IMF Unhappy With Delay in Evaluation of State Owned Entities

The International Monetary Fund (IMF) has expressed concern about the delay in revising the evaluation of state-owned enterprises (SOEs) under its $3 billion Standby Arrangement (SBA).

The report is expected to be finished by the end of December 2023, reported a national daily.

The IMF set a structural benchmark for the $3 billion SBA project, and it was agreed that the Central Monitoring Unit (CMU) will deliver its first periodic report on the performance of SOEs to the federal government by December 31, using the most recent available data.

The Ministry of Finance informed the IMF that the CMU was established in September 2022 to improve SOE monitoring and oversight functions and provide better aggregate SOE analysis. The CMU will be fully operationalized with the hiring of the necessary personnel and the publication of its first periodic report on the performance of SOEs, utilizing the most recent accessible data.

The IMF staff emphasized the need to pass the new SOE law in early 2023, and urged quick progress on ownership policy, revising SOE policy Acts, deployment of CMU in the Finance Division by end-November, regular audits of key SOEs, and steadily shrinking state footprint.

The lender stressed improving governance of the state-owned assets through the implementation of the recently approved SOE law on ownership arrangements and role classifications with the government.

The Pakistani side informed the lender of its commitment to ensuring all recommendations for SOE evaluations and related changes in policies. It briefed that the government has currently set its sights on NHA, PNSC, Pakistan Post, and Pakistan Broadcasting Corporation.

Notably, the Pakistani side told the lender that the Auditor General has been asked to audit numerous SOEs due to their size and importance in their respective sectors. The relevant ministries are now defining the scope and ToRs in conjunction with all relevant parties.