IMF rebukes Pakistan for fiscal mismanagement and lack of transparency

Islamabad [Pakistan] November 26 (ANI): The International Monetary Fund (IMF) has issued a stern critique of Pakistan's fiscal governance, highlighting chronic weaknesses in financial management, accountability, and transparency. Despite operating under its 24th IMF programme alongside the Ministry of Finance (MoF), the Fund expressed dissatisfaction over the country's inability to manage public resources effectively and demanded urgent reforms in its Single Treasury Account (TSA) framework to prevent political misuse of taxpayer money, as reported by Dawn.

According to Dawn, the IMF's Governance and Corruption Diagnosis Assessment (GCDA), Pakistan has repeatedly struggled with "weak budget credibility," resulting in governance failures, project delays, and inflated costs. IMF noted that despite some progress in recent years, Islamabad continues to demonstrate poor control over public spending and an alarming lack of coordination between institutions managing debt and cash flows. The IMF urged Pakistan to take decisive action within six months to strengthen cash management and expand institutional coverage under the TSA. IMF criticised the fragmented system in which multiple agencies share overlapping financial responsibilities, causing inefficiency and confusion. It was observed that weak monitoring mechanisms for public investment and state-owned enterprises further expose the system to corruption and misuse of authority.

The IMF also expressed concern over the widening gap between budgeted and actual expenditures, pointing to Rs9.4 trillion in parliamentary-approved overruns during the 2024-25 fiscal year, five times more than the previous year. The Fund said such discrepancies undermine parliamentary oversight and public trust in fiscal governance. The report additionally flagged constituency development funds controlled by lawmakers, describing them as a source of bias in capital investment and a means to exert political influence. The IMF warned that Pakistan's weak TSA structure and opaque financial practices allow idle cash reserves to remain in commercial bank accounts without accountability or clarity over interest earnings, as highlighted by Dawn.

The IMF recommended the immediate operationalisation of the Cash Coordination Committee (CCC) and Cash Forecasting Unit (CFU) at the Ministry of Finance, both of which are currently inactive. Without these reforms, the Fund cautioned, Pakistan risks deepening its fiscal instability and perpetuating corruption within its public finance system, as reported by Dawn. (ANI)

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