the examination of the application for investment authorization and they can issue a certificate.
  • A timeline fixed for the authority to object to the contents of this certificate and to decide on application
  • Application to be submitted with minimum documentary requirements
  • A single approval for the establishment, operation and management of the investment project set up to establish strategic projects
  • Special privileges to projects set up in least developed regions
  • Exemption from taxes, customs and non-customs duties to some specific projects
  • Allocation of land & real estate for investment projects
  • The competent authority shall ensure proper monitoring of the projects

 

Jim Joseph IttyFCACertified in Business valuation (ACCA)

Associate Partner – Corporate Finance

jim.joseph@crowe.om

 

Level 5, The Office, Opposite Muscat Grand Mall

Al Khuwair, P.O Box 971, P.C 131,

Muscat, Sultanate of Oman

T: +968 2403 6300

www.crowe.om

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According to news reports, in a statement issued by the Saudi state news agency, Mohammed Al-Jadaan, the Finance Minister of Saudi Arabia, has announced an increase in the rate of VAT from 5% to 15% in Saudi Arabia from 1 July 2020.

The announcement comes after Saudi Arabia posted a budget deficit of USD 9.07 billion in the first quarter of 2020 and is reported to have cancelled/postponed certain operating and capital expenditure and also cut allocations on projects worth USD 26.6 billion.

The austerity measures are intended to help Saudi Arabia stabilize non-oil revenues and cope with public finances currently pressured by low oil prices and Covid-19. This, however, comes as an unexpected move after the recent tax announcements by the General Authority for Zakat and Tax easing tax return filing, tax payment and penalty provisions to help businesses navigate the impact of Covid-19.

The move also seems to be a deviation from the Common VAT Agreement of the States of the Gulf Cooperation Council (GCC Common VAT Framework Agreement) that only empowers member-states to levy VAT at the standard rate of 5% on taxable supplies that are not specifically exempt or zero rated (Article 25).

To access our detailed tax alert on the implications of the increase in the VAT rate in Saudi Arabia please click here.

Development in the UAE

The United Arab Emirates (UAE) introduced VAT on 1 January 2018, the same time as Saudi Arabia, and is faced by similar economic pressures. However, according to recent news reports, in an official statement issued after the announcement by Saudi Arabia, UAE’s Ministry of Finance has confirmed that they have no current intentions to increase the rate of VAT.

Budgetary Challenges in Oman

Oman, like many other countries in the region and outside, is significantly challenged with the sharp slump in international oil prices and the economic instability created by Covid-19 that continue to impact the country’s credit rating. Since the beginning of 2020, the Ministry of Finance has issued many circulars and a set of directives to government units to reduce the volume of spending. In April 2020, the Ministry of Finance announced a cut of OMR 500 million in the State Budget.

Oman has been preparing for the introduction of VAT for quite some time. This includes drafting the VAT law and executive regulations, as well as having systems in place to implement VAT when the government takes a decision on the implementation date. In an interview with Bloomberg at the World Economic Forum 2020 in Davos earlier in January this year, His Excellency Ali bin Masoud Al Sunaid, Minister of Commerce and Industry in Oman, confirmed that Oman would introduce VAT “sometime during the beginning of 2021”.

Given recent unexpected challenges, Oman may consider the possibility of implementing VAT more quickly, in a phased manner. In this case, businesses may not have a long period of time to prepare for implementation. 

VAT impacts businesses beyond finance and, among others, warrants a review of processes, systems, documentation, compliances, policies, contracts and pricing. The experience of businesses in other GCC countries, where VAT has already been implemented, shows that preparing for the introduction of VAT requires careful planning and time. However, the process is usually rushed once VAT legislation is announced with a short implementation period, resulting in, sometimes, costly errors. It is, therefore, important that businesses in Oman do not delay their plans for preparing for VAT implementation based on existing VAT legislations in the GCC and the GCC Common VAT Framework Agreement. Once the Oman VAT legislation is issued businesses can update the work already done and be fully ready.
KPMG has a dedicated team of experienced VAT implementation specialists based in Oman. If you need any assistance with VAT implementation in Oman, please reach out to your tax advisors at KPMG or the contacts mentioned below.
Ashok Hariharan
Partner | Head of Tax
AHariharan@kpmg.com
Rhys Penning
Partner | Indirect Tax
rpenning@kpmg.com
Abha Lekhak
Director, Indirect Tax
alekhak2@kpmg.com
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Would you please tell us a bit about Azooz, and a bit about yourself as well, as a new member of the OABC?

Azooz is an online delivery app that was created with a vision to enable the Omani producers/manufacturers to sell their products directly to the consumers in Oman. For example, through Azooz,

  1. A customer in Madinat Qaboos is able to order a fresh chicken from a farm in Ibra and get it delivered within few hours of ordering.
  2. A home-based business lady is selling her spices directly to a customer in AL Mouj
  3. And many more examples like this

Whether small or big, Omani manufacturers/producers have a direct reach to customer’s homes through Azooz and are benefitting by more volumes and margins.

As Managing Director of Al-Hathaifa (and AZOOZ), I have been in Oman for last 22 years and started my journey from the oilfield to now a business that is unconventional and challenging in many ways.  The vision of Azooz is shared by my Omani partner and a great set of advisors who always are trying to bring a new dimension in Azooz. We have plans to work very closely and develop home-based businesses, SMEs, and hopefully will create an ecosystem for better reach for their businesses. We also have plans to bring models based on subscriptions, that will bring next level of convenience to consumers in Oman.

 

What has the day-to-day work been like in the past few months, and how does it compare to the work before COVID19?

We had rolled out Azooz in the month of January among friends and relatives, and from there has been no looking back. We have had great response from our customers and people have reached out to us to help us develop Azooz. With COVID-19 reaching Oman in March, we did not blindly start delivering everything, we stuck to our core cause of supporting Omani products.

Adding new vendors, deliveries, and procurement during COVID-19 challenged us in various ways. One thing that we have been constantly doing is sticking to our core belief of enabling Omani companies and Omani manufacturers/SMEs. We have some large enterprises and some small producers but we can proudly say that we have been doing our part successfully. Our vision is not restricted to the COVID-19 situation, we are focused on enabling Local Producers/Manufacturers in the long run.

 

How do companies register with Azooz to begin offering their products via the platform?

For the companies who wish to be our partners, simply send us a message on help@azooz.online. Our Vendor Development Team will assist them in completing the listing process. For customers who wish to order, simply download the app available on iOS and android platforms or through our site www.azooz.online.

Currently, customers who download the app can find some imported products.  We are working with Omani companies that import these products during the hot months — it is impossible to grow most fresh vegetables and such right now due to the climate.  So we support these importers and getting healthy food to people, year round.

What is the biggest challenge you are facing during this Pandemic? 

We have been facing various challenges during this excruciating time. The biggest one is receiving goods that we need for our business. Like eco-friendly bags, we are unable to procure them currently due to the lockdown. Similarly, some vendors are unable to deliver products that are already listed on our site. Movement limitation, workforce restriction, lack of labor has impacted all of our vendors and their product availability. Despite these challenges, we are trying our best to deliver what we commit to our customers.

 

Do you have any advice to those looking to start something new in Oman?

At present, in my opinion, any new business should be started to solve a problem. Money should not be the only motivation when starting any business, one has to ask what impact the business will have on the country’s economy and to the people in general.  There is a tough competition outside and one must be prepared to compete with some very intelligent people who keep you alert and on your toes at all times.

 

Anything else you’d like to add?

We want support from our customers as Azooz belongs as much to the customers as it belongs to us. We will make mistakes like everyone else, but we promise to learn from them and try not to repeat those errors again. We want our customers to be patient with us and we will ensure that the money they spend goes to Omani producers/manufacturers. In the long term, everyone will reap the benefit of an app that truly supports the Omani economy.

 

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