Coronavirus: Abu Dhabi announces stimulus package to strengthen economy
One of the initiatives specifies the settling of all approved government payables and invoices within 15 working days
The Abu Dhabi Executive Council announced an economic stimulus package, which fast-tracks the implementation of key Ghadan 21 economic initiatives to support economic activity, reduce the costs of living and facilitate business.
The move is in line with the directives of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the UAE Armed Forces, and chairman of the Abu Dhabi Executive Council, with the follow-up of H.H. Sheikh Hazza bin Zayed Al Nahyan, vice chairman of the Abu Dhabi Executive Council.
According to a report by WAM, His Highness Sheikh Mohamed affirmed that the newly launched stimulus package in Abu Dhabi and those launched recently by the UAE Central Bank and local governments provide a solid foundation to accelerate and advance the economy, as well as protect the UAE’s economic stability. Global markets and businesses have come under significant pressure in recent weeks owing to the Coronavirus pandemic.
His Highness Sheikh Mohamed gave directives to continue with all approved capital expenditure and development projects in the emirate, as well as further measures to preserve Abu Dhabi’s economic gains, prioritising startups and SMEs.
He also gave additional directives to formulate plans to stimulate strategic investment sectors, and to form a new committee headed by the Department of Finance, with members from the Department of Economic Development and local banks to review lending options to support local companies.
He stated that authorities will continue developing investment laws and regulations and ensuring their flexibility to maintain Abu Dhabi’s progressive economic development. Sheikh Mohamed expressed his confidence in the resilience of the national economy and its ability to navigate market fluctuations.
Measures include an allocation of $1.36bn for water and electricity subsidies for citizens and the commercial and industrial sectors. The move is intended to reduce the cost of living and support businesses, as well as subsidising electricity connection fees for startups until the end of the year.
For SMEs, an additional $817m has been allocated to the SME Credit Guarantee Scheme managed by Abu Dhabi Investment Office, ADIO, to stimulate the ability of SMEs to navigate the current market environment. For the financial markets, the Executive Council has allocated $272m to establish a market maker fund, to enhance liquidity and sustain balance between supply and demand for stocks.
Other initiatives include an exemption of all commercial and industrial activities from Tawtheeq fees, as well as exempting individual and commercial real estate registration fees for this year, suspension of bid bonds, and exempting startups of performance guarantees for projects up to $13.6m.
There will also be no annual vehicle registration fees for commercial vehicles and no traffic tariffs at toll gates in Abu Dhabi for all vehicles. In addition, up to a 20% rebate will be offered on rental value for the restaurant, tourism and entertainment sectors, and tourism and municipality fees for the tourism and entertainment sectors will be suspended for this year.
The initiatives include settling all approved government payables and invoices within 15 working days, waiving all current commercial and industrial penalties, and reducing industrial land leasing fees by 25% for new contracts.
The new committee established under the direction of H.H. Sheikh Mohamed and headed by the Department of Finance and including members of the Department of Economic Development and local banks, is tasked with reviewing lending options to support local companies. All measures and initiatives will take effect immediately, the WAM report stated.
