IMF asks for SOE law changes before board meeting

Voices concern over delay in amendments to half a dozen laws IMF Pakistan flag The International Monetary Fund (IMF) has expressed concern over continuous delay in amending half a dozen laws of state-owned enterprises (SOEs), particularly the lack of an effective governance model for the Water and Power Development Authority (Wapda), and has asked Pakistan to amend these laws before board meeting. During ongoing talks on the fourth review, the IMF mission evaluated progress on amending the National Accountability Ordinance to make the appointment process for the National Accountability Bureau (NAB) chairman transparent and rule-based, Pakistani authorities negotiating with the IMF told The Express Tribune. The IMF aired concern over the delay in amendments after Pakistan missed the fourth deadline to bring 9 to 10 laws of SOEs in conformity with the main SOE law. During each staff-level review, the government failed to meet the deadline and every time it sought a fresh date, the latest one was August 2026. Government sources said the IMF had now asked the authorities to align the laws with the SOE Act before mid-November. Subject to the successful conclusion of talks, the IMF board could meet in November to approve the next loan tranche of $1 billion under the Extended Fund Facility. However, the government has ignored such deadlines in the past. The IMF has already disbursed $4.2 billion out of the $7 billion package due to progress on fiscal and monetary matters. According to the last staff-level report, Pakistani authorities had sent amendments to six laws for parliament's approval in January 2026. The report added that the government now needed to make progress on the remaining three SOEs with dedicated laws. Last week, Secretary Finance Imdad Ullah Bosal told the National Assembly Standing Committee on Finance that the laws of Port Qasim Authority, Gwadar Port Authority, Karachi Port Trust, State Life Insurance Corporation, National Telecommunication Corporation and Pakistan Railways would be amended. Special Secretary Finance Qumar Abbasi also said that out of nine, three laws had already been passed and the rest were at various stages of approval. This week, the IMF reviewed the status of amendments in the National Bank of Pakistan law and the governance and financial structure of Wapda. During the third review, Pakistan had requested the IMF that Wadpa should be exempted from the list of entities whose laws were required to be amended due to its strategic and essential work nature. Pakistani authorities had assured the lender that they would take appropriate measures to improve the governance and financial model of Wapda. But the government on Tuesday could not report progress and another meeting was expected to take place with the IMF. Finance ministry spokesman did not respond to a question regarding discussion with the IMF about Wapda. But sources said Wapda was a sticking point and the government would have to address the concerns. Pakistani authorities gave an update on amendments to the NAB law to ensure that the appointment process for the chairman was transparent and it was not just limited to bureaucrats, generals and judges. According to the IMF condition, to enhance independence and transparency of NAB, Pakistan will submit amendments to the NAB Ordinance to parliament by January next year. The IMF is of the view that the transparency in appointment process is important to increase public credibility of the anti-corruption agency. The IMF got an update on identifying 10 public-sector entities, which faced a high risk of corruption. It was told that NAB was finalising the methodology and picked 10 out of 30 high-risk entities. Pakistan is also required to develop a methodology for corruption risk assessment to guide the development of an action plan by NAB to mitigate corruption risks in government agencies by the end of October. The methodological alignment as a preliminary step to the corruption risk assessment is critical to ensure its comprehensiveness and effective use of all relevant information sources. The IMF expressed concern over delay in amendments to the Sovereign Wealth Act. The extended deadline was March 2026. It wanted to ensure that the SWF-owned SOEs remained under the same high-quality governance structures and accountability standards as all other SOEs, including by amending Section 50 of the SWF Act to explicitly establish that the SWF-owned SOEs were subject to the SOE Act and SOE Policy and any necessary additional amendments to regulate and operationalise the SWF's SOE ownership functions with SWF being owner with appropriate oversight systems. The government has already proposed these amendments and the matter is now with the Senate Standing Committee on Finance. The current law empowers the SWF to retain 50% of dividends of the companies but it has now been proposed that the income will first go to the government and it will then decide about any further distribution.