HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai has approved the budget for fiscal 2020 with Dh66.4 billion ($18.1 billion) expenditure, making it the biggest in Dubai’s history.

Sheikh Mohammed also signed a three-year budget cycle for the Government of Dubai for the 2020-2022 period with Dh196 billion ($53.4 billion) expenditure.

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 liveable 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 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.

"The budget for the fiscal year 2020 has been approved with total expenditure up by 16.9 per cent 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.

The Government of Dubai estimates public revenues to reach Dh64 billion, an increase of 25 per cent 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 per cent of total expected revenue. Tax revenues account for 29 per cent, while revenues from government investment represent five per cent.

Projected government expenditure for fiscal year 2020

This budget serves the requirements of population growth and benefits arising from the hosting of Expo 2020 Dubai and 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 per cent of total government spending, to fulfil the new Human Resources Law, while the grant and support expenditure account for 24 per cent, 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 per cent 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

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 per cent of total expenditure.

The government's concern for security, justice and safety sees 19 per cent of total expenditure being allocated to support and enable this sector to perform professionally and proactively.

Infrastructure & transportation have been allocated 46 per cent of total spending, reflecting the government’s commitment to dealing with future commitments, supporting entrepreneurship and creating an incubator environment for microenterprises.

Five per cent of the total government expenditure has been allocated to developing performance and instilling a culture of excellence, innovation and creativity. – TradeArabia News Service