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ISLAMABAD:
Prime Minister Shehbaz Sharif on Wednesday launched economic governance reforms to address vulnerabilities identified in the International Monetary Fund (IMF) Governance and Corruption report, while taking up a 142-point agenda for institution building and rule of law.
The plan envisages conducting a national corruption risk assessment, making rules-based appointments in key institutions including the National Accountability Bureau (NAB) and improving their credibility in the eyes of the public.
During his speech at the launch ceremony, Shehbaz said that recommendations from international institutions have been incorporated into his reform plan, but that the government’s domestic agenda is fundamentally to “move from crisis management to institution building.”
Under one of the conditions of the $7 billion IMF bailout package, Pakistan was to publish a “governance action plan based on the recommendations of the Governance Diagnostic Assessment” to address critical governance vulnerabilities by December 31.
Following the ceremony at the Prime Minister’s House, the Ministry of Finance released the 240-page report on economic governance reforms, detailing all aspects that could help improve poor governance and address critical vulnerabilities related to corruption.
Earlier, the ministry had released the 186-page Corruption and Governance Diagnostic report to meet IMF conditions.
Shehbaz said that under his governance plan there are 59 priority actions and 83 complementary actions. This brings the total of these required actions to 142 that must be implemented over a period of the next three years.
The prime minister said the government’s focus would now shift from crisis management to institutional development. He said the people of Pakistan have paid a heavy price over the past two years and “we cannot go back to normal.”
Speaking on the occasion, Finance Minister Muhammad Aurangzeb said that the governance plan is based on three main streams: growth-oriented fiscal and public investment governance, improving market confidence and simplification of regulations and building confidence in legal processes.
The Ministry of Finance will act as secretariat to implement the action plan, while the UK Foreign and Commonwealth Development Office (FCDO) will provide technical support.
The ministry published a report indicating that, where relevant, the alignment (of the plan) with the IMF’s Extended Fund Facility will be reinforced through the IMF’s participation in these dialogues for the implementation of the plan.
Main actions
Pakistan has committed to the IMF to publish the SIFC annual report by June 2027. The draft annual report will be submitted in December 2026 and the final report will be submitted in March 2027.
The purpose of the report is to improve transparency with respect to strategic investments by producing and making public the first annual report of the Special Investment Facilitation Council (SIFC), including information on all investments it has facilitated, including concessions awarded along with detailed justification of the concessions and the estimated value of the concessions.
By June 2026, the government will also carry out a National Risk Assessment on corruption and within three months will form the national anti-corruption task force. The government will also identify the top 10 agencies with high corruption risks by June 2027. And by June 2028, it will publish annual reports of the top 10 agencies identified as most at risk and report on demonstrated risk reduction.
The IMF report had cited the NAB report, which showed that the anti-graft watchdog recovered Rs 5.3 trillion of embezzled money in the last two years alone.
According to the new action plan, by June 2026, the government will carry out a legislative review of the Anti-Money Laundering Act (AMLA) to remove ambiguities. It will also finalize and present an amended anti-money laundering bill for review by Parliament. These modifications will be notified by June 2027.
Within a year and a half, Pakistan will also build the capacity of judges by implementing training schemes on AMLA.
The IMF has also set a deadline of one and a half years to strengthen the accountability and integrity of public officials. You will implement a computerized system to generate risk-based cases for verification.
The verification will be done by the FBR and other relevant agencies. Using the risk factor model, cases receiving red flags will be reviewed by a committee of the Establishment Division, FBR, FIA and NAB to decide whether the matter should be formally investigated; and if so, by what agency.
By June 2027, the government will notify SECP rules that should codify the entire process of appointment of SECP chairman, commissioners and political board members.
The government will ensure the timely start of appointment processes, at least three months before the end of the term, and will also make public an annual governance and transparency report approved by the SECP policy board.
It would also review the appointment process of the NAB chairman by June 2027 and would increase the public credibility of the NAB as an anti-corruption agency, according to the published plan.
In six months, Pakistan will form a methodological working group that will be mandated to carry out a diagnosis to efficiently and effectively resolve economic disputes, monitor judicial and judicial performance, reduce pendency and monitor the implementation of recommendations. By June 2027, Pakistan will publish an annual performance report with recommendations on economic disputes.
To increase the efficiency, integrity and performance culture of the tax administration, by June next year the government will establish multiple executive committees and subsequently prepare and implement plans over a two-year period to improve the capacity and integrity of tax officials.
The government will formulate a time-bound tax simplification strategy with draft tax policy provisions to: reduce rate schemes, reduce special regimes, reduce excessive withholding at source, reduce advance taxes, rationalize tax exemptions and harmonize federal and provincial taxes. These measures will be designed to aim for revenue neutrality in the medium term.
The government will impose a 10% cap on new PSDP projects and prioritize high-impact PSDP projects by June 2027. In a year and a half, it will avoid mid-year cuts in development spending and develop a mechanism to link constituent demands with resource allocations. However, under the plan, unforeseen revenue shortfalls will have to be adjusted in PSDP funding.
New Public Procurement Rules 2025 will be prepared in accordance with international best practices and processed for cabinet approval which will not explicitly contain any preferential treatment for state-owned enterprises.
