Federal budget 2021
The UAE Cabinet approved the federal budget for the UAE for the fiscal year 2021. AED 58.3 billion have been allocated. The federal budget continues to focus on both social and economic development.
The budget aims to expand development plans and projects to raise the standard of living for Emiratis and residents. A large share of the 2021 budget will be allocated to social development including social welfare, health and education.
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Federal Budget 2020
The UAE Cabinet approved a zero-deficit federal budget of AED 61.354 billion for the year 2020. This is the largest budget allocated since the establishment of the UAE. The budget is distributed amongst various sectors related to Emirati citizens and their services as follows:
- 31 per cent is allocated to social development
- 14 per cent is allocated to infrastructure and economic resources
- 6.5 per cent is allocated to social benefits
- 32.6 per cent is allocated to government affairs.
The budget amount was increased more than 300 times since the allocation of the first budget in 1971 and has been without deficit for the third consecutive year, thus, reflecting the strength of the national economy and the country’s abundant financial resources that can fund economic development projects.
Federal budget 2019
The 2019 budget was approved at a total value of AED 60.3 billion, allocated to various sectors with a focus on those directly linked to citizens’ well-being, health and education. The budget includes
- 42.3 per cent for community development
- 17 per cent for education development and
- 7.3 per cent for healthcare services.
Federal budget 2018
The federal budget allocated for 2018 was AED 51.4 billion, with increase of 5.6 per cent from that of 2017. The federal budget for fiscal year 2018 was allocated to the key sectors for the UAE, with the budget for Social Development and Social Benefits standing at AED 26.3 billion, equating to 43.5 per cent of the total budget. The UAE Government was allocated a total of AED 22.1 billion amounting to 36.5 per cent of the total budget.
Federal budget 2017
In late October 2016, the UAE Cabinet approved the federal budget draft submitted by Ministry of Finance for the fiscal year 2017, with a total spending of AED 48.7 billion as part of the five-year budget cycle 2017-2021.
Federal budget 2016
The UAE Cabinet approved the budget of the UAE for the fiscal year 2016 with a value of AED 48.557 billion with a zero deficit. The budget was in line with the initiatives and projects adopted in the Federal Government strategy and prepared in accordance with the principles of a zero-based budget.
Read more about the federal budget distribution and expenditure in different sectors.
Federal budget process
The federal budgeting process consists of five phases, namely: planning, preparation, reviewing, approval and execution.
Budget expenses and allocations are distributed to the six following sectors: Social development, social benefits, infrastructure and economic resources, government affairs, financial assets and investments, and other federal expenses.
Frame and steps
The financial year lasts from January to December. During the third month of the present financial year, MoF issues a circular that specifies the necessary steps for the preparation of next year's draft budget. This circular includes budget cap, approved strategic objectives, indicators, revenue forecast and the deadline for the federal entities to submit a draft budget to MoF.
Each federal entity determines its programmes, plans and Key Performance Indicators (KPIs) according to the strategic plan approved by the Cabinet within the budget cap. Entities submit their initial forecasts for revenue and expenses allocated to chapters, line items, programmes and activities agreed upon, along with performance measures and efficiency indicators.
After this, MoF carries out the following steps:
- It prepares an annual draft budget law.
- It prepares a draft resolution of the medium-term plan.
- It submits both drafts to the Cabinet for discussion and prepares them for final approval.
- It submits the draft law for the federal budget and the autonomous budgets to the Federal National Council (FNC) two months prior to the beginning of the fiscal year. This is to enable FNC to discuss and provide feedback on the draft.
- It submits draft law accompanied with FNC's feedback to the Supreme Council (SC).
- It informs all federal authorities about their allocations upon the issuance of budget law.
Read more about the federal budget's frame and steps.
MoF issues quarterly financial performance reports on the execution of the federal budget, along with final account summaries in the annual detailed reports of expenses and revenues.
Additionally, MoF issues a set of files that includes decrees, laws, circulars and manuals of the rules governing budgeting, preparing final accounts, closure of budgets, as well as all other means that ensure the provision of federal government financial resources management tools that ensure transparency and security of the financial system in accordance with best practices.
Refer to the reports on budget execution.
Read the figures relating to growth of federal budget over the years.
Ministry of Finance
It is the mission of Ministry of Finance (MoF) to manage and develop the financial resources of the Federal Government efficiently and creatively, through the implementation of effective financial policies and premium national and international relations for the protection and safety of the financial system in the UAE in accordance with the best practices.
Strategic Plan 2017-2021
Ministry of Finance has developed an ambitious but realistic Strategic Plan for the years 2017-2021 targeted at centralising and providing the highest levels of service to its diverse range of customers. The ministry took into account the significant impact of regional and international changes financially and economically while drawing up the strategy.
The main objectives of the Strategic Plan are to:
- improve the effectiveness and efficiency of planning and financial systems
- develop laws and legislations
- upgrade services
- diversify federal financial resources
- establish a tax system based on the fees collected through federal government services: value added tax, corporation tax and tobacco tax.
The Strategic Plan was prepared and developed with the following key considerations:
- The leadership vision and the direction of the UAE Strategic Plan
- Extensive analysis of external and internal factors that affect the performance of the ministry
- Analysis of questionnaires completed by influential groups of customers affected by the performance of the ministry
- The diagnosis of capabilities and key competencies within the ministry
- Analysis of resources and strategic potentials available to the ministry
- Best international practices in the management of financial resources
- Internal strengths and weaknesses, as well as the opportunities and external risks.
Local finance departments
Local departments of finance were established to supervise all financial and accounting affairs of the UAE local governments, in addition to issuing consolidated financial statements for the emirate's government. They are responsible for the development of the government's general annual budget and its execution in cooperation with all relevant local government entities.
Local departments of finance are responsible for concluding government contracts with suppliers, registering suppliers and opening an account for every supplier to facilitate the financial transactions with the local government.
Updated on 11 Mar 2021