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Dubai Seeks Efficient System to Raise Quality of Procurement, Warehouse Management

The Law seeks to develop an efficient system for government entities to further raise the quality of their procurement and warehouse management. AFP
The Law seeks to develop an efficient system for government entities to further raise the quality of their procurement and warehouse management. AFP
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Dubai Seeks Efficient System to Raise Quality of Procurement, Warehouse Management

The Law seeks to develop an efficient system for government entities to further raise the quality of their procurement and warehouse management. AFP
The Law seeks to develop an efficient system for government entities to further raise the quality of their procurement and warehouse management. AFP

Dubai Ruler, Vice President and Prime Minister of the United Arab Emirates Sheikh Mohammed bin Rashid Al Maktoum issued a law on Contracts and Warehouse Management in Dubai Government.

The Law aims to create a framework and set standards for regulating procurement processes of government entities in line with the vision of Dubai Government to meet the highest global benchmarks in this domain, a statement said Thursday.

The Law seeks to develop an efficient system for government entities to further raise the quality of their procurement and warehouse management, and to create unified government procurement processes to achieve the highest levels of financial efficiency, it said.

The Law also seeks to foster integrity, transparency and equal opportunities among suppliers and provide a legal framework for automating the procurement and warehouse management operations of government entities as part of achieving Dubai’s smart transformation objectives, according to the statement, carried on Emirates News Agency (WAM).

The Law seeks to unify rules and regulations governing government contracts and warehouse management, ensure sound governance of procurement, asset disposal and inventory management, and preserve government assets.

The new legislation outlines the responsibilities of Dubai’s Department of Finance, the Smart Dubai Government Establishment and all units responsible for inventory management in government entities, it said.

The Department of Finance is tasked with creating guidelines for the governance of procurement, and asset and inventory management, as well as drafting policies and decisions related to unified procurement processes, it did.

The Smart Dubai Government Establishment is tasked with coordinating with public entities to create a unified online government system to manage contracts and inventory; developing associated systems and programs; ensuring proper operations, maintenance, updates and supervision of the system; and monitoring compliance of government entities with the system.

The Law stipulates the creation of a ‘Central Registry of Suppliers’ as part of the government’s unified online system for managing contracts and inventory. Furthermore, the Director General of each government entity is authorized to create an ‘Inventory and Valuation Committee’ to manage inventory and assets.

The Law does not apply to commitments made by government procurement departments to projects and programs supported by the government, especially those relating to small and medium enterprises registered under the Hamdan bin Mohammed Program for youth projects.

The Law will be effective from January 1, 2021.

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Saudi Arabia Raises $12 Billion in International Bonds Amid Strong Demand

Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
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Saudi Arabia Raises $12 Billion in International Bonds Amid Strong Demand

Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).
Skyscrapers are seen in King Abdullah Financial District in the Saudi capital, Riyadh. (Reuters).

Saudi Arabia has raised $12 billion from global debt markets in its first international bond issuance of the year, attracting bids worth nearly $37 billion. This demonstrates strong investor appetite for Saudi debt instruments.

The issuance comes just two days after the approval of the 2025 annual borrowing plan by Minister of Finance Mohammed Al-Jadaan. The plan estimates financing needs for the fiscal year at SAR 139 billion ($37 billion). The funds will be used to cover the projected SAR 101 billion ($26.8 billion) budget deficit for 2025, as well as repay SAR 38 billion ($10 billion) in principal debt obligations due this year.

The National Debt Management Center (NDMC) announced on Tuesday that the issuance includes three tranches: $5 billion in three-year bonds, $3 billion in six-year bonds, and $4 billion in ten-year bonds. Total demand for the bonds reached $37 billion, exceeding the issuance size by three times and reflecting robust investor interest.

The NDMC emphasized that this issuance aligns with its strategy to broaden the investor base and efficiently meet Saudi Arabia’s financing needs in global debt markets.

According to IFR, a fixed-income news service, the initial price guidance for the three-year bonds was set at 120 basis points above US Treasury yields. The six-year and ten-year bonds were priced at 130 and 140 basis points above the same benchmark, respectively.

Strong demand allowed Saudi Arabia to lower yields on the shorter-term bonds, further demonstrating investor confidence. Economists noted that the pricing above US Treasuries is attractive in the current market, showcasing trust in Saudi Arabia’s economic stability and financial strategies.

International confidence

Economic experts view this successful bond issuance as a testament to international confidence in Saudi Arabia’s robust economy and financial reforms. Dr. Mohammed Al-Qahtani, an economics professor at King Faisal University, said the move underscores Saudi Arabia’s commitment to diversifying financing tools both domestically and internationally. He added that the funds would support Vision 2030 projects, reduce pressure on domestic resources, and attract strong international investor interest.

The issuance strengthens Saudi Arabia’s ability to meet financial needs, expand its investor base, and establish a global financing network, he said, noting that it also facilitates entry into new markets, enabling the Kingdom to accelerate infrastructure projects and capital expenditures.

Dr. Ihsan Buhulaiga, founder of Joatha Business Development Consultants, described the 2025 budget as expansionary, aimed at meeting the financing needs of economic diversification programs. He stressed that the budget deficit is an “optional” one, reflecting a deliberate choice to prioritize Vision 2030 initiatives over immediate fiscal balance.

Buhulaiga explained that the Kingdom’s approach balances two options: limiting spending to available revenues, which would avoid deficits but delay Vision 2030 initiatives, or borrowing strategically to fund Vision 2030 goals. He said that the annual budget is just a component of the larger vision, which requires sustained funding until 2030.

He continued that Saudi Arabia’s fiscal space and creditworthiness allow it to borrow internationally at competitive rates, explaining that this flexibility ensures financial sustainability without compromising stability, even during challenges like the COVID-19 pandemic.

Saudi Arabia’s debt portfolio remains balanced, with two-thirds of its debt domestic and one-third external. As of Q3 2024, public debt stood at approximately SAR 1.2 trillion, below the 30% GDP ceiling. According to the Ministry of Finance, the budget deficit is expected to persist through 2027 but remain below 3% of GDP.

Buhulaiga highlighted the importance of capital expenditure, which reached SAR 186 billion in 2023 and is projected to rise to SAR 198 billion in 2024, a 6.5% increase.

He emphasized the government’s pivotal role in economic diversification, supported by investments from the Public Investment Fund (PIF), the National Development Fund, and its subsidiaries, including the Infrastructure Fund.

The PIF recently announced a $7 billion Murabaha credit facility, facilitated by Citigroup, Goldman Sachs International, and JPMorgan. Meanwhile, the NDMC arranged a $2.5 billion revolving credit facility earlier in January, compliant with Islamic principles, to address budgetary needs.

In November, Moody’s upgraded Saudi Arabia’s credit rating to Aa3, aligning with Fitch’s A+ rating, both with a stable outlook. S&P Global assigns the Kingdom an AA-1 rating with a positive outlook, reflecting a high ability to meet financial obligations with low credit risk.

The IMF estimates Saudi Arabia’s public debt-to-GDP ratio at 26.2% in 2024, describing it as low and sustainable. This is projected to rise to 35% by 2029 as foreign borrowing continues to play a key role in financing deficits.