Dh196-billion Dubai budget from 2020 to 2022 approved

3-year budget part of government’s approach to boost the emirate’s overall economy.

Dubai: In his capacity as the Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, has approved a three-year budget cycle for the Government of Dubai, for the 2020-2022 period.

The three-year budget cycle meets the aspirations of Dubai’s future. It also confirms its determination to continue raising people’s happiness and stimulating entrepreneurship.

The plan highlights the Government of Dubai’s keenness to provide the highest levels of economic stability and stimulus to the emirate’s business sectors.

It also gives a clear picture of the government’s economic goals in the next three years, which supports the medium-term planning of the economic sectors and provides a clearer view of the private sector.

Dh66.4 billion for 2020

The emirate’s largest-ever annual budget, worth Dh66.4 billion for 2020, was approved.

For the fiscal year of 2020, Sheikh Mohammed signed the Public Budget Law No. (12) for the year 2019, with Dh66.4 billion expenditure, making it the biggest in Dubai’s history.

The 2020 budget seeks to realise the emirate’s ambitions to stimulate the entire economy and support the organisation of the largest and most prominent “Expo 2020 Dubai” in the history of the prestigious global exhibition.

In 2020, Dubai will continue supporting social services — including health, education and housing, and working on developing the Social Benefits Fund and supporting families, as part of the objective of making Dubai one of the most livable cities in the world.

“To ‘have a plan’ is one of His Highness Sheikh Mohammed bin Rashid Al Maktoum’s 10 commandments of governance,” said His Excellency Abdulrahman Saleh Al Saleh, Director General of the Government of Dubai’s Department of finance (DOF).

“The Government of Dubai, represented by DOF, was inspired by this commandment in launching the 2020-2022 budget cycle, endorsing our endeavour to continuously develop the performance of the public budget in order to confirm financial sustainability and work to stimulate entrepreneurship and business sectors in the emirate by enhancing business incentives for the next three years.”

“Enlightened by His Highness Sheikh Mohammed bin Rashid Al Maktoum’s vision, the Government of Dubai develops its financial plan annually under the directives of His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai.

“We are keen to provide economic incentives with an impact of attracting more investments, and work to improve the emirate’s competitive position and implement the goals of the Strategic Plan 2021 and beyond,” Al Saleh continued.

“The budget for the fiscal year 2020 has been approved with total expenditure up by 16.9% compared to the previous year. This comes as part of supporting the Dubai Plan 2021 and the Expo 2020 Dubai, as well as moving forward in support of the emirate’s macro economy.”

“We are capable of achieving an operating surplus of Dh1.96 billion due to the adoption of disciplined financial policies, which contributes to the development of infrastructure programmes for the emirate and affirms the financial sustainability policy pursued by the emirate,” concluded Al Saleh.

Arif Abdulrahman Ahli, Executive Director of Planning & Budget Sector at DOF, said: “The fiscal year 2020 budget well expresses transparently the stable financial position of the emirate of Dubai, by implementing disciplined financial policies that rely on international best practices.

Achieving an operational surplus is what realises the desired highest levels of financial sustainability for Dubai.

DOF seeks to develop initiatives concerned with raising the efficiency of government spending, such as the Unified Procurement Programme, and stimulating partnership with the private sector, along with its constant endeavor to develop and review the budget.”

Projected Government Revenues for 2020

The Government of Dubai estimates public revenues to reach AED64 billion, an increase of 25% year-on-year. This increase comes despite the economic incentive measures adopted by the government that would reduce some fees and freeze the increase in fees for three years, and the decision to not impose any new fees without providing a new service.

The revenues are based on ongoing operations in the emirate and do not rely on oil revenues. Oil revenues account only for six per cent of total projected revenues for the fiscal year 2020.

Non-tax revenues account for 60% of total expected revenue. Tax revenues account for 29%, while revenues from government investment represent five per cent.

Jamal Hamid Al Marri, Executive Director, Central Accounts Sector at DOF said: “DOF spares no effort to consolidate the elements of government competitiveness of the emirate, and is keen to develop programmes that improve the performance of public finance and achieve financial excellence.

Dubai’s success in the implementation phase of the International Public Sector Accounting Standards (IPSAS) will support the government decision-making process, ensure the continuity of government financial efficiency and improve the quality and comprehensiveness of financial reports, in line with the objectives of Dubai Plan 2021.”

“Dubai seeks to consolidate its position as a pillar supporting the leadership approach in government work based on efficiency, accountability and creativity.

“In addition, this development will make Dubai the first government in the region to implement IPSAS, and it will have a great impact on implementing the budget in the most fruitful way and developing means of outstanding government performance,” continued Al Marri.

Projected government expenditure for fiscal year 2020

The 2020 budget — the largest in the Government of Dubai’s history — sends a clear message to the business community that Dubai is pursuing an expansionary fiscal policy, which gives great confidence to the emirate’s economy and contributes to attracting more investments.

This budget serves the requirements of population growth and benefits arising from the hosting of Expo 2020 Dubai.

It also serves the continuous development of infrastructure, as well as other goals of the Dubai Plan 2021 — all aiming to raise the level of the welfare and happiness of the emirate’s citizens and residents, in order to fulfil the directives of the leadership.

Salary and wage allowances of the 2020 budget account for 30% of total government spending, to fulfil the new Human Resources Law, while the grant and support expenditure account for 24%, to provide the best health, education and social services to citizens, and improve the level of public services and promote human development.

The Government of Dubai has dedicated Dh8 billion to develop infrastructure projects and prepare for future commitments, in conjunction with the completion of some projects, the activation of the Public Private Partnership Law and the development of project financing mechanisms through long-term financing.

Spending on construction projects reached 12% of government expenditure, indicating the continued development of Expo 2020’s infrastructure, which will later remain in place to serve all economic and social sectors in the emirate.

For the first time ever, the government has announced a special reserve of three per cent of total expected expenditures, in accordance with the principle of hedging and preparing for the Expo 2020 period, as well as the objective of making the event the best in Expo’s history.

Dubai will maintain a debt service rate of no more than five per cent of its total expenditure in the fiscal year 2020. This comes as a result of adopting a disciplined financial policy that ensures the budget implementation faces no financial constraints.

Sectoral distribution of government expenditure

The budget of the fiscal year 2020 reflects the government’s commitment to human welfare, in line with HH Sheikh Mohammed bin Rashid Al Maktoum’s firm belief that people are the real wealth of the nation.

Spending in the social development sector in the areas of health, education, housing, women and children’s care, as well as developments including reading, translation and coding initiatives, represents 30% of total expenditure.

The government’s concern for security, justice and safety sees 19% of total expenditure being allocated to support and enable this sector to perform professionally and proactively. This sector has become one that the emirate prides itself on in the global arena.

Dubai’s keenness to develop its economy, infrastructure & transportation has led to an allocation of 46% of total spending to the sector. This reflects its commitment to dealing with future commitments, supporting entrepreneurship and creating an incubator environment for microenterprises.

The emirate is also keen to support government excellence, creativity, innovation and scientific research. Five per cent of the total government expenditure has been allocated to developing performance and instilling a culture of excellence, innovation and creativity.

Source: https://gulfnews.com/uae/government/dh196-billion-dubai-budget-from-2020-to-2022-approved-1.1577612881880

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