The city of Dubai has become the first non-oil economy in the Gulf. This was made known as Dubai’s government’s 2016 budget revealed that just 6% of the budget will be funded from oil revenues.
Ruler of Dubai and Prime Minister of the UAE, H.H. Sheikh Mohammed, approved AED 46.1 billion ($13 billion) for the 2016 budget.
The 2016 budget increased by 12% from AED 41.7 billion ($11.3 billion) in 2015 to AED 46.1 billion ($12.5 billion) in 2016.
Dubai had no budget deficit in 2016, and instead posted an operating surplus of AED 3.4 billion ($0.9 billion).
How Dubai Generates its Revenue
Dubai generates 74% of its revenue from government fees and fines, from sectors such as services (logistics, real estate, hospitality, and social), trade, manufacturing and construction etc.
Nineteen percent of its revenue comes from Customs Duties and taxes on foreign banks.
Overall, oil contributes just 2% to Dubai’s economy.
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For 2016, Dubai’s budget will focus on the education, health, housing, and community development sectors; which will account for AED 16.9 billion ($4.5 billion) (37%) of the budget.
AED 16.6 billion ($4.5 billion, or 14%) of the budget will be spent on infrastructure, transport and economic development.
AED 9.6 billion ($2.6 billion, or 21%) will be spent on security, justice, and safety sector.
Despite falling oil prices, the government is aiming to keep diversifying the economy by investing in infrastructure.
The city of Dubai is known to have built its massive infrastructure with proceeds from the oil boom, as the government channeled revenues from oil into building infrastructure and a friendly environment for businesses to thrive in.
The transformation of the Dubai economy is a lesson for the Nigerian government on how visionary leadership and diversification of the revenue base of the economy will lead to the growth and development of the country.
What the government has to do is find sectors where Nigeria has a competitive advantage over other Nations and exploit this to the benefit of the country. The Government is looking to diversify into mining and agriculture which the president buttressed in his Media chat on Tuesday. However, the services sector is one key area where Nigeria can benefit from. Though we don’t have the right skill and attitude to work but we have the population that can make do for the shortcoming.