Emirate’s public debt to GDP ratio was below 27.9 per cent.
Capital expenditure on infrastructure projects in Dubai, especially projects related to Expo 2020, top the priorities of the public budget as part of ensuring that key projects are completed as per schedule, a top government official said on Saturday.
Director-General of the Government of Dubai’s Department of Finance (DoF) Abdulrahman Saleh Al Saleh said that the budget surplus generated over the last few years through prudent financial policies was used to fund infrastructure projects as per the objectives of Dubai Plan 2021, while Expo 2020-related projects will be totaling Dh30 billion by 2021.
Al Saleh was speaking at a ‘Meet the CEO’ event organised by the Government of Dubai Media Office. ‘Meet the CEO’ is a regular series of press events organised by the Media Office or leaders of prominent Dubai organisations. Both local and international media attended the event.
Al Saleh said Dubai’s sovereign debt reached $32 billion in September 2019. The emirate’s public debt to GDP ratio was below 27.9 per cent while the debt-service coverage ratio was only 5 per cent of the general budget.
“Dubai is able to service all its sovereign debts according to schedule,” he said, adding that Department of Finance explores various other financing options before tapping the debt market to fund infrastructure projects. Such options include bonds, sukuk, export guarantee and securitisation.
Al Saleh noted that Dubai approaches the debt market only to finance infrastructure projects and not for operational expenditures.
He said continuous improvement in the performance of Dubai’s public budget over the last 5 years has been driven by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice- President and Prime Minister of the UAE and Ruler of Duba’s directives to maintain the sustainability of Dubai’s financial system, stimulate greater entrepreneurship and investment through economic stimulus measures and further enhance Dubai’s competitiveness as a global investment hub.
No hike in fees
He said that there is no intention to increase government fees since a decision to freeze the fees was issued in March 2018, adding that the decision did not have a significant financial impact on Dubai as it has diverse sources of revenue. He stressed that Dubai is capable of meeting all its financial commitments without increasing fees.
Al Saleh further said that the Government of Dubai reduced some government fees in June 2018 to support the business sector. This reduction has not had any noticeable impact on the performance of the general budget.
“The department is continuing to work on the Dubai Government Service Costing Program, ‘Almas’, launched in October 2018, which seeks to enhance transparency and accuracy in costing government fees.”
He further said that the department is working on a draft cost model for each government entity and a centralised formula for government fees. The first phase of this project includes the collection of data and the calculation of the cost of 1,400 government services, including Roads and Transport Authority (RTA), Dubai Customs, Dubai Municipality, Dubai Police and Dubai Economic Department. At a later stage, the project will cover 5,500 services provided by 23 revenue-generating government entities.
Al Saleh said that DoF has completed the general policy pertaining to the relationship between public and private sectors, related to Law No. (22) of 2015 pertaining to public-private partnerships. It has also commenced work on a new framework for public-private partnerships and launched many innovative projects including Dubai Municipality’s Waste-to-Energy project in partnership with a private company, a 30-year project that is set to kick off in 2020. He also said that the Department will host a conference on public-private partnership in the first half of 2020.
Al Saleh further said that he expects the private sector to partner with the government on multi-billion joint projects over the next few years. The department is currently working with various government entities to implement projects worth Dh4 billion in sectors such as education, healthcare and energy. These include the Dh3.5 billion Dubai Municipality’s Waste-to-Energy project.
The department will execute a number of initiatives in the period leading to 2021 as part of Dubai’s strategic plan for partnerships with the private sector.
Al Saleh said the department is keen to encourage the private sector to get involved in projects to promote investments and improve the competitiveness of public-private sector joint projects.