ISLAMABAD - Federal Finance Minister Muhammad Aurangzeb emphasized that Pakistan’s external financing gap has been filled for now, with plans to approach the international capital market by issuing Panda Bonds later this fiscal year. The Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwala, convened Wednesday to discuss a range of critical financial matters, including the issuance of domiciles of employees in ZBTL, the new IMF program, and upcoming plans for international financing. Federal Finance Minister Muhammad Aurangzeb also attended the session, providing comprehensive updates on key economic issues.
President of the Agricultural Development Bank, Tahir Yaqoob, also briefed the committee, outlining the bank’s efforts to ensure merit-based appointments. He revealed that 1,900 appointments have been made over the last decade, with no job quotas imposed. He reaffirmed the bank’s commitment to agricultural development across the country.
Senator Mohsin Aziz raised concerns over the relatively lower loan disbursement in Khyber Pakhtunkhwa. The finance minister assured that the government is working towards a more inclusive approach to agricultural credit. He also emphasized that the allocation and quota system should be reconsidered, with a proposal to abolish it, ensuring a more equitable distribution of funds across regions.
The committee directed to have a detailed briefing on agricultural financing at the next committee session.
Furthermore, the committee received a briefing on terms and conditions of IMF loan and commercial loans obtained. It was briefed on Pakistan’s ongoing discussions with the International Monetary Fund (IMF) regarding the new program. Finance Minister Muhammad Aurangzeb confirmed that the new IMF agreement is extensive and comes with additional conditions. He also noted that talks with the IMF on climate financing have been progressing since October, with climate-related projects to be identified for funding.
Finance Secretary Imdadullah Bosal added that the IMF mission is expected to visit Pakistan in March, during which climate financing will be a key topic of negotiation. The finance minister assured the committee that any IMF conditions relating to fiscal policy, including the National Finance Commission (NFC) award, will be fully transparent. He also clarified that the IMF’s conditions do not involve a review of the NFC award, despite some concerns raised by committee members regarding the allocation of financial resources to Khyber Pakhtunkhwa and the merged districts in FATA.
The meeting also addressed the finance minister’s commitment to greater financial transparency. Minister Aurangzeb rejected the notion that Pakistan was relying on expensive foreign commercial loans, affirming that any future commercial loans would only be taken when necessary and on terms favorable to Pakistan.
The finance minister also highlighted the ongoing improvement in Pakistan’s industrial indicators, citing a 49% year-on-year increase in vehicle sales as a sign of economic recovery. Discussions with international commercial banks have been underway since April, but no decisions on new loans have been finalized as yet.
Chairman Saleem Mandviwala recommended that work on a new NFC award begin immediately, noting that the current implementation of the seventh NFC award provides around 60% of the federal financial resources to the provinces, with the federal government’s share limited to 40%. He proposed that a new consultation process between the federation and the provinces should be initiated to review the distribution of resources under the next NFC award. The meeting was attended by Senator Sherry Rehman, Mohsin Aziz, Syed Shibli Faraz, Abdul Shakoor, and Senator Fesal Vawda.
