Islamabad – The International Monetary Fund (IMF), in its recently concluded Governance and Corruption Diagnosis Assessment Report, has urged Pakistan to strengthen transparency, accountability, and efficiency in its fiscal management and development spending practices. The report, which is expected to be formally released by the end of this month, outlines a series of recommendations aimed at ensuring prudent use of public resources and reinforcing the supremacy of Parliament in financial decision-making.
The International Monetary Fund has asked Pakistan to spend money on the parliamentarians’ projects through regular approval processes by abandoning a special treatment and again urged to avoid mid-year budget adjustments without prior approval of parliament.
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One of the IMF’s central observations relates to parliamentarians’ development schemes, currently processed outside the Public Sector Development Programme (PSDP) framework. Unlike regular projects scrutinized by the Central Development Working Party (CDWP) or the Executive Committee of the National Economic Council (ECNEC), these schemes are approved through the Steering Committee on SDGs Achievement Programme, chaired by Deputy Prime Minister Ishaq Dar. In FY 2023-24, at least Rs61 billion was spent on such initiatives, with Rs70 billion earmarked for the current fiscal year. The IMF has recommended that these projects be integrated into the PSDP process to prevent duplication, misuse of funds, and weak oversight.
The Fund also highlighted the need to curtail the tendency of announcing new projects, urging that allocations for fresh initiatives be limited to 10% of the total PSDP to avoid overstretching scarce resources. The Planning Ministry has been advised to rationalize the development portfolio, retaining only high-priority projects and discontinuing politically motivated or low-impact initiatives.
On budgetary governance, the IMF emphasized the importance of advancing the publication of the Budget Strategy Paper to January, six months before the annual budget presentation in June. The paper should not only outline fiscal and macroeconomic forecasts but also include a review of the accuracy of past estimates. The report further noted that Pakistan’s Ministry of Finance did not present the paper before the federal cabinet this year, in violation of parliamentary law, underscoring persistent weaknesses in pre-budget consultations.
The IMF also reiterated its long-standing demand to abandon the practice of supplementary grants and mid-year budget adjustments without parliamentary approval. It recommended establishing a contingency pool to meet unforeseen expenses such as natural disasters, rather than relying on ex-post facto approvals. Recent allocations, including Rs5.8 billion for flood-affected areas and a Rs30 billion subsidy for remittances, were cited as examples of expenditures that bypassed initial budget approvals.
Additionally, the Fund recommended amending the Public Procurement Regulatory Authority (PPRA) law and rules to eliminate preferential treatment for state-owned enterprises and charitable organizations in government contracts, ensuring a fair, transparent, and competitive procurement system.
The IMF stressed that improving Pakistan’s fiscal management and transparency is vital for restoring investor confidence, optimizing public resources, and safeguarding parliamentary supremacy in financial governance.
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