Pakistan Plans IMF-Linked Governance Reforms For SOEs

Pakistan is preparing to introduce new legislation in parliament aimed at bringing more than a dozen major state-owned enterprises under standardized statutory governance and reporting frameworks, a move intended to meet a structural reform benchmark agreed with the International Monetary Fund before the end of the current month.

The proposed legislation seeks to fulfill a reform commitment that had previously been delayed under Pakistan’s ongoing IMF programme.

One of the legislative proposals targets large state-owned companies that were previously transferred to the Pakistan Sovereign Wealth Fund structure. These include key entities such as Oil and Gas Development Company Limited, Pakistan Petroleum Limited, Mari Petroleum Company Limited, National Bank of Pakistan, Pakistan Development Fund, Government Holdings Limited and the Neelum‑Jhelum Hydropower Project.

These entities were previously subject to regulatory oversight by the Securities and Exchange Commission of Pakistan. However, certain regulatory exemptions were granted when the companies were moved under the sovereign wealth framework, which had been designed to attract foreign investment.

Although the anticipated foreign investment did not materialize, the exemptions remained in place, raising governance concerns during discussions with the IMF.

A separate legislative package is also being prepared for other public sector institutions, including the Pakistan Broadcasting Corporation, Pakistan National Shipping Corporation, Pakistan Post and Pakistan Television Corporation.

Under the proposed reforms, these organizations would be required to adopt corporate governance and reporting standards comparable to those applicable to publicly listed companies. The measures are also expected to mandate the appointment of majority-independent boards to strengthen transparency and oversight.

Meanwhile, an IMF delegation led by Iva Petrova has been conducting consultations with Pakistani authorities since February 25 as part of the third review of the Extended Fund Facility as well as the second review under the Resilience and Sustainability Facility.

Officials indicated that discussions related to the upcoming federal budget have been partially deferred in light of regional geopolitical uncertainty and ongoing economic volatility, with further negotiations expected to resume in May.