Afzal picked as state minister amid mounting financial troubles

ISLAMABAD –  The government has decided to appoint Rana Afzal Khan as minister of state to run the economic affairs of the country, which is heading towards a serious balance of payment issue.

Afzal, who is currently working as Federal Parliamentary Secretary for Finance, would take the oath of minister of state next week, probably on Tuesday or Wednesday.

Prime Minister Shahid Khaqan Abbasi is holding the portfolio of federal finance minister himself for last one month after granting indefinite leave to Ishaq Dar on Nov 22.

An accountability court had declared Dar a proclaimed offended for his continuous non-appearance in a corruption reference against him. According to his lawyer, the minister is receiving treatment in London for a heart condition.

The PML-N government is already running another key ministry, of information and broadcasting, through a state minister. The federal minister’s slot has been kept vacant since the resignation of Pervaiz Rasheed, who had to quit over Dawn Leaks issue.

Like all other key government decisions, Prime Minister Abbasi took the approval of appointing Afzal as minister of state from former PM Nawaz Sharif in Lahore other day, according to sources.

They further informed The Nation that Afzal would handle day-to-day matters of the finance ministry, while policy making decisions will be taken by Abbasi himself, who would keep the federal portfolio of finance.

The government has appointed the state minister for smooth functioning of the ministry affairs. It however would have to also appoint a new finance secretary in next couple of weeks since incumbent secretary Shahid Mahmood is retiring in the mid of January.

Special Assistant to Prime Minister on Revenue Haroon Akhtar Khan is already looking after the tax related matters, while Special Assistant to PM on Economic Affairs Miftah Ismail is tasked to look into special economic issues assigned to him.

State Minister Rana Afzal would be given the task to prepare the next budget for the year 2018-19. The government is likely to present its 6th budget of current tenure in May next year.

The need for appointing at least a fulltime state minister for finance was badly felt due to worsening balance of payment situation.

The state minister would face several other economic challenges, which include depleting foreign exchange reserves, and widening of current account deficit due to increase in imports, continuous decline in exports and foreign remittances.

Pakistan faces an external financing gap of around $12 billion in the current fiscal year. The country’s gross external financing requirements are around $20 billion, including a projected $14 billion current account deficit and $5.9 billion foreign debt repayment in the ongoing financial year.

However, the government has around $9 billion in reserves, which leaves net financing gap of about $11-12 billion.

The country’s reserves had tumbled by $5 billion in one year. However, at the end of November 2017, the government successfully generated $2.5 billion by issuing Euro and Sukuk bonds in international market.

Gross foreign exchange reserves held by the State Bank of Pakistan went up by to $14.33 billion, worth three months of import cover. The country’s overall foreign exchange reserves are $20.4 billion.


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