ISLAMABAD: The International Monetary Fund (IMF) has raised serious concerns over Pakistan’s long-standing governance and corruption vulnerabilities, urging the government to immediately launch a 15-point reform agenda aimed at restoring transparency and accountability. The findings were released in the IMF’s long-awaited Governance and Corruption Diagnostic Assessment (GCDA), a report whose publication is a prerequisite for the approval of a $1.2 billion loan tranche next month.
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According to the assessment, Pakistan could potentially increase its GDP by 5 to 6.5 per cent over five years if it implements key governance reforms within the next three to six months. The IMF has called for ending preferential treatment for influential public-sector entities, ensuring transparency in the workings of the Special Investment Facilitation Council (SIFC), and placing stricter checks on the government’s financial powers through greater parliamentary oversight.
The report highlights systemic weaknesses across state institutions, noting persistent corruption risks linked to flawed budgeting, inadequate fiscal reporting, and poor management of public resources—especially in procurement, capital spending, and the oversight of state-owned enterprises. It also points to an overly complicated and opaque tax system, compounded by weak enforcement capacity and limited administrative oversight.
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The IMF further noted that Pakistan’s judicial sector suffers from inefficiencies and outdated laws, undermining contract enforcement and property rights. It urged the government to remove procurement preferences for SOEs and mandate e-governance procurement for all public transactions within a year. Transparency around the SIFC was termed essential, with the IMF demanding immediate publication of its first annual report, detailing all investments, concessions, and decision-making rationales.
The assessment warns that corruption vulnerabilities continue to erode public trust, reduce tax collection, and diminish the effectiveness of public spending. It highlights that discretionary budget allocations often favour politically connected districts, leading to inefficient outcomes and low returns on public investment. The IMF stressed that confronting these weaknesses is crucial for sustainable economic reform and long-term growth.
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