ISLAMABAD: The federal government has failed to publish on time the Governance and Corruption Diagnostic Report, a key condition under the International Monetary Fund’s (IMF) $7 billion bailout programme. The report, which was due by the end of July, contains crucial recommendations to strengthen judicial integrity, tackle conflicts of interest, and improve governance and service delivery.
According to sources, the delay occurred because the IMF only shared a draft report shortly before the deadline, leaving insufficient time for finalisation and publication. With the final version still awaited, the government risks missing another linked condition: releasing a governance action plan based on the report’s recommendations by October 2025.
The IMF has recommended that the federal cabinet, the Supreme Judicial Council, and provincial high courts publish annual reports on judicial integrity. These should include data on complaints received, actions taken, and steps to strengthen accountability in the judiciary.
The draft report also proposed a multi-year judicial reform strategy to improve contract enforcement, tribunal efficiency, and case backlog reduction, alongside reforms in judicial appointments and tenure standards.
Finance Minister Muhammad Aurangzeb chaired a review meeting on Monday to assess compliance with IMF conditions ahead of the second review talks beginning September 25.
The IMF team will first hold meetings with the State Bank in Karachi before proceeding to Islamabad. Officials reported that while fiscal conditions had largely been met, progress on governance reforms—particularly in state-owned enterprises (SOEs) and judicial institutions—remains incomplete.
The government also missed the IMF condition of amending 10 laws governing SOEs by June 2025 to align them with the SOE Act. Some amendments are still at the initial stages and pending before the Cabinet Committee on Legislative Cases.
Additional slippages include granting tax exemptions on sugar imports, a violation of bailout terms, and revenue collection shortfalls. The Federal Board of Revenue (FBR) collected Rs11.74 trillion against the Rs12.3 trillion target and failed to secure revenue from retailers under the Tajir Dost Scheme. Moreover, provincial governments fell short of generating the agreed Rs1.2 trillion cash surpluses.
Despite these setbacks, officials described overall programme implementation as satisfactory and expressed confidence that Pakistan will secure the upcoming $1 billion tranche, though governance-related delays pose growing risks.
