Interview: Mohammed Ali Al Shorafa Al Hammadi
In what ways is Abu Dhabi encouraging private sector activity and attracting foreign investment?
MOHAMMED ALI AL SHORAFA AL HAMMADI: In line with the emirate’s long-term objective of increasing the contribution of non-oil sectors to more than 60% of GDP by 2030, promoting private sector activity is one of Abu Dhabi’s main concerns across our development plans and strategies. Indeed, the emirate has taken a number of steps to help boost private sector participation in the economy and attract foreign investment. Central to these efforts is a new law introduced to promote public-private partnerships (PPPs). The Abu Dhabi Investment Office (ADIO) will lead the UAE’s first PPP programme, which will work with government departments to identify key projects that would benefit from a PPP model. It also provides a new structure for regulating partnerships between the public and private sectors in key areas such as technology, urban infrastructure, education, health care, housing and transport. In addition, as part of Abu Dhabi’s development accelerator programme Ghadan 21, the private sector will benefit from discounted energy tariffs, smooth access to finance, and a Dh4bn ($1.1bn) research and development fund to support local companies and attract foreign investment.
In order to help businesses with cash flow, government entities and state-owned companies have been instructed to pay construction contractors and suppliers within 30 days of receiving an invoice. Businesses will also be able to utilise other strategies, such as ecotourism initiatives offering tax breaks and infrastructure funding for sustainable projects.
What are the immediate priorities of Abu Dhabi’s ongoing agenda to expand non-oil sectors?
AL HAMMADI: There have been growing concerns within both the public and private sectors about developments such as the internet of things, artificial intelligence, digitalisation and 3D printing. Accordingly, Abu Dhabi has committed Dh535m ($145.6m) for a new fund to invest in start-ups as part of Ghadan 21. The Ventures Fund, managed by ADIO under the umbrella of ADDED, has two programmes to boost venture capital available to Abu Dhabi start-ups and attract new fund managers to operate in the emirate. The fund was created to expand the emirate’s innovation ecosystem, and ensure that companies and projects are not constrained by limited capital.
Abu Dhabi’s industrial sector is well positioned to reap the benefits of incentives to boost manufacturing activities and broaden the industrial base. ADDED simplified the process of obtaining approval for Customs duty exemptions for imported raw materials, machinery, equipment and spare parts for industrial use, with the aim of reducing costs, enhancing the competitiveness of local products and attracting foreign investment.
How can the emirate develop its small and medium-sized enterprise (SME) ecosystem?
AL HAMMADI: SMEs are an important part of the government’s ongoing plans for socio-economic development. In order to accelerate the establishment of a robust SME ecosystem, ADDED will need to build strategic partnerships with key stakeholders on a local, federal and international level, as well as reinforce relationships with the private sector.
ADDED has recently announced a series of new initiatives to boost private sector activity by creating a licensing framework focused on speed, flexibility and simplicity, thereby reducing operating costs. For example, under the Abu Dhabi Instant Licence initiative, all licence applications are streamlined using a digital portal and approvals are processed instantly online.
In addition, the SME credit guarantee scheme will offer more accessible financing through a guarantee provided by the government to Abu Dhabi banks. The scheme guarantees up to 75% of a loan’s value, which will be provided to the bank in case of default, enabling banks to secure a certain level of lending to the market.
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