The Cabinet approved the budget of the UAE for the fiscal year 2016 with a value of AED 48.557 billion with zero deficit. The UAE government seeks to manage financial resources efficiently to achieve sustainable development.
The biggest part of the budget has been allocated for the development and social benefits sector with a rate of 49.1%, for services and benefits that include education (13.44%), social development (41%) and health (8%).
A breakdown of the budget showed that allocations were assigned for the following sectors:
Government affairs: AED 20.6 billion
Infrastructure and economic resources: AED 1.71 billion
Social development: AED 19.95 billion
Social benefits: 3.92 billion
Financial investments/assets: AED 775 million
Other federal expenses AED 812 million
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.
MoF released the financial circular No. 2 of 2015 on the preparation of the general federal budget. This initiative is in line with the medium term 2014-2016 plan for ministries and independent federal authorities, and follows the UAE Cabinet’s Resolution No. 1/181 of 2008, which mandates the ministries and federal authorities to prepare the general federal budget on the basis of a three-year medium term plan, to adopt the principles of a zero-based budgeting system, and work as per the rules and regulations of the consolidated financial procedures manual for the preparation of the draft budget for the next year.
The ministry’s reasoning behind adopting a zero-based budgeting system is to have access to real cost through measuring the financial impact of all approved activities and comparing them to the cost of similar activities offered in the private sector. This falls in line with the implementation of the strategy that aims to improve the management of the federal government, adhering to prudent fiscal policies and increasing sources of income, which in turn confirms the strength and durability of the UAE’s economic situation and its opportunity for growth, while providing and maintaining high levels of services for citizens and residents.
The budget, as well as income and expenditure estimates in government agencies were prepared and examined, in accordance with the provisions of the laws, in addition to rationalising public spending and controlling expenditure. This should not affect government entities in achieving their goals in an effective and efficient manner, as well as work on preparing a development budget that supports investment spending in production fields.