Dubai committed to financial sustainability — official
EMIRATE IS ABLE TO SERVICE ITS $32B SOVEREIGN DEBT
Maintaining financial sustainability is top priority for Dubai, said Abdul Rahman Saleh Al Saleh, The Director General of the Government of Dubai’s Department of Finance (DoF), at the ‘Meet the CEO’ event organised by the Government of Dubai Media Office (GDMO) on Saturday.
“The continuous improvement in the performance of Dubai’s public budget over the last five years has been driven by the directives of His Highness Shaikh Mohammad Bin Rashid Al Maktoum, VicePresident and Prime Minister of the UAE and Ruler of Dubai, 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,” said Al Saleh.
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. The budget surplus generated over the last few years through prudent financial policies was used to fund these projects as per the objectives of Dubai Plan 2021, while Expo 2020-related projects will be
totalling Dh30 billion by 2021, 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 five per cent of the general budget.
Al Saleh said that Dubai is able to service all its sovereign debts according to schedule. He also said that when needed, DoF 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.
No increase in fees
The finance chief said that Dubai is capable of meeting all its financial commitments without increasing fees and has no intention to increase government fees since a decision to freeze the fees was issued in March 2018. He said the fee reduction did not have a significant financial impact on Dubai as it has diverse sources of revenue.
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.