ISLAMABAD
The Ministry of Finance on Sunday denied the imposition of any new conditions under the International Monetary Fund’s Extended Fund Facility (EFF) loan programme, saying that the lender’s structural benchmarks aligned with its own reform agenda.
“The measures outlined in the latest Memorandum of Economic and Financial Policies (MEFP) represent continuity, sequencing, and deepening of Pakistan’s agreed reform agenda under the IMF’s Extended Fund Facility, rather than the imposition of abrupt or unprecedented conditions,” the ministry said in a statement.
Clarifying the intent, context, and continuity of reform measures under the EFF while responding to the commentary regarding so-called “new conditions,” it said that the measures referenced are part of a phased, medium-term reform agenda agreed with the IMF, many of which are extensions or logical progressions of reforms already initiated by the government.
Noting that the EFF is designed to support countries in implementing medium-term structural reforms aimed at achieving agreed policy objectives, the finance ministry highlighted that reforms are implemented in a sequenced and step-by-step manner over the duration of the program.
“Each review builds upon prior actions to ensure that the ultimate policy goals agreed at the outset of the program are achieved.” “Actions under the EFF are structured as logical steps, with additional measures incorporated at each successive review.
The MEFP finalised following the Second Review of the EFF supplements the MEFP agreed during the First Review and reflects this phased approach,” the ministry added.
The statement also shed light on the process of IMF-government talks where Islamabad presents its planned policy reform initiatives.
Where the IMF assesses that these initiatives contribute to the agreed program objectives, they are incorporated into the MEFP and a result, many of the structural benchmarks and actions included in the latest MEFP are derived from reforms already undertaken or initiated by the government “rather than being externally imposed or newly introduced conditions”.
The Ministry of Finance further pointed out details and clarification of the “new conditions” as;This reform has been part of the EFF program since the initial MEFP in May 2024.
The current structural benchmark represents the second step, following the successful legislative amendment to the Civil Servants Act, 1973.
“A task force, notified by the prime minister’s office and chaired by the minister for power, has been mandated to recommend full liberalisation of the sugar market and propose a national policy in consultation with provinces.
Given its alignment with the EFF objective of reducing government intervention in commodity markets, the IMF has included this initiative as a structural benchmark,” it said.
The ministry added that the development of a comprehensive roadmap for the Federal Board of Revenue (FBR) was part of a broader domestic resource mobilisation reform agenda led directly by the prime minister.
“Key actions already taken include approval of the transformation plan, establishment of the Tax Policy Office, and strengthening of compliance risk management. This structural benchmark builds upon commitments made with the IMF in May 2024 and March 2025,” it said.
Further, the ministry called the requirement to develop and publish a medium-term tax reform strategy “a logical extension of earlier reforms, particularly the establishment and operationalisation of the Tax Policy Office to separate tax policy formulation from FBR’s operational functions”.
It said that the privatisation of distribution companies (Discos) had also been a core component of the EFF programme since its inception, adding that it was “envisaged to occur in phases”.
“Finalising preconditions for private-sector participation in Hesco (Hyderabad Electric Supply Company) and Sepco (Sukkur Electric Power Company) represents the next step following initiation of the process for the first batch of Discos. Additionally, the signing of Public Service Obligation (PSO) agreements with the seven largest entities reiterates an earlier programme commitment,” it added.
