Pakistan has agreed to major changes in its Sovereign Wealth Fund (SWF) after concerns from the International Monetary Fund (IMF) over its structure and authority.
According to Beyond Time News, the government will strip the SWF of its power to sell state-owned assets and restrict it to a basic holding and management role.
Key Changes to SWF Structure
Under the revised plan, the SWF will only manage state-owned enterprises and focus on improving their performance. It will no longer be allowed to:
- Sell or privatise assets
- Raise loans or issue guarantees
- Make investments or lend funds
- Enter public-private partnerships
All revenue generated will be transferred directly to the government instead of being retained by the fund.
IMF Approval Linked to Legal Reforms
The IMF has made approval of the SWF’s operations conditional on parliament passing the required legal amendments. Until then, the fund will remain inactive.
Pakistan has also missed earlier deadlines to introduce these changes, leading to stricter oversight from the IMF.
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Stronger Oversight and Transparency
The revised framework requires all future asset sales to follow transparent, competitive international procedures with full disclosure, including ownership details.
Board appointments will be made through a merit-based process to limit political influence and ensure better governance.
Background
The SWF was created in 2023 to manage stakes in major state-owned companies, particularly in the energy and banking sectors, with plans for future divestment. However, the IMF raised concerns over its governance and direct asset-sale powers.
Broader IMF Programme
Alongside these reforms, Pakistan has made limited progress on its wider privatisation agenda. So far, Pakistan International Airlines is the only major asset moving forward in the process.
The IMF is expected to approve the next tranche of $1.2 billion later this week, subject to compliance with reform commitments.
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