Saudi Arabia-PwC split signals shift to local consultancies: What to know

The rumored fallout between Saudi Arabia’s Public Investment Fund (PIF) and global consultancy giant PwC is no routine contractual reshuffling. Rather, it reflects a deeper structural reality — a deliberate recalibration of the kingdom’s approach to public sector efficiency, fiscal optimization and strategic self-reliance.

Paced policy shift

Since 2019, a royal decree has mandated that government entities significantly curtail their engagement with foreign consultancy firms, permitting such partnerships only in narrowly defined circumstances where no domestic capability exists. Far from reactive, the policy is part of a long-term national strategy aimed at enhancing the efficiency and accountability of public sector spending and investment in national intellectual capital.

At its core, the policy reflects a broader transformation in how Saudi Arabia defines value, sovereignty and accountability within its institutional framework. This transformation has been driven by a hard-nosed pursuit of government efficiency and fiscal return on investment. Since 2017, Saudi Arabia has achieved a cumulative SAR 1.15 trillion (approximately $306.6 billion) in public sector efficiency savings, as reported during the Government  Expenditure Efficiency Forum in November 2024. This is part of a coordinated effort to optimize state spending, curb fiscal leakage and channel resources toward high-impact national priorities. The consulting sector, once a major beneficiary of public expenditure, has not been immune to scrutiny in this regard.

Indeed, over the past decade, foreign consultancies have played an outsized role in shaping Saudi Arabia’s modernization programs. According to a report by Source Global Research, the kingdom’s consulting market surged to $4.3 billion in 2024, firmly establishing itself as the largest among the Gulf Cooperation Council (GCC) states. Firms such as PwC, McKinsey, BCG, and others became deeply embedded in the architecture of Vision 2030,  ranging from megaprojects, like NEOM, to institutional restructuring efforts across ministries. Yet the question increasingly asked in policymaking circles is no longer who advises, but what value is delivered and at what cost.

What has emerged is a performance-based contracting regime in which global reputation is no longer sufficient to justify sustained engagement. The kingdom’s message to all external vendors is clear: If your work is not demonstrably impactful, strategically aligned and rooted in knowledge transfer, your position will not be preserved.

This strategic inflection point has exposed cultural and reputational challenges long associated with international advisory firms. It has become an open—and telling—joke among local stakeholders that many foreign consultants are more focused on wrapping up Thursday's presentation than staying through Friday, eager to catch a flight to grab a drink.  While anecdotal, such perceptions underscore the deeper concerns that some consultants lack long-term commitment, operational continuity and sensitivity to local priorities. The recalibration now underway indicates a desire to replace this transactional dynamic with embedded, long-term partnerships guided by national priorities and accountability.

National expertise, local content, enduring value

To institutionalize this shift, the Saudi government has advanced a structured Saudization policy — the nationalization of certain sectors through quotas — within the consultancy sector, requiring that firms increase their employment of Saudi nationals in core advisory functions. In April 2023, the Ministry of Human Resources and Social Development mandated that Saudis hold 35% of consulting roles, a figure raised to 40% in March 2024. This goes beyond a labor market reform to constitute a deliberate strategy to foster national intellectual capital, embed strategic insight in local institutions, and ensure that professionals with a vested interest in the Kingdom’s success drive future policymaking.

The Saudization of the consultancy sector is not a compliance exercise but instead amounts to a strategic realignment that challenges the long-standing, but outdated, assumption that foreign expertise is inherently superior. This perception was never rooted in a lack of Saudi capability, but in legacy contracting models that sidelined national talent in favor of global brands. Today, the kingdom aims to dismantle and replace that model. Backed by a robust educational pipeline and a policy framework designed to embed local content in strategic functions, Saudi Arabia is channeling its own talent into leadership roles to ensure that the value of advisory work is not simply delivered, but is also developed from within. 

Saudi Arabia’s push to localize the consultancy sector is grounded in the strength of its increasingly sophisticated national talent base. As of 2023, 2 million Saudis were enrolled in higher education, supported by a government investment of 189 billion rials ($50.4 billion). This investment is yielding results, with more than 65,000 graduates annually in business, administration and law, fields central to the consulting industry. Ministry of Education data also shows that more than 38,000 students have completed degrees in AI-related disciplines in 2023, with the number of graduates accelerating at an annual growth rate of over 71.6% since 2021, an indicator of the kingdom’s positioning in high-skill, knowledge-driven sectors.

Yet, despite notable progress in nationalizing the consultancy workforce, structural barriers to upward mobility within international firms operating in the kingdom persist. While Saudization quotas have successfully increased the numerical presence of Saudi professionals across consulting functions, access to leadership roles, particularly at the managerial and partner levels, remains disproportionately concentrated among foreign talent. There is growing recognition among firm leadership of the need to localize decision-making authority. However, the pathways to advancement are still governed by internal hierarchies and opaque organizational dynamics, often shaped by external corporate politics rather than local performance and policy alignment. As a result, although Saudi nationals are increasingly present within these firms, their ability to ascend to strategic roles that shape firm direction and client engagement remains limited.

This disconnect presents a long-term challenge: True localization cannot be realized by simply meeting Saudization quotas. Consulting firms must actively empower Saudi professionals to lead, influence and reshape the consulting landscape from within. While Saudization policies have initiated the shift, it is now incumbent upon consulting firms to recognize and act on the need for deeper structural change. In time, policy-driven demands for increased localization will likely become more stringent, pushing firms to adapt not just at the entry level, but throughout their leadership and decision-making positions.

Saudi Arabia’s pivot should not be viewed as a repudiation of international expertise. Rather, it is a realignment of expectations and accountability. Foreign consultancies still have a role to play, but only when they can prove value. The kingdom is not closing itself off to the world, but expanding the playing field for those prepared to be aligned with the kingdom’s strategic priorities while maintaining accountability.

The real story, then, is not who is leaving, but who is rising to meet the standard.