The consulting industry of Bahrain could be set for a growth spurt

05 June 2018

Currently worth around $80 million per annum, the management consulting industry of Bahrain could be set for a growth spurt due to certain converging factors, belying the small Kingdom’s relative economic standing.

The little brother of the GCC states, Bahrain’s management consulting market was worth approximately $80 million last year according to Source Global data, trailing Oman as the second smallest at around $100 million, and streets behind regional powerhouse Saudi Arabia, which accounted for nearly $1.3 billion of the total $2.8 billion market in the GCC.

Bahrain’s standing as the smallest GCC management consulting market is a fair reflection of the overall wealth and economic output of each GCC nation, with the UAE the next largest nation behind Saudi Arabia in terms of both GDP and its management consulting industry – worth nearly $800 million last year – and so on down to Bahrain, which is the smallest oil producer and economy of the GCC.

According to recent forecasts from analytics and consulting firm Oxford Economics, Bahrain is also set for a drop in GDP growth this year to 2.1%, before rising to 2.8% in 2019. While positive in the longer-term, Bahrain’s growth forecast is still pegged at a lower rate than every other GCC state, including the significant 6% prediction for Kuwait in the upcoming years.Size of the management consulting industry of BahrainYet, while an immediate economic boom mightn’t be on the horizon for Bahrain, several recent developments suggest its management consulting market may still be in for a boost. For starters, Saudi Arabia – set to return to double-digit growth figures for consulting this year – could potentially drag the tiny island state along in its wake, a political ally in ongoing ructions with Qatar, and one of the prominent states enforcing the ongoing embargo.

As gas-rich Qatar courts international allies, and develops closer trade ties with Oman as an embargo back-door, Saudi Arabia may bring Bahrain even closer to further reward the alliance and shelter it from other losses. A number of Bahraini officials have stated already that they view reforms in Saudi Arabia as a benefit to Bahrain rather than economic threat, and, along with recent cooperation in oil & gas and transport infrastructure projects, there may be further joint developments in areas such as tourism and entertainment.

Moreover, Bahrain’s treasury will undoubtedly benefit from recent news of the nation’s largest oil strike since it began production nearly a century ago, described as ‘dwarfing’ its existing reserves. While oil prices may remain relatively flat in the longer run, despite recent peaks, the boost to stocks will allow the Kingdom – which, according to the World Bank, has been fiscally hampered by high debt and limited savings – to more confidently pursue its forward-planning. It will also help drive inbound investment in other areas. 

Such conditions are ripe fruit for the management consulting industry. The public sector accounted for nearly a third of the GCC consulting spend last year, at a growth rate of 7.3%, while the largest growth segment was in area of technology at plus 36 percent – with fintech a key playing field heading into the future. And with Bahrain being a well-established financial hub (contributing over 17% of the country’s GDP), and the financial services industry being the largest private spender on consulting globally, the tiny Kingdom’s management consulting market may be about to outgrow its little brother status.

A strong consulting sector in Egypt can deliver a range of national benefits

04 October 2018

Developing a strong management consulting sector in Egypt should be seen as a broader strategic investment and as a matter of national interest, experienced local consultant Nadim Samna has argued in a piece for Egyptian English-language media outlet Ahram Online.

As one of the steadier management consulting markets in a growing, combined African sector worth an estimated $2.5 billion, the management consulting industry of Egypt still remains relatively underdeveloped, with its potential far from yet tapped. Doing so, and reaping the wider socio-economic benefits, will require a buy-in from a range of stakeholders, together helping to raise industry awareness, capacity and profile.

Already, the growing market potential can be perhaps evidenced through the recent arrival of international strategy and marketing consultancy Simon-Kucher & Partners with an office launched in Cairo in June, joining other global strategy and management names with a permanent presence in the country such as McKinsey & Company and PwC’s consulting wing Strategy& (formerly Booz & Co. – which established a local office in 2006).

“We’ll be one of the few international strategy consultancies in Egypt,” Simon-Kucher’s CEO Georg Tacke said at the time of the launch. “The market offers enormous potential. Egypt is one of the two strongest industrialised nations in Africa. Strong economic growth and excellently trained local specialists make the market particularly attractive to us. Geographically speaking, Egypt is an ideal starting point to enter the African market.”A strong consulting sector in Egypt can deliver a range of national benefitsNow, Nadim Samna, the founder and managing partner of local management consultancy Stratexis, who holds an MBA from INSEAD and has previously worked in senior management positions for Oliver Wyman in Dubai and for eight years in Paris with Kurt Salmon (which was acquired by Accenture in 2016), has argued that further developing the management consulting industry in Egypt is a matter of national interest.

Writing for the local media outlet Ahram Online, an English-language off-shoot of the state-owned news publication Al-Ahram, Samna outlines a range of public benefits which could flow from a greater strategic investment in consulting services and the development of the industry itself, including not only the maximisation of profits and improved international competitiveness of local companies, but through job creation and the establishment of a knowledge economy.

“On a macro level, consultants play an important role in modernising the economy by diffusing best practices, whose effectiveness has already been proven in other industries or markets,” Samna writes. “The strategic partnership recently signed between Egypt and the UAE to transform Egyptian governmental services is a good example of such benefits. Consultants in different areas will be responsible for transferring knowledge from the UAE to Egypt.”

Further, he argues, the management consulting industry can work with local universities to improve the professional services skills of graduates in a modern economy while also creating and providing jobs, citing the some 20 percent of currently unemployed Egyptians who hold advanced levels of education according to International Labour Organisation statistics, along with the rising 35 percent rate of local youth unemployment.

In turn, skilled consultants can export their services and generate inbound national revenues, with a recognised local management consulting industry then able to compete with other regional hubs as a go to market. “Building a talent pool in Cairo will drive international consulting firms to consider Cairo more seriously as a hub for their teams to benefit from the cost advantage of Cairo compared to Dubai,” Samna states in conclusion.