Sheikh Mohammed Bin Rashid Al Maktoum.
Inayat-ur-Rahman, Business Editor
In his capacity as Ruler of Dubai, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, has approved the Government of Dubai’s general budget for the fiscal cycle of 2022-2024, with a total expenditure of Dhs181 billion. Sheikh Mohammed has also approved Law No. (28) for the General Budget for the fiscal Year 2022, with Dhs59.95 billion expenditure.
The budget cycle will support Dubai’s efforts to stimulate the macro economy and the objectives of the Dubai Strategic Plan 2030. The new general budget reflects the emirate’s determination to accelerate post-pandemic economic recovery and achieve the leadership’s broader goals to stimulate entrepreneurship, enhance society’s happiness and consolidate Dubai’s position as a land of opportunities and innovation.
Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai, said: “The Dubai government continues to consolidate the emirate’s position as a leading global commercial hub and raise its international competitiveness by creating new growth opportunities for vital sectors in line with the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai to enhance sustainable development and government performance. Dubai’s general budget for the fiscal cycle of 2022-2024, which reflects the fundamental strengths and stable base of the emirate’s economy, supports the realisation of its future economic aspirations, in addition to placing the emirate at the forefront of worldwide efforts to promote recovery.”
The three-year budget cycle focuses on increasing economic growth rates by activating the public-private partnership ecosystem and supporting the private sector to drive economic growth. It also addresses the social aspects of healthcare and education, as well as digital infrastructure development and financial sustainability programmes.
Through its 2022 budget, Dubai continues to place a high emphasis on developing social services, and its healthcare, education and cultural sectors. The budget also pays attention to citizens’ housing sector by raising the value of the housing loan to Dhs1 million and allocating more than 4,000 plots and houses with a total value of Dhs5.2 billion in the first phase of the housing programme for citizens in Dubai within a broader 20-year programme of Dhs65 billion. The budget also focuses on developing the Social Benefits Fund by supporting families and people of determination, which is set to consolidate Dubai’s position as one of the best cities in the world to live and work in.
Abdulrahman Saleh Al Saleh, Director General of the Department of Finance of the Government of Dubai (DOF), affirmed the government’s commitment to continue its development efforts through the general budget cycle for the fiscal years 2022-2024, further raising financial sustainability and stimulating the growth of entrepreneurship in Dubai.
“Dubai government is eager to develop its financial plan annually to provide economic incentives that will have an impact on attracting more investments, improve the emirate’s competitive position and achieve the goals of the Dubai Strategic Plan 2030. The 2022 budget strengthens recovery efforts and acts as a starting point within an integrated scheme of the 2030 plan. It also seeks to achieve the vision of Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council, who has issued directives to increase government support for families and people of determination, develop government work and increase institutional agility,” said Al Saleh.
He also affirmed Dubai government’s commitment to the directives of Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, in terms of adopting disciplined financial policies, leading to an operating surplus of Dhs1.8 billion, which represents three percent of the expected total revenue. This will contribute to the development of the emirate’s infrastructure programmes and consolidate the emirate’s financial sustainability policy.
Arif Abdulrahman Ahli, Executive Director of Planning & Budget Sector at DOF said: “The Dubai government’s medium-term financial planning methodology and the announcement of a three-year financial plan exemplifies the vision of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, and the directives of the Crown Prince of Dubai and Chairman of The Executive Council, and the Deputy Ruler of Dubai”.
“The 2022 budget responds to the requirements of the Dubai Strategic Plan 2030 and is a transparent expression of the emirate’s stable financial position. It also reflects disciplined financial policies based on international best practices. Achieving an operating surplus of 3% of total government revenues is an indication of the financial sustainability that the department is keen to ensure,” Ahli explained.
The 2022 budget expects to achieve revenues estimated at Dhs57.55 billion, an increase of 10% over the expected revenues of the previous budget of the fiscal year 2021, as a result of the rapid recovery of Dubai and the effective measures taken to curb the pandemic. Dubai is one of the first cities in the world to achieve a rapid recovery due to the economic stimulus measures approved by the government that reduced some government fees for businesses and put a freeze on fee increases until 2023.
These revenues are based on ongoing operations in the emirate and do not rely on oil revenues. Oil revenues account for six percent of the total projected revenues for the fiscal year 2022, which creates the conditions for enhanced financial sustainability.
Non-tax revenues, which come from fees, account for 57% of the total expected revenues, while tax revenues account for 31%, and government investment revenues represent six percent of the total expected revenues.
Jamal Hamid Al Marri, Executive Director, Central Accounts Sector at DOF pointed to the Department’s efforts to consolidate development and innovation through the development of financial programmes and financial data platforms. “These tools make a clear contribution to making financial statements available to the government, companies and individuals, which will help further raise Dubai’s competitiveness. DOF is constantly creating programmes to develop the public finance landscape and achieve financial excellence, in addition to implementing International Public Sector Accounting Standards (IPSAS), which will have the greatest impact in showing the fruits of budget implementation and developing new ways to enhance government performance.”
Salary and wage allowances of the 2022 budget account for 34% of total government spending, in accordance with the requirements of the new human resources law. Grant and social support expenditure accounts for 21% of all expenditure, in order to meet the requirements of human and community development and provide public services to the residents of the emirate.
Imran Farooq, CEO, Samana Group told Gulf Today that Dubai has proven its expertise of handling any crises, including Covid-19 related economic crash. However, Dubai showed up is strong stewardship in successfully organizing the Expo 2020 Dubai. It is testament to vision of the Rulers of Dubai His Highness Sheikh Mohammed Bin Rashid Al Maktoum and his team.
His Highness Sheikh Mohammed ruled out all speculations related to COVID-19 affected delay of Expo 2020 Dubai by ironing out its policies for the public and private sectors and for the UAE citizens who are the priority for him.
With this highly optimistic and bold statement of Sheikh Mohammed, the UAE public has a strong conviction that the new variant of COVID-19 will be overcome, pass and the people and economy will back on growth track.
Getting the 100 percent consent and approval of Dubai’s Dh181 billion budget is proof of trust in his abilities and vision that will propel Dubai to the new heights.
“We as the business community will fully support His Highness through thick and thin and we all will emerge as an business center of the world, insha Allah.”
The government has allocated an amount of Dhs5.2 billion for construction projects, despite the completion of Expo-related projects, the activation of the Public-Private Partnership Law and the development of project financing mechanisms in the Dubai government through long-term financing.
The government has also allocated nine percent of the total expenditure to maintain the volume of investments in infrastructure, in line with Dubai’s aspirations to be the world’s most preferred destination to live in. Two per cent of the total expenditure is allocated to the private reserve to support emergency preparedness programmes, while public debt accounts for six percent of the total expenditure, in order to follow a disciplined fiscal policy that ensures the budget fulfills all obligations.