Ministry of Finance..a year of successes and achievements

Maktoum bin Mohammed: A decent life for our people is a priority..and building a balanced economy is a basic approach

In the first year of His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and Deputy Prime Minister, assuming his responsibilities as Minister of Finance, the Ministry of Finance recorded many successes and achievements under global circumstances and challenges, which the UAE turned into opportunities and achievements.

The Ministry of Finance had a prominent role in these successes, as it is the key to prosperity and its sustainability, as it has boosted government spending on investment in people and the implementation of vital projects as an important pillar in supporting the national economy, and through a distinguished financial management that stimulates creativity that contributes to enhancing financial and economic stability and the well-being of citizens.

In order to maximize and efficiently develop the federal financial resources, the Ministry has implemented effective policies that have produced unparalleled success in bond and treasury projects for international and local investors, to diversify sources of income to ensure the preservation of the high standards of the UAE financial system.

During the past year, the ministry implemented a series of projects and financial policies, which were reflected in the strong economic growth of the national economy despite the adverse international conditions.

federal budget

The first of these projects was in October 2021 with the adoption of the federal budget for the next five years 2022-2026 by the Council of Ministers, with a total of 290 billion dirhams, to be the largest budget in the history of the UAE.

The Ministry was keen to present a long draft budget extending over five years to confirm the continuation of the goals set towards achieving national development and providing a decent life for the people of the Emirates through short and medium-term plans that follow each other.

58.9 billion dirhams were allocated for the first fiscal year 2022 from the five-year budget.

The adoption of this largest and largest budget in the history of the state confirms that a decent life for the people of the Emirates will remain a major priority, and that building a more balanced national economy is a basic approach to achieving the comprehensive development of the Union.

good life

When the Cabinet approved the budget, His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum affirmed that the approval is evidence that the UAE government continues to work to achieve the happiness of its people and provide security and a decent life for the people of the country, noting that a decent life for the people of the UAE will remain a major priority, and that Building a more balanced national economy is a fundamental approach to the overall development of the Union.

Housing Program

The Cabinet approved a policy of loans and financing for housing programs for citizens of the state within mechanisms that participate with the private sector, through financing new loans by banks operating in the state, provided that the federal government bears the benefits arising from those loans.

Accordingly, the Ministry of Finance, in coordination with the Ministry of Energy and Infrastructure, determined the financing options with the financing banks, the guarantees required to be provided by the federal government, and the costs involved and the implementation mechanism according to the best possible conditions.

The adoption of this policy came with the aim of enabling the Ministry of Finance to issue the largest possible number of approvals to meet the housing needs of citizens.

The new policy will lead to many results, most notably the issuance of 40,000 housing assistance decisions at a total cost of 32 billion dirhams. The state has completed 13,000 housing units for citizens.

creditworthiness

The second project, which was implemented by the Ministry with high professionalism and efficiency, was in the global markets, and this is evidenced by the bond projects for international investors as well as the treasury bond projects. The creditworthiness of the country and the desire of global investors to take advantage of the multiple and safe opportunities offered by the distinguished investment climate in the UAE.

These international bonds contributed to enhancing the competitiveness of the UAE in all fields, and supported financial and economic policies aimed at achieving comprehensive and sustainable development by diversifying sources of income, attracting foreign investments, and building a multi-opportunity investment environment, which confirms the commitment of the Ministry of Finance to work on developing the financial system in The state and the provision of innovative financial tools that will advance the growth of the national economy.

international bonds

On October 6, 2021, the Federal Government priced the Federal Government's first-ever US dollar-denominated multi-tranche sovereign bond package with a total value of $4 billion, consisting of a $10 billion 10-year tranche, a $1 billion 20-year tranche, and a Formosa bond tranche. For 40 years, worth $2 billion.

In an indication of the impressive success of this project, the subscription requests for these bonds exceeded the target level by 5.6 times, and with a total of $22.5 billion over the target issuance volume ($4 billion), this is the first record sovereign issuance in US dollars for a period of 20 years by a country within a council. Gulf Cooperation Council, and the transaction price recorded a price equivalent to the lowest level of interest rate differentials on sovereign bonds in the region, and requests witnessed a high demand from local banks, especially bonds with a shorter maturity, thanks to the level of liquidity of high-quality assets.

treasury bonds

The Ministry of Finance continued its global successes. On May 9, 2022, a treasury bond program was launched in cooperation with the Central Bank of the Emirates as the issuing and paying agent, to issue government treasury bonds denominated in local currency, within the program to issue treasury bonds worth nine billion dirhams for the year 2022 divided into six auctions. Until the end of the year, by 1.5 billion dirhams in each auction.

The bonds offered included tranches of varying durations between two and three years, and initially five years, followed by the issuance of a 10-year tranche.

important step

Issuing bonds denominated in the local currency in dirhams is an important step, as it plays a major role in developing the liquidity of the dirham in the local economy.

The bonds priced in dirhams will also find new investors and more attractiveness, such as those who want to buy dollar bonds, and this diversity in the issuance price of bonds attracts new investors towards government bonds.

brokerage fund

The Ministry of Finance led the efforts of the UAE, in coordination with the relevant authorities in the country, to establish the “Financial Intermediation Fund for Epidemic Prevention, Preparedness and Response” of the Group of Twenty, which was established with the aim of providing additional long-term resources to help developing countries better prepare for epidemics in the future. The UAE provided $20 million to support the fund.

Digital Procurement Policy

The Ministry of Finance has prepared the digital procurement policy for the federal government, and among its most important achievements is improving and accelerating the performance of procurement and contracting processes for the authorities, simplifying the procedures associated with suppliers, and adding national value-added requirements, which greatly contributes to supporting the local economy of the state, and motivating small and medium companies by granting them privileges to encourage them. To participate in government tenders.

• Adoption of the largest budget for a period of 5 years in the history of the country, amounting to 290 billion dirhams.

• Offering federal bonds in dollars and treasury bonds in dirhams... and a great deal of investor demand.

• 58.9 billion dirhams from the budget allocated for the first fiscal year 2022 to boost government spending.

• 40,000 housing assistance decisions at a total cost of 32 billion dirhams.

The network of tax agreements includes 73% of the countries of the world

The Ministry of Finance played an important role in the agreements to avoid double taxation on income and to protect and encourage investment.

The number of agreements concluded by the state reached 247, including 138 definitively signed agreements to avoid double taxation of income, five of which were signed within a year.

The signed agreements included approximately 73% of the world's countries.

The concluded agreements achieved financial savings for the public and private sectors and individuals, in particular what they achieve for sovereign funds, government institutions and the air transport sector, which enjoyed exemptions from income tax.

Strong international presence

The Ministry of Finance has established its active and strong presence in the international scene, as it participated in the meetings of the financial track within the Group of Twenty, and presented innovative ideas and solutions during its participation in those meetings. It also played an important role in agreements to avoid double taxation on income and encourage investment, and succeeded in expanding the network of agreements with Most of the business partners across the adoption of a successful negotiation strategy.

Follow our latest local and sports news and the latest political and economic developments via Google news