Abu Dhabi: The UAE’s government is on track to issue a Federal Debt Law later this year that will allow the country to issue bonds and debt instruments on a federal level rather than the current emirate level, a top spokesman said.
“We have one clause outstanding, which is the debt ceiling and the servicing of the debt. Once we agree with the Central Bank, we will go to the Council of Ministers for approval, and after that is the FNC (Federal National Council) approval,” said Younis Al Khouri, undersecretary at the UAE’s Ministry of Finance.
Speaking to reporters on Tuesday, Al Khouri reiterated that the Ministry is aiming to issue the law in 2016. He had said earlier this year that the UAE is likely to ratify the law by the end of this year.
As matters stand, individual emirates within the UAE can issue bonds on a sovereign level, whereas the federal government cannot, considering the absence of such a law. Once the law is finalised, the UAE is expected to issue about Dh80 billion to Dh100 billion worth of debt.
A federal debt law is particularly significant this year as the UAE grapples with lower oil prices and hence, weaker government revenues, with ratings agencies expecting Abu Dhabi to resort to accumulated assets to cover deficits.
