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IMF Slams Pakistan's SIFC for Lack of Transparency, Warns of Investor Risk

Pakistan's Finance Ministry has acknowledged a severe lack of transparency in the Special Investment Facilitation Council's operations, a finding highlighted in a report for the IMF. The IMF warns that the SIFC's unclear decision-making and sweeping legal immunities damage investor confidence and policy stability. Despite being created to streamline investment, the council has failed to secure any major foreign capital while operating with overlapping mandates. To comply with IMF conditions, Pakistan has committed to publishing detailed SIFC reports, with a final version due by March 2027.

Key Points: IMF Criticizes Pakistan's SIFC Authority, Governance Crisis

  • IMF criticizes SIFC's unchecked powers
  • Ministry admits lack of transparency
  • SIFC has delivered no major foreign investment
  • Overlapping mandates with Board of Investment create confusion
  • Government pledges reform reports by 2027
2 min read

Pakistan's governance crisis deepens as IMF criticises SIFC's unchecked authority

IMF warns Pakistan's Special Investment Facilitation Council lacks transparency, weakening investor confidence and policy stability under $7B loan program.

"unclear decision-making mechanisms within the SIFC... create information gaps that heighten perceived governance risks - The Express Tribune"

Islamabad, January 9

Pakistan's Ministry of Finance has acknowledged that the Special Investment Facilitation Council lacks institutionalised transparency, an omission the International Monetary Fund warns could further damage investor confidence and weaken policy stability.

The admission appears in the government's 240-page Prime Minister's Economic Governance Reforms Agenda, as reported by The Express Tribune.

According to The Express Tribune, the ministry prepared the report to fulfil the requirements of the IMF's Governance and Corruption Diagnostic Assessment under the USD 7 billion loan programme.

The document notes that unclear decision-making mechanisms within the SIFC, especially regarding strategic investment concessions and regulatory relaxations, create information gaps that heighten perceived governance risks.

Established in 2023 to act as a single-window facility for investment after Gulf nations voiced concerns over Pakistan's bureaucratic disarray, the SIFC succeeded in removing some procedural obstacles.

However, major structural problems, unpredictable taxation, soaring energy tariffs, weak external buffers and limited fiscal space continue to overshadow investment prospects.

Despite its mandate to attract foreign capital in sectors ranging from agriculture and mining to defence, tourism and IT, the SIFC has not delivered any major foreign investment. Last month, its National Coordinator, Lt Gen Sarfraz Ahmed, publicly identified several bottlenecks inhibiting FDI inflows.

The Finance Ministry admits in its report that Pakistan still lacks consolidated, publicly available information on tax concessions, fiscal impacts and regulatory exemptions.

Without consistent disclosure, investors remain uncertain about the justification and consequences of the state's strategic investment decisions, as highlighted by The Express Tribune.

To comply with IMF conditions, the government has pledged to publish the first draft of the SIFC's annual report in December and finalise it by March 2027.

The IMF has also raised concerns over Articles 10F and 10G of the Board of Investment Act, which grant sweeping powers and immunity to SIFC officials, potentially diluting accountability. The Fund further criticised the parallel functioning of the Board of Investment and the SIFC, arguing that overlapping mandates fuel confusion and weaken governance.

The IMF has urged Pakistan to address deeper structural issues rather than create multiple bodies with conflicting roles, as reported by The Express Tribune.

- ANI

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Reader Comments

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Priyanka N
It's sad to see a neighboring country struggle with such deep governance issues. The military's involvement in economic bodies (like the Lt Gen as National Coordinator) rarely leads to good, transparent outcomes. The IMF's conditions are harsh but necessary. Hope they get their act together for the sake of regional stability. 🤞
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Aman W
March 2027 for a final report? That timeline itself shows how unserious they are about reforms. By then, the economic situation could be even worse. Investors need clarity today, not in three years. This is why our companies are hesitant to do business across the border, despite the potential.
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Sarah B
From an international investor's perspective, this is a major red flag. "Sweeping powers and immunity" for officials is the exact opposite of what a transparent market needs. The IMF criticism is spot-on. Until these fundamental governance risks are fixed, any talk of attracting FDI in IT or mining is just wishful thinking.
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Karthik V
The core issue is the "unpredictable taxation" and "soaring energy tariffs" mentioned. No fancy council can solve that. You need political will for tough, structural reforms. Creating the SIFC seems like a shortcut that failed. The IMF bailout keeps them afloat, but real change has to come from within.
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Meera T
While it's easy to criticize, we should also look at our own house. Do we have perfect transparency in all our investment bodies? That said, the scale of the problem there is immense. Granting immunity to officials is a terrible precedent. Hope they listen to the IMF and fix this for the

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