ISLAMABAD: Once again, the International Monetary Fund has targeted corruption and lack of accountability in Pakistan.
The IMF criticised weak accountability mechanisms for public resources and demanded improved transparency.
It said Pakistan must strengthen Single Treasury Account flows to prevent misuse of taxpayer money. The assessment appears in the IMF’s latest Governance and Corruption Diagnosis Assessment.
The report said weak budget credibility continues to undermine governance and macroeconomic stability.
It warned that Pakistan repeatedly fails to protect funding for approved public projects. This failure results in major delays and rising costs across development initiatives.
Fund Calls for Swift Action on Cash Management
The IMF demanded urgent steps within three to six months to improve cash management. It urged Pakistan to complete the sectorisation exercise for unified oversight of TSA coverage.
It also sought strengthened analytical tools and a forward-looking approach to cash forecasting. The report criticised Pakistan’s weak TSA framework and unclear institutional coverage decisions. It said fragmented responsibilities in debt management complicate coordination and delay decisions.
Mechanisms for monitoring state assets and SOEs were described as weak and ineffective. The IMF warned that institutions operating outside fiscal controls increase corruption risks.
Governance Gaps Enable Misuse of Public ResourcesThe lender said persistent gaps between written policy and actual practice create vulnerabilities. It warned that misuse of public authority for private gain remains a serious concern. Parliamentary oversight suffers due to large gaps between approved and actual spending. The National Assembly approved Rs9.4 trillion in expenditure overruns for 2024-25.
The increase was five times higher than the previous year’s overruns. Legislator-controlled development funds further distort spending priorities and weaken oversight. The IMF said excessive discretion in cash and asset management worsens inefficiencies.
Weak Oversight of Cash Balances Raises Red Flags
The report said fragmented cash holdings reduce the effective use of public funds.
It warned that unclear interest revenue flows raise concerns over transparency.
The IMF asked who benefits from interest earned on government-linked commercial bank accounts.
It said these earnings remain absent from national budget records.
The IMF stressed that fixing these gaps is essential for fiscal discipline.
Institutional Framework Exists but Lacks Implementation
The IMF acknowledged that the Finance Ministry has created a framework for cash and debt management.
However, it said implementation remains weak and inconsistent. It noted that the Cash Forecasting Unit is non-operational due to staffing issues.
It said the Cash Coordination Committee meets irregularly instead of monthly. This inconsistency undermines assessment of cash forecasts and review of buffer policies. The IMF warned that these gaps constrain the government’s borrowing programme.
