IMA (Institute of Management Accountants), the association of accountants and financial professionals in business, hosted a roundtable with some of the most influential CFOs in the UAE this week to discuss current economic affairs and perspectives on 2017. The session, which was attended by CFOs and VPs of Finance from wide-ranging industries such as oil and gas, banking, hospitality, Free Zone management, insurance, FMCG, and media and entertainment, revealed a positive outlook amid recent economic challenges due to the drop in oil prices. The ten executives discussed the ripple effect of the crisis to their respective industries but noted optimism in oil prices with the barrel price playing between $50-56. Oil prices are expected to increase further – to a possible $60/bbl. - bringing more stability to the region in the wake of extensive diversification initiatives by governments in the GCC to migrate away from oil-reliant economies. "The CFO Roundtable is part of our endeavor to gain insight into the economic landscape of the GCC and MENA region given that the business landscape is being reshaped by a combination of market volatility, globalization, and unprecedented innovation," said Hanady Khalife, Director of Operations, IMA Middle East/Africa region. "We are at a pivotal time when creating an ongoing exchange amongst finance leaders and key decision-makers are essential to prepare for the immediate future," added Khalife. Although governments in the GCC have dramatically reduced spending with countries like the UAE leading the way and Saudi Arabia following suit in diversifying their economy; the latter remains largely reliant on oil. Still, Saudi Arabia is the largest market in the GCC that is larger than all six council countries combined. The sense of urgency to diversify is manifested by the country's decision to invest in free zones amongst other initiatives. Finance leaders at the roundtable agreed it would take at least five years before Saudi Arabia can reap the benefits of diversification. Attendees all agreed on the prevalent opportunities in the GCC referring to indicators such as the notable increase in foreign direct investment and the number of company registrations in Free Zones. As far as the UAE economy is concerned, executives agreed the country was taking the right measures to pave the way for Expo 2020. With construction commencing in 2018 / 2019, this year is expected to be an adjustment period for the UAE economy. "Facing all these uncertainties and market changes can be daunting. Finance leaders who make decisions for their businesses and organizations need to develop a rigorous understanding of these and other emerging drivers of change to prepare for a range of possible future scenarios," said Alex Eng, CMA, CFM, CPA, Chair-Elect of the IMA Global Board of Directors. Eng called for the need for value creation and advised the finance leaders to approach the next phase with agility, cutting down operational expenditure while exploring expansion opportunities that can be realized at a lower cost. Eng, who works for a public Fortune Global 100 Company, labeled 2017 as the time to reduce short-term operational expenditure and focus on projects that have long-term value to increase organizations' absorption capacity and agility. The sentiment resonated with the banking sector's new lending strategy to approve complex and long-term transactions as part of their efforts to mitigate risk. Despite several indicators for a more positive outlook, consumer trust is at a low with people becoming more aware and conscious of their spending. This was unanimously perceived as a much-needed wiser mindset driving consumers to apply a more strategic approach to finances. The finance leaders agreed that this will result in reduced credit card debt which is good for the economy and would help increase liquidity. "The CFO and the accountancy function will play an increasingly central role in business. IMA is committed to helping them manage their enhanced strategic responsibility to add value to their organizations and help them support business sustainability," Eng noted. — SG
