Pakistan will have to move faster on changes to state owned enterprise laws as the International Monetary Fund has raised concerns over repeated delays and asked the government to complete the pending amendments before the Fund’s next Executive Board meeting.
The issue has become one of the sticking points in the ongoing fourth review of Pakistan’s IMF program. Pakistani officials told the Fund that work was continuing on several laws, but the government has already missed multiple deadlines set during previous reviews.
The IMF has now given Pakistan another deadline of mid November to bring the remaining SOE laws in line with the main State Owned Enterprises Act. The government had previously committed to completing the work by August 2026.
The legislation covers several major public sector organizations. Amendments have been proposed for the laws governing Port Qasim Authority, Gwadar Port Authority, Karachi Port Trust, State Life Insurance Corporation, National Telecommunication Corporation and Pakistan Railways. Three of the nine laws identified under the reform have already been passed, while amendments to the others are still moving through the approval process.
Wapda is among the issues receiving particular attention from the IMF. During an earlier review, Pakistan had sought an exemption for Wapda because of its strategic and essential role. The government had instead committed to improving its governance and financial structure, but officials were unable to report significant progress during the latest discussions.
The Fund is also pressing Pakistan to change the process for appointing the chairman of the National Accountability Bureau. Under the IMF program, amendments to the National Accountability Ordinance are due to be submitted to Parliament by January 2027, with the aim of making the appointment process more transparent and rules based.
Another part of the review involves corruption risks at public sector organizations. NAB is developing a methodology to assess such risks and has selected 10 entities from a list of 30 considered to be at high risk. Pakistan is required to complete the methodology by the end of October so NAB can use it to prepare measures for reducing corruption risks.
The IMF has also flagged delays in changes to the Sovereign Wealth Fund Act. The proposed amendments would clarify that companies owned by the fund remain subject to the SOE Act and SOE Policy and would establish additional rules for the fund’s role as an owner.
The proposed changes would also alter how dividends from companies owned by the Sovereign Wealth Fund are handled. Instead of retaining 50 percent of the dividends under the existing framework, the income would first go to the government, which would then decide how it should be distributed.
If Pakistan completes the review successfully, the IMF Executive Board could consider the case in November for a $1 billion disbursement under the Extended Fund Facility. The Fund has already released $4.2 billion of Pakistan’s $7 billion EFF program.
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