ISLAMABAD – The International Monetary Fund (IMF) has directed Pakistan to stop using federal funds for projects that fall under provincial control, in line with the 18th Constitutional Amendment.
Sources say the IMF has asked the federal government to remove 168 ongoing provincial development projects from its budget. These projects, which have seen slow progress, are estimated to cost PKR 1,100 billion in total. So far, PKR 300 billion has already been spent, but the IMF has now blocked the use of the remaining PKR 800 billion from federal funds.
As a result, these projects will now need to be completed using provincial development budgets, shifting financial responsibility to the respective provinces.
This demand comes as Pakistan’s Finance Minister, Muhammad Aurangzeb, continues discussions with global financial institutions. While meeting IMF Managing Director Kristalina Georgieva in Washington D.C., he reaffirmed Pakistan’s commitment to economic reforms and thanked the IMF for finalizing the Staff-Level Agreement under the Extended Fund Facility (EFF) and new Resilience and Sustainability Facility (RSF).
Aurangzeb also met World Bank President Ajay Banga to discuss the Country Partnership Framework (CPF), and he briefed U.S. Treasury officials on Pakistan’s progress in areas like taxation, energy, privatization, and debt management.