IMF report urges action on anti-corruption reforms over 90

• The lender requests public declarations of assets from senior civil servants.
• Revision of SECP, NAB leadership appointment frameworks requested.
• IMF calls for backlog-cutting program, updated property laws.

Islamabad: The Governance and Corruption Assessment (GCD) Report of the International Monetary Fund (IMF) has revealed the extent of widespread corruption at all levels of the state and called on Pakistan to implement more than 90 key recommendations to curb it. The News was mentioned.

The Fund has identified 15 priority areas where weak governance, deficiencies in the rule of law and corruption are undermining Pakistan’s development potential by an estimated 5% to 6.5% of GDP each year. The report is part of earlier moves to release a $1.2 billion tranche under the $7 billion Expanded Capital Facility (EFF).

Of the 92 main recommendations in the action plan, the GCD urges measures to strengthen accountability and integrity among senior federal civil servants through the publication of their asset declarations by 2026.

It also recommends introducing risk-based verification of these declarations and reviewing and strengthening the legal framework for the appointment of the heads of key supervisory bodies, the Competition Commission of Pakistan (CCP), the Securities and Exchange Commission of Pakistan (SECP) and the National Accountability Bureau (NAB), to ensure a merit-based selection process that is transparent and credible.

The IMF recommended 12 major action plans for the rule of law, which include: establishing a program to reduce the backlog of cases, especially for trade disputes, with progress published online; creating an action plan to update the legal framework for contracts and property rights, culminating in a draft Civil Procedure Code for parliament; introducing procedural changes to set deadlines and reduce delays in contract cases; and setting up a task force to propose efficiency reforms for contract enforcement, aligned with good practices such as automated processes.

Further recommendations include locating all state land and its controlled entity in a central database under the Ministry of Finance. publication of clear rules-based procedures for the transfer of state land and a semi-annual list of all such transfers with their value.

It proposes a performance evaluation methodology for courts and judges, with the first results for relevant courts and special courts to be made public.

It also calls for the creation of standardized principles for the appointment and tenure of judges, ensuring compliance in commercial courts; strengthening integrity and conflict of interest rules for the judiciary while increasing fiscal transparency; launching an annual public report on integrity measures, including complaints statistics; expanding, institutionalizing Alternative Dispute Resolution mechanisms alongside the introduction of the Arbitration Bill; and preparing a multi-year judicial reform strategy to improve institutional performance and service delivery in Pakistan.

To address governance weaknesses, the IMF recommends publishing a tax simplification strategy by May 2026 to streamline rates, exemptions and legislative authority, with annual progress reports and demonstrated reductions in exemptions. strengthening the FBR’s governance by improving its structure, reducing field office autonomy, strengthening HR practices and strengthening risk management; strengthening the FBR’s accountability by publishing PRAL audit findings within 12 months and a public report on its response to major audits; improving the top-down budget process to avoid in-year adjustments without prior parliamentary approval, while a contingency reserve is used for flexibility; and enhancing the transparency of the Public Sector Development Program (PSDP) by incorporating MPs’ plans.

It also recommended establishing full institutional independence of the Auditor General of Pakistan in terms of accountability and oversight. It proposes strengthening the investigation and prosecution of money laundering by removing legal ambiguity around key convictions; strengthening the independence and effectiveness of the National Accountability Office through stronger appointment processes, investigative capabilities and internal accountability; and considering the creation of a central authority to collect, digitize and publish asset declarations of high-level public officials.

The report reveals elite involvement in the sugar sector, which has benefited for decades from favorable policies, subsidies and regulatory loopholes due to the nexus between industry tycoons and political leaders.

Many sugar mill owners, who hold government positions, have secured highly recommended prices and protective tariffs, ensuring profitability at the expense of competitiveness. During 2018-19, officials associated with the industry allowed significant subsidized exports, creating domestic shortages and price hikes.

A subsequent FIA investigation found that mill owners conspired to create artificial shortages and manipulate prices by speculative hoarding and laundering of profits through fake accounts. Although the investigation named political heavyweights as culpable, accountability was limited to occasional crackdowns.

The GCD evaluation report has also identified several shortcomings in public investment management, including failure to protect funding for approved projects leading to significant project delays and cost overruns.

This is exacerbated by a weak Single Government Account framework that undermines effective control of government cash balances. The current debt management structure is complicated by multiple entities with overlapping roles, which hinder decision-making and coordination.

Weak monitoring and accountability mechanisms extend to the management of financial and non-financial assets and state-owned enterprises. Public procurement remains fragmented, privileged state parties who can exploit their favorable position to capture markets and rents.

Information gaps further undermine the procurement accountability framework which, while in place, is rendered ineffective by multiple, often overlapping, levels of accountability between government agencies.

The absence of a clear tax policy and weak internal controls give autonomy to tax officials.

In addition, overlapping responsibilities among coordinating bodies such as the Economic Coordination Committee, the Securities and Exchange Commission of Pakistan (SECP) and the Special Investment Facilitation Council (SIFC) limit parliamentary control and transparency in decision-making.

The SIFC needs to develop explicit protocols for actions and enhanced transparency arrangements for oversight and accountability.