The Saudi Public Investment Fund has suspended PwC from advisory roles for a year without clear explanation. This follows PwC’s establishment of significant operations in the kingdom, where it has experienced growth. Despite this success, the firm anticipates revenue challenges due to declining global demand for consulting services, particularly outside of the Middle East.
The Saudi Public Investment Fund (PIF) has imposed a one-year ban on PricewaterhouseCoopers (PwC) from undertaking advisory work. This decision has not been clarified in communications sent to the PIF’s portfolio companies. Furthermore, none of the representatives for the fund have provided additional comments, and PwC has not responded to requests for clarification.
This ban follows PwC’s acquisition of a license to establish its regional headquarters in Saudi Arabia, where the firm employs over 2,000 personnel in major cities such as Riyadh, Jeddah, AlUla, Al Khobar, and Dhahran. Across the Middle East, PwC operates from more than 20 locations, focusing on various non-audit services including mergers and acquisitions and tax consulting.
The Middle East has proven to be a significant growth area for PwC UK, with the region’s revenues reaching approximately £1.97 billion ($2.5 billion) for the fiscal year ending June 30, a 26% increase from the previous year. While the firm anticipates continuing robust growth throughout 2025 and 2026, they acknowledge potential challenges in sustaining last year’s levels of revenue growth.
The PIF plays a crucial role in Saudi Arabia’s Vision 2030 economic transformation plan, establishing around 100 portfolio companies, including the ambitious Neom project. This initiative aims to develop a new city on the western coast of the kingdom and enhance historic areas like Diriyah and AlUla into major tourist destinations. The partnership with the PIF has been vital for consulting firms navigating a challenging market.
Despite the booming region, PwC has reported a slowdown in global consulting demands for 2024, particularly in its Australian and Chinese markets, indicating a global trend of revenue decline as the sector faces increased pressure. The situation underlines the reliance many consultancy firms have on growth from regions like the Middle East.
In summary, the Saudi PIF has restricted PwC from advisory services for one year, a significant decision that affects the firm’s operations in a region where it has been experiencing notable growth. This ban arrives as PwC continues to navigate a challenging global consulting environment while playing a pivotal role in supporting the Saudi economic transformation initiative under Vision 2030. The implications of this decision may reverberate within the consulting sector, particularly for firms reliant on partnerships with sovereign wealth funds.
Original Source: m.economictimes.com
