Economic Affairs Division admits no clear audit mechanism for IMF loan utilisation

The Economic Affairs Division (EAD) has acknowledged that no transparent system currently exists to verify how loans obtained from the International Monetary Fund (IMF) are used — whether for budgetary support or balance of payments — a Senate committee was informed on Friday.

According to a news report, when asked about the Extended Fund Facility worth SDR 3.334 billion, the Finance Division’s representative was unable to provide a satisfactory explanation.

Committee members expressed concern that while aggregate figures were available, there was no audit trail confirming how IMF inflows were spent. The chairman noted that successive governments’ claims to reduce IMF reliance had not translated into transparent reporting on repayments and liabilities.

This revelation came during a meeting of the Senate Standing Committee on Economic Affairs chaired by Senator Saifullah Abro, which reviewed the utilisation and repayment of IMF funds, along with year-wise disbursements, interest payments, and external debt data.

Senator Hidayatullah Khan asked whether IMF funds categorised as balance of payments support or grants were utilised for structural reforms, while Senator Syed Waqar Mehdi questioned whether the utilisation targets had been met. 

Officials replied that although such targets existed, data visibility and system transparency remained limited. Responding to queries, they stated that budgetary inflows were received from the IMF in 2010, 2019, and 2020. 

According to the briefing, as of June 30, 2025, Pakistan’s total external debt and liabilities stood at around $126 billion, including $82.5 billion in external public debt and $43.5 billion in government-guaranteed debt.

The committee directed the EAD to provide complete year-wise data of external debt and IMF obligations from 2008 onwards, including project allocations, creditor categories, and the year of contracting. It stressed that verified data was essential for effective parliamentary oversight.