Pakistan Reader# 461, 10 December 2022
On 10 December, the International Monetary Fund (IMF) said that Pakistan would forgo its December end deadline to close all bank accounts which are maintained by public sector enterprises and defense ministry in the commercial banks and transfer the money to the central bank of the country. The total balance of these accounts amounted to nearly PKR 3 trillion. This comes as the IMF’s technical team which visited Islamabad in October had concluded a draft report on the impending status of the Treasury Single Account (TSA) and Managing Fiscal Risks by Pakistan which was separate from the staff-level visit for the ninth review of the programme which has seen a consistent delay for the last two months.
The technical mission’s findings revealed that the TSA would nearly another year to be fully implemented, with the public funds being fully accountable. The successful implementation of the first stage in 2021 was not resounded in the second and final stage, with findings showing that the reform has slowed “significantly.” The IMF said that there is a lack of clarity in the amount of money that was “out of sight” of the public sector, but said that the potential amount of the balances is estimated at around PKR 1.2 trillion to nearly PKR three trillion.
Out of the 6,610 accounts identified, only 4,581 were closed with their total balance of PKR 5 billion being transferred to the Federal Consolidated Fund, with the other 1,550 accounts being used for employee contributions and donor-facilitated projects. The lessened rate of borrowing will be equivalent to the total amount of these resources based on October 2022’s interest rates, and the transfer of the PKR 3 trillion would create fiscal space and save expenses for the government between PKR 159 billion to PKR 385 billion as per the findings. The TSA reform ensured transparency and better management and availability of cash by the government, but the IMF’s findings said that “substantial work” still needs to be worked out before the second stage is piloted, let alone be “fully operational.” (Shahbaz Rana, “TSA deadline will be missed: IMF,” The Express Tribune, 10 December 2022)