Issuer Statement Regarding EFF Says Seeing Measures As Sudden, Unexpected Reflects Lack Of Factual Awareness
Finance Minister Muhammad Aurangzeb speaks during a Reuters interview at the 2025 annual IMF/World Bank Spring Meetings in Washington, DC, US, April 25, 2025. Photo: Reuters/ File
The Ministry of Finance clarified in a statement on Sunday that there is nothing new in the IMF’s Extended Fund Facility (EFF) conditions. It stated that the Memorandum on Economic and Financial Policies (MEFP) is a continuation of the agreed reform agenda to be implemented in phases for the country’s economic stability and sustainable growth.
At the start of the IMF program, the Government of Pakistan presented its proposed reform policies, which the IMF incorporated into the MEFP in phases. The ministry stated that viewing these as sudden or unexpected new conditions reflects a lack of awareness of the facts.
Read: IMF conditions
The EFF reflects an agreed medium-term reform strategy, with the government already implementing many of the reforms included in it. Medium-term structural reforms are implemented in phases, with new measures included in each IMF revision to gradually reach the final goals agreed upon at the start of the program.
The MEFP agreed after the second review is a continuation of the MEFP of the first review, the ministry said. The issue of publishing asset declarations of civil servants was included in the EFF from May 2024, with the current structural benchmark being the next logical step after amendments to the Civil Servants Act, 1973.
Improving NAB’s performance and autonomy was agreed in previous reviews. Strengthening NAB’s performance and collaboration with other investigative agencies is part of this continuity, a measure agreed before the Governance and Corruption Diagnostic Report. Giving provincial anti-corruption institutions access to financial information is part of anti-money laundering and combating the financing of terrorism (AML/CFT), which has been part of the EFF program since its inception, the ministry clarified.
The government discouraged informal channels to increase remittances, resulting in a 26% year-on-year increase in fiscal year 2025, with a 9.3% increase in remittances expected in fiscal year 2026. The government, in collaboration with the State Bank, is striving to reduce the cost of remittances, with the IMF including these measures.
Read more: IMF imposes 11 new conditions on Pakistan’s $7 billion bailout
The ministry noted that a study for the development of the local currency bond market was recommended in May 2025 and is now included in the program as a structural benchmark.
Furthermore, the statement highlighted that reforms in the sugar sector are an initiative of the Government of Pakistan itself, with the Prime Minister’s Office forming a task force under the leadership of the Energy Minister. The task force prepares recommendations in consultation with the provinces. This initiative is in line with the objectives of the EFF, which aims to reduce government intervention in commodity markets, and the IMF has therefore made it part of the MEFP.
Reforms in the FBR are part of the government’s broader revenue enhancement agenda, with the task force headed by Prime Minister Shehbaz Sharif himself, the ministry said. During the past year, the Transformation Plan was approved, the Tax Policy Office was established, and initiatives such as improvements to compliance risk management were implemented.
Separating tax policy from the FBR’s operational functions was a major step, with the preparation of the Medium Term Tax Reform Strategy a continuation of this process.
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Privatization of Distribution Companies (DISCOs) has also been part of the EFF program since its inception and is to be implemented in phases. Finalizing the terms of private sector participation in the privatization of Hyderabad and Sukkur electricity utilities is an agreed measure, according to the statement. Public Service Obligation agreements for seven major DISCOs are also a continuation of the agreed measures.
Amendments to the Companies Act, 2017, for regulatory reforms and improvement of the business environment are part of wider reforms. The concept note on amendments to the Special Economic Zones (SEZ) Act is the next step after the earlier SEZ review study.
Alternative measures in case of potential revenue shortfalls have consistently been part of the MEFP, the ministry noted, with the original May 2024 MEFP also including a structural benchmark to introduce a 5% federal excise tax on fertilizers and agricultural pesticides.
