UAE Ministry of Finance Discusses 2019 Federal Budget

The Ministry of Finance, MoF, raised the 2019 federal budget draft to the UAE Cabinet as part of the Five-Year Federal Budget Plan (2017-2021). At AED60.3 billion, it represents a 17.3 percent increase on the total budget appropriation for 2018.

The Ministry also launched the eDMobile application, took the e-Dirham initiative to support smart government programmes, and reviewed e-Dirham’s key results in 2018.

The announcements were made at a press round table at the Ministry of Finance’s premises in Abu Dhabi, in the presence of Younis Haji Al Khoori, Under-Secretary of the Ministry of Finance, Saeed Rashid Al Yateem, Assistant Under-Secretary of Resources and Budget Sector at the ministry and Azza Al Suwaidi, Director of Public Revenues.

According to Al Khoori, the Ministry presented the federal budget draft for the fiscal year 2019 to the UAE Cabinet, where the average increase in the financial allocations for the budget of 2019 amounted to 23.9 percent compared to the budget cycle for 2014/2016.

The Ministry held workshops for all federal entities to train their specialists on the procedures, policies and rules used to prepare the federal budget draft, in accordance with the zero-budget system of the Federal Government, as well as to clarify and explain the decisions and the financial circular issued on the preparation of the draft federal budget for 2019. The ministry also held workshops on the policies relevant to financial transfers during the second half of 2018.

The 2019 federal budget was distributed to the various sectors, including Social Development and Social Benefits, the Government Affairs Sector, and Federal Projects.

The allocation to the social development and social benefits programmes, estimated at AED25.5 billion, representing 42.3 percent of the total budget while the allocations for public education, higher and university education amounted to AED10.3 billion, representing 17 percent of the total budget. Costs estimated for public education amounted to AED6.7 billion, representing 11.1 percent of the total budget and costs estimated for higher and tertiary education programmes amounted to AED3.6 billion, or six percent of the total budget.

AED1.4 billion is dedicated to the UAE University, AED1 billion is allocated to Higher Colleges of Technology while AED435 million is allocated for Zayed University. The appropriations for health care and community protection amounted to AED4.4 billion, representing 7.3 percent of the total budget.

The allocated funds for social rights and activate community integration in the Ministry of Community Development amounts to AED3.2 billion, representing 5.3 percent of the total budget. In addition, AED 1.6 billion, amounting to 2.6 percent, is allocated to the Sheikh Zayed Housing Programme to provide suitable housing for UAE nationals. The allocations to the social benefits - pension programme amount to AED4.5 billion, representing 7.4 percent of the total budget.

Al Khoori said, "MoF has been keen on developing the federal general budget for the fiscal year 2019 to achieve the vision and direction of the UAE's wise leadership, who stressed the need to provide a decent life for retired citizens and military personnel, provide the highest security and justice services for both nationals and residents and provide world-class educational programs, as they aid future generations reach a knowledge-based economy."

A total of AED22.6 billion, or 37.4 percent of the total budget, is allocated to the Department of Government Affairs and AED2.5 billion is allocated to the policies programmes to maintain clear policies that support the nation’s relations regionally and globally and AED944 million allocated to improving the judicial system of the nation. AED1.7 billion, or 2.8 percent, of the total budget is allocated to support infrastructure and economy development, while AED21 billion, or 34.8 percent is earmarked for social development.

Financial allocations for projects implemented by ministries and federal entities are recorded at a value of AED841 million, in addition to the projects implemented by the Federal Authority for Electricity and Water, which are estimated at AED1.2 billion.

AED1.5 billion is allocated to Sheikh Zayed Housing Programme projects and AED171 million for the UAE Space Agency projects. The Ministry of Education’s projects will receive financial allocations amounting to AED4 million to supplement school projects, while Ministry of the Interior will receive AED251 to establish police stations, civil defence centres, naturalisation and residency administration offices and scientific laboratories.

AED10 million is allocated for the Ministry of Health and Community Protection’s project, AED66.5 million for Ministry of Foreign Affairs and International Cooperation, AED5 million is allocated to the Ministry of Justice, in addition to AED497 million for the Ministry of Infrastructure Development’s projects.

The total combined budget includes the budgets of ministries and autonomous federal entities, including government support and their revenue, with the total consolidated budget for the fiscal year 2019 amounting to AED69.3 billion distributed over the different payment groups.

The total consolidated budget for the next three years is expected to be approximately AED200 billion. The funds allocated to provide government services to all members of society according to the highest quality standards amount to AED22.7 billion, or 32.7 percent of the total 2019 federal budget.

The financial allocations for infrastructure and economic resources amount to AED9.8 billion, representing 14.2 percent of the total budget. The funds allocated to social development amount to AED21.7 billion, representing 31.3 percent.

The social benefits and pensions programme for retirees amounts to AED4.5 billion, representing 6.5 percent of the consolidated budget. Subsidies, grants and other expenses amount to AED8.6 billion, representing 12.4 percent of the consolidated budget for 2019, while financial assets amount to about AED2 billion representing 2.9 percent.

Al Khoori said, "The 2019 consolidated general budget reflects the significant development of the UAE, the growth in the revenues of the federal entities, as well as the ability and commitment of these entities to achieve the strategic objectives adopted in accordance with the UAE Vision 2021."

On innovation, Al Khoori said, "MoF has contributed to the establishment of the Mohammed Bin Rashid Innovation Fund, with an allocation of AED2 billion to provide financing solutions to innovators and to support them in transforming their ideas into projects that contribute to the national strategy for innovation and realization of the UAE Vision 2021. The UAE maintained its leading position in the Arab world and was ranked 35th in the world, achieving a leap in position among top-tier countries in the most innovative rankings of the 2018 Global Innovation Index."

During the conference, Al Yateem highlighted the main features of the eDMobile application, which allows customers to access e-Dirham services with the ability to perform e-payment transactions using multiple payment methods, download and view brochures, help pages, view latest news and advertisement banners.

Al Yateem said, "MoF continues its efforts to develop digital payment services and smart government services as part of its contribution to the achievement of the objectives of the national agenda, the UAE Vision 2021, as well as the development of the digital future industry in the country, which will in turn enable optimal utilisation of human and financial resources and enhance the efficiency and accuracy of systems."

He said that the Ministry seeks to ensure that the e-Dirham system provides secure and effective cash payment channels. The customer can issue several codes through the wallet and without any delay or confirmation of any payments on the customers' cards. They want to make the payment within a certain financial ceiling and the code will be confirmed once the payment is made only to confirm the payment limit and balance.

With regards to the e-Dirham system, Al Yateem said that the revenues of the system during the first half of 2018 exceeded AED11.8 billion, achieving a growth of 52.33 percent, compared to the same period in 2017. The number of cards issued for e-Dirham services exceeded 3.7 million cards, while the number of receipts reached 11,385,661 in the first half of 2018.