Saudi Arabia is sending a clear message: the era of unlimited spending on foreign consultants is over. In a major policy shift, the Kingdom is tightening its grip on external advisory contracts, signaling a new era of fiscal discipline and strategic planning as part of its ambitious Vision 2030 agenda.
For over a decade, international consulting firms such as McKinsey, Boston Consulting Group (BCG), and PwC have enjoyed a flood of lucrative contracts from the Saudi government and its sprawling network of state-backed entities. These firms were hired to support major economic reforms, build futuristic cities, and overhaul traditional sectors like healthcare, education, and tourism. However, officials are now questioning the return on investment for such extensive outsourcing.
This change has not happened overnight. It’s part of a broader recalibration of spending priorities, as the country seeks to reduce its dependency on oil revenues and move toward a more sustainable and diversified economy. In doing so, it is becoming more selective about which consulting firms it works with and how those services align with national goals.
From Generosity to Accountability
Consulting contracts in Saudi Arabia were once famously generous, earning the nickname “blank cheque” agreements due to their size, scope, and lack of stringent oversight. In some cases, consultants were paid hundreds of millions of dollars annually, often for open-ended projects with loosely defined deliverables. These deals were seen as necessary during the early stages of Saudi Arabia’s transformation efforts, particularly as local expertise was still developing.
But as Vision 2030 progresses, the country is becoming more results-oriented. Officials are demanding clearer performance metrics, fixed project scopes, and cost-efficiency from outside advisors. No longer content with vague strategy documents, the government wants hard data, measurable outcomes, and implementation support.
This shift has caught several consulting giants off guard. According to multiple industry insiders, some firms are being asked to renegotiate existing contracts or provide more detailed justifications for their fees. In a particularly bold move, the Public Investment Fund (PIF) – Saudi Arabia’s powerful sovereign wealth fund – recently barred PwC from bidding on new advisory work due to concerns over pricing and performance. While PwC has not publicly commented on the matter, it marks a significant turning point in how the Kingdom manages its relationships with external advisors.
Changing Market Dynamics
Despite the cutbacks, Saudi Arabia remains one of the most attractive markets for global consulting firms. The scale of development under Vision 2030 is immense: from the $500 billion Neom megacity to preparations for hosting the 2029 Asian Winter Games and the 2034 FIFA World Cup, the country is still pursuing transformative projects that require specialized knowledge and international experience.
However, the nature of demand is evolving. Rather than hiring large teams of generalist consultants, Saudi organizations are now looking for niche expertise – whether it’s artificial intelligence, green hydrogen, tourism strategy, or smart city infrastructure. This means consulting firms will need to upskill their teams, become more agile, and prove their value in increasingly competitive bidding environments.
Moreover, with budgets under closer scrutiny, Saudi entities are pushing back against overstaffed projects and long timelines. “There’s now a strong emphasis on local execution,” says a senior advisor working on government contracts. “They don’t want consultants who just write reports anymore. They want partners who can help implement solutions on the ground.”
Local Talent, Global Standards
Another factor driving this transformation is the push to develop local talent and reduce dependence on foreign advisors. Saudi Arabia has been actively investing in its human capital through education, training, and leadership development programs. New government initiatives aim to transfer skills from consultants to Saudi employees, ensuring that knowledge is retained within the country.
To this end, several consulting firms have been asked to include Saudization plans in their proposals – hiring more local staff, mentoring junior Saudi professionals, and partnering with local firms. Failure to meet these criteria could now disqualify firms from winning certain contracts.
The focus on localization is also leading to the rise of domestic consulting firms. While still smaller in size and capability compared to global players, local firms have the advantage of cultural understanding, cost efficiency, and growing credibility. Some are even forming alliances with international consultants to offer hybrid models that combine global expertise with local execution.
Risks and Rewards Ahead
While the tightening of consultancy budgets may cause short-term pain for foreign firms, the long-term impact could be positive – for both Saudi Arabia and the consulting industry. By demanding greater accountability and results, the Kingdom is encouraging better performance, innovation, and value for money.
However, there are risks too. Cutting back too quickly or too deeply could deprive some projects of the strategic guidance they still need. Also, if local capacity cannot be built fast enough, the transition could slow down key reforms or cause bottlenecks in large-scale initiatives.
Still, most experts agree that the overall direction is sound. After years of free spending, Saudi Arabia is entering a new phase of its transformation – one that values efficiency over excess, substance over style, and long-term impact over quick fixes.
The Bigger Picture
Saudi Arabia’s decision to curb consultancy spending is not happening in isolation. It reflects a global trend where governments and corporations alike are reassessing the cost and value of external advisory services. The COVID-19 pandemic, geopolitical tensions, and growing pressure on public budgets have all contributed to a more cautious approach toward outsourcing.
In Saudi Arabia, however, the shift is particularly significant because of the size of its Vision 2030 ambitions. The Kingdom’s future depends not just on bold ideas, but on disciplined execution. As it navigates this next chapter, consultants will still have a role to play – but they’ll need to earn their place at the table.
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