The International Monetary Fund has added a new set of structural conditions to Pakistan’s $7 billion Extended Fund Facility, taking the total number of reform requirements to 64 within just 18 months of the programme’s approval. The additional conditions, outlined in the IMF’s staff-level report for the second review, signal a sharper focus on governance failures, corruption vulnerabilities, loss-making state-owned enterprises, and deep structural distortions in key commodity markets, particularly sugar and wheat.
According to the IMF, the new conditions are aimed at strengthening institutional capacity, improving transparency, and increasing private sector participation across the economy. The Fund said these measures are critical to unlocking sustainable growth, reducing fiscal and contingent liabilities, and dismantling entrenched elite capture that has historically undermined economic performance and policy credibility in Pakistan.
Governance reforms have entered a more intensive phase under the revised programme. The government is now required to publish online asset declarations of all high-level federal civil servants by December 2026, with plans to later expand the requirement to senior provincial officials. Banks will be granted access to these declarations to identify discrepancies between reported assets and declared income. In parallel, the National Accountability Bureau will lead a comprehensive, risk-based action plan targeting the ten highest-risk government agencies by October 2026, following findings from the Governance and Corruption Diagnostic that highlighted severe systemic weaknesses.
State-owned enterprise reform remains a central pillar of the programme. Nearly all nine statutory SOE laws must be amended and submitted to the National Assembly by August 2026, after earlier delays pushed back the original deadline. Amendments to the Sovereign Wealth Fund law are also required by March 2026 to ensure transparent divestment procedures and alignment with the broader SOE governance framework. While the IMF noted progress in staffing the central monitoring unit and improving reporting, it said transparency remains insufficient.
Under the programme, all SOEs are required to adopt business plans, statements of corporate intent, and IFRS-compliant financial statements within the year. Public service obligations must be clearly identified, cost, and contractually defined ahead of the FY27 budget cycle. Although approval of a bid for First Women Bank Limited was described as a positive step, the IMF warned that Pakistan must accelerate divestment efforts, noting prolonged delays in preparations for a second bidding round for Pakistan International Airlines and the need to advance the first batch of power distribution companies to the bidding stage.
The IMF has also mandated deep reforms in agricultural commodity markets. A National Sugar Market Liberalisation Policy must be adopted by June 2026, requiring federal and provincial governments to agree on licensing rules, trade permissions, zoning restrictions, and the removal of price controls across the value chain. The Fund described sugar reform as a critical test of political resolve. In the wheat sector, the programme calls for non-distortive procurement policies, transparent reserve management, and wheat releases only during officially declared emergencies to encourage private sector investment and innovation.
Tax administration reforms have been intensified following repeated underperformance. Pakistan must publish a comprehensive Federal Board of Revenue reform roadmap by December 2025, detailing priority reforms, staffing needs, expected revenue impacts, and key performance indicators. At least three priority reforms must be fully implemented next year. A separate medium-term tax reform strategy is also required by December 2026.
Additional conditions cover private sector participation in HESCO and SEPCO, amendments to the SEZ and Companies Acts, assessments of remittance costs and cross-border payment bottlenecks, development of the local currency bond market, and improvements in statistical systems. Together, the expanded conditions reflect the IMF’s intent to embed long-term structural change while maintaining close oversight of Pakistan’s reform trajectory under the programme.
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