The IMF will approve a loan of $1 billion to Pakistan after the government submits a report on financial management and corruption. This funding will help the country manage its budget and handle debt payments.
The IMF Executive Board will hold a meeting on December 8 to approve a $1.2 billion loan tranche for Pakistan. This includes $1 billion under the Extended Fund Facility (EFF), which is a loan program to support Pakistan’s economy, and $200 million for climate financing, which is funding to help Pakistan deal with environmental projects.
Pakistan and the IMF reached a staff-level agreement on October 14. Before the IMF Executive Board meeting, the Pakistani government will release the Governance and Corruption Diagnostic Assessment Report, which is required under the EFF loan program.
According to sources, the Ministry of Finance has resolved technical issues related to the report. The report’s deadline was originally set for July, then moved to August, and later October, but completion was delayed due to technical and factual differences.
Background of the Report
Earlier this year, the IMF officials visited Pakistan and met with the representatives of the Supreme Court, Law and Justice Division, Auditor General, NAB, FBR, and State Bank. The report highlighted weaknesses in the public financial system, gaps in the tax system, and corruption in bureaucracy.
It found that most government officials are not disclosing their own or their families’ assets, and there are weak systems to hold them accountable.
Importance of the Tranche
The IMF’s Executive Board will approve the release of the loan, which will help Pakistan manage its finances and pay off its debts.
