Finance ministry’s report says lack of transparency in SIFC initiatives may weaken investor confidence

A report by the Ministry of Finance has acknowledged that limited transparency around initiatives undertaken by the Special Investment Facilitation Council (SIFC) could undermine policy predictability and weaken investor confidence. The observation is contained in the Prime Minister’s Economic Governance Reforms Agenda, a 240-page document released last week as part of Pakistan’s commitments under the International Monetary Fund Governance and Corruption Diagnostic Assessment, The Express Tribune reported. 

The report forms part of conditions attached to the $7 billion IMF financing programme and commits the government to improving transparency in SIFC operations. According to the report, the absence of structured public information on strategic investment initiatives, including those facilitated through the SIFC, creates informational gaps that elevate perceived governance risks. 

It said the lack of disclosure on concessions, fiscal implications, and regulatory relaxations could weaken the credibility of investment governance mechanisms.

The SIFC was established in 2023 as a single-window platform to facilitate investment, privatisation, and coordination among federal and provincial bodies, following concerns raised by foreign investors over fragmented decision-making. 

The council was mandated to attract foreign direct investment across sectors including agriculture, defence, infrastructure, logistics, information technology, telecommunications, energy, mining, and tourism. However, the finance ministry report noted that consolidated public information on investments facilitated by the SIFC remains limited.

The report stated that without systematic disclosure of tax concessions, policy exemptions, or regulatory relaxations, stakeholders face uncertainty regarding the rationale, cost, and outcomes of strategic investment decisions. It warned that this could blur the line between facilitation and discretion and reduce accountability.

As part of its IMF commitments, the government has assured that a first draft of an annual SIFC report will be submitted by December this year, with a final version due in March 2027. The report will include details of investments facilitated by the council, approved tax concessions, the fiscal value of those concessions, and progress on projects. A senior SIFC official said the council has so far not granted any concessions or exemptions.

The IMF has raised concerns over the powers granted to the SIFC under Article 10F of the Board of Investment Act, which allows regulatory relaxations for strategic projects, and Article 10G, which provides broad immunity to officials. The IMF said these provisions concentrate authority and could weaken accountability without greater transparency on how such powers are exercised.

The finance ministry report said addressing these risks requires institutionalised transparency, regular publication of structured investment information, and clarity on the implementation of Article 10F. The IMF has also pointed to issues arising from the parallel existence of the Board of Investment and the SIFC, noting that overlapping mandates create ambiguity in roles and accountability and could undermine efforts to improve the investment climate.