The PIF has blocked PwC from advisory services for one year without detailed explanation. PwC has significantly expanded in Saudi Arabia, where it generated £1.97 billion in revenue over the past year. The PIF’s decision reflects ongoing economic changes related to Vision 2030, crucial for the consulting sector’s growth even amid global downturns.
The Public Investment Fund (PIF) of Saudi Arabia has decided to prohibit PricewaterhouseCoopers (PwC) from undertaking advisory work for a duration of one year. Despite inquiries, neither the PIF nor PwC provided explanations regarding this decision. Notably, PwC had established a significant presence in the kingdom, employing over 2,000 individuals across various cities such as Riyadh and Jeddah since earning a license for its regional headquarters two years prior.
PwC offers a range of non-audit services, including mergers and acquisitions as well as tax advisory. The firm has reported that the Middle East region was the fastest-growing part of PwC UK over the past fiscal year. In the twelve months leading to June 30, PwC generated £1.97 billion ($2.5 billion) from the Middle East, indicating a 26% growth compared to the previous year—reflecting robust regional performance despite a projected slowdown in global consulting demand in 2024.
The PIF’s action follows its crucial role in supporting Saudi Arabia’s Vision 2030 economic transformation plan, which encompasses around 100 portfolio companies, including ambitious projects like Neom. This mega-city initiative, along with others designed to enhance historical sites for tourism, has been instrumental in sustaining the consulting sector amid a global downturn. While PwC expects positive revenue trends in the Middle East, it has acknowledged potential challenges ahead.
In summary, the PIF’s one-year advisory work ban on PwC highlights the complexities of the consulting market in Saudi Arabia amid significant economic transformation plans. Despite challenges, the region remains a vital growth area for PwC and competitors like McKinsey & Co. and Boston Consulting Group, buoyed by ambitious governmental initiatives. As consulting demand fluctuates globally, regional dynamics will continue to influence PwC’s future.
Original Source: m.economictimes.com
