The UAE Cabinet approved the Federal Budget of Dh58.1 billion on Sunday.
The UAE will spend a large chunk of its next year budget on social development followed by government affairs and federal project expenditures.
Analysts and experts said the budget allocations are mostly in line with the last year. They also pointed out that 2021 is the last year of the UAE government’s five-year plan (2017-2021.)
The UAE Cabinet, head by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on Sunday approved a Dh58.1 billion budget for 2021 with development of vital national projects remains priority for the government.
“The federal budget for 2021 was in accordance with the best international standards and applied the latest electronic systems, to improve expenditure efficiency and direct spending towards strategically important sectors. That, in addition to enhancing government entities’ ability to implement and achieve their goals and programmes with the required efficiency,” said Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and Minister of Finance.
Sheikh Hamdan said the main objectives of preparing the federal budget in the form of periodic plans are to improve the level of social services provided; focus on upgrading smart government services and increasing the level of customer satisfaction; and highlight the efforts of the federal government to provide welfare, prosperity, happiness and security for all community members.
Khatija Haque, head of research and chief economist at Emirates NBD Research, said the federal budget has run a surplus in first half of 2020.
“It is also a relatively small proportion of overall UAE spending, which we expect to reach Dh450 billion this year, and rise to Dh466 billion in 2021,” she said.
Lalu Samuel, chairman and managing director of Kingston Holdings, said the budget reflects resilience of the UAE economy and the financial strength of the country’s future plans. It does also highlight the fact that the UAE economy is pressing ahead towards further growth and prosperity.
“This will undoubtedly give a strong impetus to local and foreign investors to increase their investments and projects,” he said.
Breakdown of the budget showed that UAE allocated Dh26.04 billion, or 42.6 per cent, to social development; and Dh9.6 billion, or 15.7 per cent, for education sector. Within education sector, the government has allocated Dh6.2 billion, or 10.2 per cent for public education programmes and Dh3.4 billion, or 5.5 per cent, for higher and universities programmes. It allocated Dh4.97 billion, 8.1 per cent, for the healthcare and disease prevention as well as funds to mitigate the Covid-19 pandemic.
The federal government will spend Dh3.4 billion, or 5.6 per cent, for social rights and activating community integration to support and provide subsidies to special groups and Dh4.6 billion for pensions.
The government has announced allocation of Dh21.3 billion, or 34.8 per cent to run government affairs, Dh4.5 billion for infrastructure, Dh19.3 for social development and Dh4.6 billion for social welfares. In addition, Dh7.7 billion will be spent on federal expenditures and Dh3.1 billion for financial assets and investments.
Of the Dh3.93 billion federal projects, Dh1.4 billion to be used to fund UAE railway network, Dh126 million for UAE Space Agency, and Dh963 million for infrastructure development projects.
The Ministry of Finance said federal entities have updated their draft budgets for the fiscal year 2021 in the automated budget preparation system within the five-year plan 2017-2021.
Allocations of the Federal Budget for the fiscal year 2021 were distributed among the various sectors as follows:
First: Social development and social benefits
>Dh26.04 billion, or 42.6 per cent of the budget, was allocated to social development and social benefits sectors
>Dh9.6 billion (15.7 per cent) was allocated to public, higher and university education programmes
>From the aforementioned 9.6 billion, Dh6.2 billion (10.2 per cent of the budget) was allocated to public education programmes, and Dh3.4 billion (5.5 per cent of the budget) was allocated to higher and university education programmes
>Dh4.97 billion (8.1 per cent of the budget) was allocated to healthcare and disease prevention, in order to provide the best healthcare to citizens and residents. Also allocated were all the necessary funds to mitigate the Covid-19 pandemic
>Dh3.4 billion (5.6 per cent of the budget) was allocated to social rights and activating community integration. This is to ensure the country’s sponsorship of those who deserve support and to provide subsidies to special groups in need of care
>Dh4.6 billion (7.6 per cent of the budget) was allocated to social welfare programmes directed to military veterans and civilians’ pensions
Second: Government affairs
>Dh21.3 billion (34.8 per cent of the budget) was allocated to government affairs, to provide the latest services and achieve justice for all community members
>Dh4.5 billion (7.4 per cent of the budget) was allocated to infrastructure and economic resources
>Dh19.3 billion (31.6 per cent of the budget) was allocated to social development
>Dh4.6 billion (7.6 per cent of the budget) was allocated to social welfare programmes
>Dh7.7 billion (12.7 per cent of the budget) was allocated to other federal expenses
>Dh3.1 billion (5 per cent of the budget) was allocated to financial assets and investments
>Dh529 million was allocated to other services
Third: Federal Projects
>Dh3.93 billion was allocated to federal projects, and was distributed as follows:
>The Federal Budget for the fiscal year 2021 included allocations to financing the federal government’s share of establishing the UAE railway network at an amount of Dh1.4 billion.
>Dh126 million was allocated to the UAE Space Agency
>Dh963 million was allocated to infrastructure development projects.
Click here to read more news from @khaleejtimes