
PricewaterhouseCoopers (PwC), one of the globally renowned Big Four accounting firms, has announced its exit from Zimbabwe, effective 17 January 2025. This decision has sparked considerable debate about the long-term implications for the country’s business, corporate governance, and economic environment.
By Brighton Musonza
In this analysis, I aim to unpack the significance of PwC’s departure, situate it within the broader context of global accounting firms leaving Zimbabwe, and evaluate the potential outcomes for both the private and public sectors.
Why PwC’s Exit Matters
PwC is not just an ordinary accounting firm. As one of the Big Four (alongside Deloitte, Ernst & Young (EY), and KPMG), PwC carries significant global influence, providing audit, tax, and consulting services. The firm’s adherence to international accounting standards and its reputation for independence and professionalism make it a cornerstone for fostering transparency and investor confidence.
When such a globally recognised institution exits a market, the ramifications are not just symbolic—they are structural. It reflects systemic economic and governance issues and sends a loud message to both local and international stakeholders about the country’s operating environment.
1. Loss of Credibility and Investor Confidence
One of the most significant long-term impacts of PwC’s departure is the loss of credibility for Zimbabwe’s financial reporting and business environment. International investors rely heavily on the Big Four firms to ensure financial transparency and compliance with global accounting standards.
Without a global player like PwC, questions arise:
- How reliable will financial reports from Zimbabwean firms be?
- Can local audit firms maintain the same level of rigour and independence?
- Will investors trust financial statements audited by lesser-known firms, especially in a country with a history of economic mismanagement?
The exit of PwC follows a similar trend seen with Deloitte & Touche, which previously reduced its presence in Zimbabwe. This pattern raises red flags for international investors, deterring much-needed foreign direct investment (FDI). It also leaves listed companies on the Zimbabwe Stock Exchange (ZSE) in a precarious position, as they must convince investors of their adherence to global standards without the endorsement of internationally recognised auditors.
2. Decline in Corporate Governance and Compliance
The Big Four firms are known for their adherence to rigorous international auditing and ethical standards. Their presence often compels businesses to maintain proper corporate governance practices. With PwC exiting Zimbabwe, there is a risk of declining standards in corporate governance, particularly for companies already tempted to engage in creative accounting practices.
Local firms, while capable, may lack the institutional strength and global oversight mechanisms to resist pressure from clients. In Zimbabwe’s challenging economic environment, there is a high likelihood of:
- Increased financial misrepresentation.
- Corruption in the form of audit firms being coerced or incentivised to provide favourable audit opinions.
- Reduced enforcement of International Financial Reporting Standards (IFRS).
For instance, the controversy surrounding Tanganda Tea Company’s termination of Ernst & Young’s services over disagreements about hyperinflationary accounting demonstrates the growing tension between adhering to international standards and adapting to local economic realities.
3. Talent Drain and Reduced Professional Growth
The Big Four firms have traditionally been the employers of choice for accounting and finance professionals. Working for these firms offers exposure to international best practices, access to global networks, and opportunities to work in other markets.
PwC’s exit will have a ripple effect on Zimbabwe’s talent pool:
- Job Losses: Professionals currently employed by PwC Zimbabwe will face uncertainty. Although PwC’s local operations will transition to Vista Chartered Accountants, it is unlikely to retain all staff or offer the same career opportunities.
- Brain Drain: Talented accountants and auditors may leave Zimbabwe in search of opportunities in markets where Big Four firms still operate. This exacerbates the country’s existing problem of skilled labour migration.
- Reduced Marketability: Future generations of accountants trained in Zimbabwe may find it harder to gain recognition abroad without experience in globally renowned firms like PwC.
4. Erosion of Financial Oversight in Listed Companies
Zimbabwean companies listed on the ZSE and other exchanges are required to produce audited financial statements. The exit of PwC and other Big Four firms weakens the oversight mechanisms that ensure compliance with these requirements.
The ZSE and the Public Accountants and Auditors Board (PAAB) may need to step in with stricter regulations to maintain financial integrity. However, given the country’s history of regulatory inefficiencies, this is easier said than done. Investors may also find it difficult to compare financial statements from Zimbabwean companies with their international counterparts, further alienating Zimbabwe from global capital markets.
5. Opportunities for Local Firms
While PwC’s exit is largely viewed as a setback, it does create opportunities for local audit and consultancy firms. Firms like Vista Chartered Accountants can potentially capture a larger market share and build their reputations in the absence of international competition. However, this will require significant effort to:
- Uphold high standards of professionalism and independence.
- Invest in training and capacity building to match the expertise of the Big Four.
- Establish credibility among both local and international stakeholders.
Additionally, localisation of audit and consulting services might result in faster decision-making, as local firms are more attuned to Zimbabwe’s unique economic challenges.
Broader Context: Multinational Exits from Zimbabwe
PwC’s departure is part of a broader trend of multinational companies scaling down or exiting Zimbabwe. Other notable examples include:
- Deloitte & Touche: Streamlined its operations in response to Zimbabwe’s economic instability.
- Standard Chartered Bank: Announced its exit in 2022, citing a shift in global strategy.
- Impala Platinum (Zimplats): Continues to face pressure due to Zimbabwe’s indigenisation laws and tax policies.
The common denominator in these exits is Zimbabwe’s challenging economic environment. Key factors include:
- Hyperinflation and currency instability.
- Dollarisation (Multicurrency).
- Strained foreign exchange availability.
- Policy uncertainty and inconsistent regulatory frameworks.
Conclusion: A Call for Reform
The exit of PwC from Zimbabwe is undoubtedly a significant development with far-reaching implications. It reflects deep-seated economic and governance challenges that Zimbabwe must urgently address to retain investor confidence and restore its credibility on the global stage.
While local firms may seize this opportunity to grow, their success will depend on their ability to uphold high standards and operate transparently. For Zimbabwe to attract and retain both local and international investment, bold reforms are needed, including:
- Stabilising the currency and reducing inflation.
- Improving regulatory consistency and transparency.
- Rebuilding trust in governance institutions.
Ultimately, PwC’s exit is not just a business decision—it is a symptom of Zimbabwe’s broader economic malaise. How the country responds to this challenge will shape its economic trajectory for years to come.