Pakistan to enhance effectiveness of NAB to control corruption: IMF

Pakistan will address the impunity for corruption, allegations of politically motivated persecution and weak investigative capacities

KARACHI: The International Monetary Fund (IMF) said the Pakistani authorities will enhance independence and effectiveness of the National Accountability Bureau (NAB) to control the corruption and bad practices.

In its report released on October 11, the IMF said, “Pakistan will address the impunity for corruption, allegations of politically motivated persecution and weak investigative capacities. The authorities will enhance, as required, the independence and effectiveness of the National Accountability Bureau (NAB), following the expected ruling by the Supreme Court on the agency’s organic law.”

The report further said, “robust governance and anti-corruption institutions will contribute to inclusive growth, a level playing field and sustainability of reform efforts. Corruption, red-tape, and a weak business climate are long-standing structural bottlenecks holding back Pakistan’s socio-economic development.”

“Vested interests wield significant influence over government functions and can block or reverse reforms, IMF said in its report. In this regard, the authorities requested capacity development support from IMF staff to conduct a Governance and Corruption Diagnostic Assessment, and committed to publishing the report, including an action plan (end-July 2025).”

In addition, the IMF said, the authorities will formalize their intent to publish the full review report of its compliance with the UN Convention against Corruption through regulations to be issued by end-September 2024, once the review process is completed.

IMF further said that Pakistan will ensure accountability of public officials and deter illicit enrichment, asset declarations of high-level public officials (similar to members of parliament) and will be made publicly accessible through legislative amendments (end-February 2025), subject to safeguards of limited personal data. The asset declaration system will be digitalized through the FBR and subject to risk-based verification by the Establishment Division, it added.

IMF claimed that the first National Tariff Policy (2019-24) reduced the complexity of the tariff schedule and introduced duty-free access for many imported inputs. “As consultations are ongoing on the next phase (2025–29), reforms to the tariff schedule should reduce complexity and avoid the use of tariffs to promote industrialization and protect sectors unable to compete of be self-reliant, as such policies weaken exports, hinder participation in global value chains, and incentivize rent-seeking.

The fund said, “trade policies aimed at promoting specific domestic sectors, including export subsidies and local content requirements, should be discontinued as they are likely to promote resource misallocation and may violate international obligations.” The authorities should remain focused on reducing trade-weighted average tariffs and simplifying import/export documentation processes, the Fund added.

Authorities’ Views

The authorities were broadly aligned on structural reform agenda priorities, the Fund said. The authorities agreed on the way forward on the SOE reform agenda, including on the amendment of the SWF Act.

 Authorities concurred on the need to continue simplifying import/export processes and supported the reduction of regulatory and additional customs duties, but expressed concern over the potential impact of reducing custom duties on specific manufacturing sectors identified as vulnerable to import competition (including the automotive industry).

The authorities raised concerns regarding potential security and harassment risks in making asset declarations of high-level public official publicly available, and made distinctions with elected members of parliament, the fund said in its report.

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