IMF seeks briefing on SIFC’s role

Concerns shown over impact of SIFC on tax collection and subsidies

ISLAMABAD: The International Monetary Fund (IMF) has sought a briefing from the Finance ministry on the Special Investment Facility Council (SIFC).

Sources said that technical level discussions are being continued between Pakistan and the IMF staff mission. These discussions will continue tomorrow despite the public holiday.

The lender has reportedly asked MoF for a briefing on SIFC which was formed to attract foreign investment in five key sectors including Energy, Mining, IT, Agriculture and Defence.

Sources said that the IMF is concerned about the impact of SIFC’s actions on tax collection and subsidies.

Sources said that the Pakistani side informed the mission team that the government under SIFC is making efforts to bring investment in the country. They also told the mission that UAE, Saudi Arabia and Qatar have shown interest in making investments in the aviation and Petroleum sectors.

Sources also said that France, Germany and South Korea have also been keen on long-term contracts in taking managerial control of loss making DISCOs.

In addition, the Finance ministry also shared proposals to bridge the external finance gap with the IMF team. The external finance gap will be filled by foreign direct investment which will start from January next year.

Sources said that the IMF team and finance ministry during the technical level negotiations also reviewed government guarantees, Central Bank Loans and External Payments.

It was revealed that the burden of government guarantees was also reduced to Rs 3.85 trillion from Rs 4.048 trillion. The target was to limit the burden of government guarantees to Rs 4 trillion by September 2023.

The IMF has also directed Pakistan to not to issue new guarantees and instructed the Pakistani side to place a bar on borrowing from the central bank.

Meanwhile, the economic team has also assured the IMF that external debt payments will not be delayed. In addition, the Single Treasury Account will also be implemented by the end of this month.

Shahzad Paracha
Shahzad Paracha
The writer is a member of Pakistan Today's Islamabad bureau. He can be reached at [email protected]

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