ARTICLE
14 March 2024

What Next? An Overview Of The Deloitte Exit From Zimbabwe

Deloitte Zimbabwe recently announced that it would be exiting the Deloitte Network on the 31st October 2024, and this would be achieved through a management buyout.
Zimbabwe Finance and Banking
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Deloitte Zimbabwe recently announced that it would be exiting the Deloitte Network on the 31st October 2024, and this would be achieved through a management buyout. The exit from the Zimbabwean market is a significant event in that a global brand is exiting the market, and the circumstances of the exit have brought focus on the prevailing operating environment but also the opportunities that may be available.

It is pertinent to note that Deloitte Zimbabwe constituted part of the Deloitte Africa cluster of firms which tallied to about 11. Other Deloitte firms constitute other regional and continental groupings outside Africa. It follows the Deloitte Africa cluster is spearheaded from South Africa. When one then considers the turmoil experienced by Deloitte South Africa in the preceding years, most notably the Tongaat Hullet and Steinhoff accounting scandals, it is reasonable to conclude that the resultant outlook would be risk mitigation. The press statement that announced this exit of Deloitte Zimbabwe from the Deloitte Network highlighted the need for "flexibility and agility" in addressing the demands of the Zimbabwean market, and one would also conclude this would be pivotal in the firm remaining competitive in the market. Indeed, the market for professional and consultancy services in Zimbabwe has been dwindling in the recent years and this may have contributed to the exit from the Zimbabwean market.

Whilst Deloitte's exit from the Zimbabwean market may be shrouded in a negative light, there are unique opportunities present for those participating in the professional and consultancy services industry. Below is a brief synopsis of the market dynamics:

  1. The exit of a world renowned brand or entity from any market presents opportunities, most notably in regards to market share. The phrase adopted in the announcement of "flexibility and agility" may indicate that Deloitte Zimbabwe was already struggling to retain and or obtain new business. Moreover, the indication that the local team feels a dissociation from the Deloitte Network will allow them to become flexible and agile may also be indicative of a lack of coherence on strategic roadmaps for the local market between the local team and Deloitte Africa as headquartered in South Africa by Deloitte South Africa.
  2. It is common cause that the Zimbabwean market is bedeviled by hyper-inflation, and in some instance weak and porous regulatory frameworks; and these issues heighten the level of risk of any professional services firm looking to create a sustainable business. It is however indicative of limited innovation and appreciation of the local operating market vis-à-vis any market of choice.
  3. There is a conversation to be had of the type of services the market is keen to take with a tussle ensuing over the traditional fragmented acquisition of services (i.e. acquiring same from a variety of service providers) or a singular service provider that provides comprehensive coverage of all services.

The opportunities are however present for discerning persons and entities that are both flexible and agile to adapt and thrive within this economy. Below are opportunities presented by the exit of a firm that would undoubtedly have held a significant stake of the market share in the professional consultancy services industry. The perceived advantages consist of the following: -

  1. Opportunity for a global brand like Andersen Global to consolidate on its pre-existing footprint with Zimbabwe and add other consultancy functions that would see the introduction of an agile, fragmented wholistic services spanning all professional services. There is an opportunity to take up some of the market share that the local Deloitte office may have lost or will lose with the exit from the Deloitte Network.
  2. The market is a rife ground for the introduction of innovative, adept and pioneering solutions that may be slow to take off elsewhere. Zimbabwe's hyperinflationary economy is breeding ground for innovation and creative business solutions. Indeed, this is what may have been meant when by the flexible and agile phrase highlighted as the reasons for the local office exiting the Deloitte Network. It shows that this market in particular thrives on innovation hence it is posited that Zimbabwe can become the hub of innovation for Andersen Global as the network also endeavors to guard against the constrictions that may have been suffered by the Deloitte office locally. It is suggested that whilst Zimbabwe has its own unique markets constraints and challenges, the same challenges are playing out globally on some level.

It can be concluded then that the exit of Deloitte from Zimbabwe brings with it opportunities and a requirement for existing stakeholders to fill in the vacuum created by such an exit.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

ARTICLE
14 March 2024

What Next? An Overview Of The Deloitte Exit From Zimbabwe

Zimbabwe Finance and Banking

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