Pakistan Misses IMF Deadline to Amend Sovereign Wealth Fund Act

The federal government has failed to meet a key International Monetary Fund (IMF) condition to amend the Pakistan Sovereign Wealth Fund Act by December 2024. The IMF raised concerns about the fund’s governance structure, its ability to sell state assets without competitive bidding, and its reliance on central bank funding. Despite extensive work on the draft for the amended wealth fund law, it has been confirmed that the deadline was missed but discussions with the IMF are ongoing, reported Express Tribune. The amendment was meant to align the fund’s operations with international standards by prohibiting loans from the State Bank of Pakistan and mandating competitive bidding for asset sales. However, disagreements persist over whether these changes require legislation or could be implemented through rules. Pertinently, the Sovereign Wealth Fund Act 2023 governs state-owned entities such as Oil and Gas Development Company, Pakistan Petroleum Limited, and Neelum-Jhelum Hydropower Company. The amendments aim to bring these entities under the State-Owned Enterprises (SOE) Act’s governance framework and ensure all revenues are surrendered to the government. This is the third missed IMF target following tax collection shortfalls and will be reviewed during the review of Pakistan’s $7 billion loan program in the coming months.