All IMF prior actions implemented: Miftah Ismail

ISLAMABAD: Minister for Finance Miftah Ismail said on Wednesday the government had implemented all prior actions for reviving the augmented $7 billion IMF programme except further reviewing the petroleum levy. He hinted that the petroleum levy would now be reviewed and the IMF Board would hold its meeting by the end of the next month after holidays.

The minister also announced that the government would lift the ban on imported goods, hoping that the pressure on rupee against dollar would start receding. This will happen because imports for July 2022 would slash down and would be standing at the maximum $4.3 to $4.4 billion.

However, top official sources confirmed that the government will have to jack up the petroleum levy further from August 1, 2022, for implementing the last prior action of IMF. Then the Letter of Intent (LoI) will duly be signed by the Minister for Finance and Governor State Bank of Pakistan (SBP) in the first week of August and Pakistan’s formal request for the revival of IMF program will be forwarded to the Fund’s Board for circulation among the members just 14 days prior to the possible meeting by August 25 or 26, 2022. “We have proposed changes in the privatization law because under the existing law, the government could not sell out one transaction such as Roosevelt Hotel for the last 36 years. There has been one bank that cannot be privatised since 2007. There are good professionals to run different state-owned enterprises (SOEs) but the existing law did not allow to go ahead with privatisation,” Minister for Finance Miftah Ismail said while addressing a seminar on improving governance and performance of SOEs organised by the Ministry of Finance here on Wednesday.

Meanwhile, the federal cabinet on Wednesday granted approval for Inter-Governmental Transaction Bill 2022, which will now be tabled before the parliament for passing it and converting it into an Act. Earlier, the cabinet passed it as Inter-Governmental Transaction Ordinance 2022 but did not forward it to the president for promulgation. Now the government has changed its mind and will pass this legislation in the shape of a bill with the consent of both houses of parliament.

Miftah Ismail said the IMF had assessed an external financing gap of $4 billion but it was not a part of prior action. He said the staff level agreement with the IMF was signed and the Fund staff assessed the external financing gap of $4 billion for the financial year 2023.

The government, he said, had implemented prior actions such as passing the budget for 2022-23, signing a Memorandum of Understanding (MoU) with the provinces to generate revenue surplus, notifying rebasing of power tariff, revising upward interest rate and LTTF rate and now the Petroleum Development Levy (PDL) would be reviewed. He said the government had already slapped the petroleum levy of Rs5 per liter on diesel and Rs10 per liter on petrol.

The minister said the government would get additional financing of more than $4 billion during the current fiscal year. He said one friendly country would invest in Pakistan’s stock market, and another country would provide additional oil on deferred payment and additional SDRs, probably in December 2022. Pakistan would sell out its assets with buy-back conditions.

He said that strengthening the anti-corruption law was a part of the structural benchmark, which was not new. It was a part of the IMF discussion since the completion of the 5th Review under the existing Extended Fund Facility (EFF) program. He said he had added two things to it as it should not be used against political opponents and, secondly, anti-corruption law should not become a stumbling block in the way of effective governance.

“We will hire experts from New Zealand and Singapore as well as representatives of the Pakistan Business Council (PBC) for making anti-corruption law of NAB and Public Procurement Regulatory Authority (PPRA) effective.” He said that corruption had increased and NAB, as well as PPRA rules, failed to control it.

The minister also conceded that every finance minister wished to go for higher growth, curtailing inflation and providing job opportunities but these were not the priorities for him right now. The government had averted a default but there was still a narrow path to avoid going into a crisis mode. “We will not commit mistakes at this juncture,” he concluded.