Transparency and accountability are the foundation of any credible public financial system. They determine not only whether government resources are used wisely, but also whether citizens trust their state to act in the public interest.
In countries where public money is treated as a public trust, economic outcomes tend to improve, corruption decreases, and institutions operate with greater legitimacy. For Pakistan, a country struggling with fiscal pressures, rising public demands and global economic scrutiny, transparency and accountability in public financial mechanisms (PFM) are not abstract ideals; They are indispensable tools for national stability.
Public finances determine how a nation raises money, allocates it, and converts it into services. Pakistan’s fiscal footprint is enormous: the federal budget exceeded Rs 14.5 trillion in fiscal 2023-24, and provincial budgets together exceeded Rs 10 trillion. However, the results often fail to match the volume of spending.
Estimates suggest that Pakistan loses between 8% and 12% of public spending each year due to inefficiencies, leakages and weak controls, while development budgets routinely suffer from 20% to 40% underutilization.
These figures reflect a system where decisions are obscured by opacity and repercussions for poor financial management are rare. Without transparency, citizens cannot see; Without accountability, institutions do not need to act.
Recognizing these systemic gaps, Pakistan has become a focus area for global partners supporting PFM reforms. The European Union’s Public Finance Management Support Program (PFM-SPP) is one of the most influential initiatives, modernizing budget structures, improving data accuracy and enhancing fiscal transparency in Sindh and Balochistan.
EU support has helped provincial governments adopt IT-based budgeting, transparent allocation structures and financial reporting that is more accessible to citizens. These reforms provide a basis for long-term accountability.
The World Bank has also invested heavily in strengthening Pakistan’s financial governance. The Public Financial Management and Accountability Project to Support Service Delivery improves internal controls, audit capabilities and reporting systems.
Meanwhile, the Punjab Resource Improvement and Digital Effectiveness (PRIDE) program, valued at over $304 million, focuses on digitizing revenue systems, strengthening procurement transparency and reducing tax risks. Punjab’s shift towards digital payment systems and e-procurement has already begun to reduce manual interventions that historically created leakage opportunities.
Other international partners have played equally important roles. The Asian Development Bank (ADB) has supported Pakistan’s fiscal reforms for more than a decade, particularly in public sector management, procurement modernization and revenue mobilization.
ADB technical support has helped develop medium-term budget frameworks and strengthen fiscal discipline at the federal and provincial levels. As Pakistan continues to face limited fiscal space, ADB’s policy-based loans linked to governance reforms have become crucial.
The International Monetary Fund (IMF), although primarily known for macroeconomic stabilization, has increasingly emphasized transparency and accountability in fiscal governance as key conditions for support. Recent IMF programs require Pakistan to improve public disclosure of its debts, state-owned enterprise losses, public contracts and fiscal risks. Pressure from the IMF to improve reporting on “circular debt,” pension liabilities and collateral portfolios is forcing reforms that Pakistan can no longer delay.
The United States Agency for International Development (USAID) has long invested in financial and institutional strengthening, especially through revenue management reforms and support for provincial finance departments. USAID has helped digitize taxpayer services, improve audit training, and strengthen provincial budget systems, particularly in KP and Sindh, promoting more effective public spending.
The Foreign, Commonwealth and Development Office (FCDO), formerly DfID (UK), has also been a leader in public finance reforms in Pakistan. Its governance programs have supported evidence-based budgeting, monitoring public spending, and strengthening accountability institutions such as public accounts committees. The impact of the FCDO is visible in programs that improved budget transparency and improved the quality of financial reporting.
Germany’s GIZ has focused on capacity building, strengthening audits, tax administration and anti-corruption measures. GIZ-supported initiatives have helped train financial managers, standardize audit methodologies and develop tax reporting tools aligned with global best practices. Japan’s JICA has contributed to system modernization, including financial compliance training and supporting digital transformation in government departments.
Taken together, these reforms have already begun to reshape Pakistan’s PFM landscape. But the real test is whether this push will be institutionalized. As debt servicing consumes nearly 57% of federal revenue and development needs increase, Pakistan cannot afford structural inefficiencies; Every rupee saved through transparency becomes one rupee available for public welfare.
Digitized procurement alone can save up to 20 percent of procurement costs, a margin that could translate into Rs 400 billion a year, more than the federal budget for education development.
Equally important is the credibility Pakistan gains internationally when PFM systems are robust. Investors and development partners prioritize transparency, audit quality, competitive procurement and rules-based budgeting.
Countries with strong PFM frameworks obtain financing on better terms, attract private investment, and maintain more stable macroeconomic conditions. In this sense, transparency is both an internal reform and a global economic strategy.
To fully benefit from the reforms underway, Pakistan must move from simply meeting technical requirements to embracing cultural change. Budgets must be published in formats that citizens understand. Real-time dashboards showing project expenditures and procurement contracts should be publicly accessible.
Audit reports must be made available without delay and acted upon. Procurements must be fully digitalized and competitive. Performance-based budgeting should replace historical allocation patterns. None of this requires new laws; It requires strong implementation and political will.
Accountability also needs to be strengthened. The results of audits should lead to investigations, not be archived.
Performance gaps should trigger corrective actions. Financial misconduct should have consequences, regardless of your political affiliation. Supervisory bodies, including public accounts committees, finance departments and audit general offices, should be empowered. Whistleblower protection must protect those who expose corruption.
Ultimately, transparency and accountability extend beyond government. The media must report objectively on financial matters. Civil society must monitor budgets. Academia must analyze fiscal trends. Business associations must advocate for transparent taxation and procurement. Citizens must demand to know how their money is spent.
If Pakistan succeeds in incorporating transparency and accountability in all public financial mechanisms, with the support of the EU, World Bank, ADB, IMF, USAID, FCDO, GIZ, JICA and others, the transformation will be profound: reduced corruption, efficient spending, improved service delivery and renewed public trust.
A transparent system allows the public to see; An accountable system ensures that institutions act. Pakistan’s financial future depends on strengthening both, not episodically, but consistently, and with unwavering commitment.
The author is a public policy expert and heads the World Economic Forum’s Country Partner Institute in Pakistan. He posts at @amirjahangir and can be reached at: [email protected]
Disclaimer: The views expressed in this article are those of the writer and do not necessarily reflect the editorial policy of PakGazette.tv.
Originally published in The News
