AED51.4b approved for 2018 Federal Budget

The Ministry of Finance, MoF, submitted a draft general federal budget for the fiscal year 2018 as part of a strategic five-year plan, spanning 2017-2021, to the UAE Cabinet at a total of AED51.4 billion and an increase of 5.6 percent from the total budget allocations for the previous fiscal year 2017.

The budget is the largest one ever to be allocated to the Federal government.

The increases in the financial allocations for 2018 compared to the financial allocations for the previous budget period (2014-2016) were approximately 12%/5%/6% respectively, which indicate the strength of the national economy and sustainable financial resources in addition to providing liquidity to finance all economic and social development initiatives in the country.

H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, reaffirmed that the full support of President His Highness Sheikh Khalifa bin Zayed Al Nahyan, has served as a catalyst for the comprehensive development of the country, as he has continued to champion the cause social good, prosperity and happiness for the people of the UAE.

Sheikh Hamdan bin Rashid also highlighted that the citizens of the UAE are among the happiest and most prosperous populations in the Arab world, noting that the general federal budget during these years has contributed to significant achievements, which reflect the vision and astute guidance of the wise leadership.

The Vice President, Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, was the driving force behind innovation and excellence in the country's method in preparing the general budget and government accounts. This is reflected in the increase in the financial allocations in the state budget to finance existing and future projects, which confirms the strength and robustness of the economic structure of the country to implement all projects according to approved strategic plans.

The federal budget for fiscal year 2018 was allocated to different sectors, including social development and social benefits, government affairs sector, and federal projects.

The estimated budget for social development programmes and social benefits stands at AED26.3 billion, approximately 43.5 percent of the total budget. The total allocations for general, higher and university education programmes amounted to AED10.4 billion, representing 17.1 percent of the total budget, while public education programmes were allocated AED6.6 billion, representing 10.9 percent of the total budget.

The estimated budget for university and higher education on the other hand, amounted to AED3.72 billion, 6.2 percent of the total budget, with AED1.5 billion allocated to UAE University’s goals and programmes. AED1 billion was allocated to the Higher Colleges of Technology, and AED485 million to Zayed University. The healthcare and social protection provisions amounted to AED4.5 billion, 7.4 percent of the total budget.

The budget allocation to social rights guarantee programmes and the activation of community integration in the Ministry of Community Development amounted to approximately AED3.5 billion, representing 5.8 percent of the total budget. AED1.61 billion, 2.7 percent of the total budget, were allocated to the Sheikh Zayed Housing Programme, while the budget allocations to social benefits and pension programmes amounted to AED4.4 billion, 7.3 percent of the total budget.

The government sector was allocated AED22.5 billion, 36.5 percent of the total budget, with AED 2.4 billion, 4 percent of the total budget, set aside for the maintenance of clear policies that support the UAE’s global and regional relations. AED927.5 million were allocated for the development of the UAE judiciary’s performance with an objective of providing outstanding judicial services. The infrastructure and economy were allocated AED8.9 billion, 14.7 percent of the total budget, while social development was allocated AED21.6 billion, or 35.7 percent.

Projects undertaken by ministries and federal entities will be allocated AED3.5 billion, out of which aed891 million will go towards ministries’ projects, and AED922 million for projects aimed at developing and upgrading water and power stations in the country, which will be performed by the Federal Water and Electricity Authority.

An amount of AED1.443 billion will go for projects under the Sheikh Zayed Housing Programme, while AED204 million are to be allocated to the UAE Space Agency projects, and AED25 million to the Emirates Red Crescent.

An amount of AED11 million will be utilised for projects of the Ministry of Education, in addition to the AED244 million that were allocated to establish Police and Civil Defence centres, and a Headquarters for the Directorate of Naturalisation and Residence, and scientific laboratories.

Projects undertaken by the Ministry of Infrastructure Development will receive AED483 million, and AED41 million for projects by the Ministry of Health and Prevention. Projects by the Ministry of Foreign Affairs, and the Ministry of Justice, will be allocated AED63 million and AED27 million respectively. Projects by other ministries will be assigned a cumulative AED22 million.

AED2 billion has been set aside to supporting government innovation, through the launch of the Sheikh Mohammed bin Rashid Al Maktoum Innovation Fund. It will provide financing solutions and support for innovators to turn their ideas into projects, and in turn support the national strategy for innovation and achieving the UAE Vision 2021.

In line with the standards issued by the International Monetary Fund, IMF, regarding the government financial statistics, the Ministry of Finance has adopted a functional classification of government expenditure initiative since 2014. The initiative focuses on classifying government expenditure according to the social and economic goals sought.

This classification will in turn facilitate financial analysis procedures, and will showcase the effectiveness of governmental financial provisions for public services, in addition to enabling international comparisons with countries that implement the same functional classification system.