IMF asks Pakistan to end federal funding in provincial projects

As the cash-strapped country is awaiting a $7 billion bailout programme, the International Monetary Fund (IMF) has put another demand on the table that averts the federal support for provinces.

The global lender asked the government to review its Public Sector Development Programme (PSDP) for the current fiscal year and stop financing the provincial project.

Following the IMF dictations, the secretary to planning and development, Awais Manzur Sumra, informed the Senate Standing Committee on Planning and Development and Special Initiative that the government has decided the funds for unimportant projects would not be released despite allocations in the budget.

He said the authorities would review the PSDP projects and submit the report to the IMF by December.

Mr Sumra added the IMF wanted to review the PSDP plan 2024-25 and directed Pakistan to stop federal funding for provincial development projects.

He further said that the demand of the IMF was part of the $7 billion Extended Fund Facility (EFF) for 37-month on which both parties had reached a staff-level-agreement on July 12, while the Executive Board has not approved the programme yet.

According to the Secretary, PSDP for 2024-25 included 66 projects for Punjab worth Rs175 billion and 64 projects for Sindh worth Rs488 billion.

Under the PSDP, 111 projects worth 429 billion were decided to be executed in Balochistan, and 20 projects in Khyber Pakhtunkhwa worth Rs72 billion.