Government Deferred NBP Privatization Call By IMF

News Today:  The International Monetary Fund (IMF), one of its conditions to remove the special status of seven State-Owned Enterprises (SOE) put the government under strain. This week, Pakistan decided to defer the privatization of the NBP. This move contradicts the commitment to the IMF. After close consideration, the government took the final move in a meeting of the CCoSOEs chaired by the Finance Minister. The committee approved the NBP as a Sovereign Welfare Fund, exempting it from the SOE Act 2003.

Retaining the EXIM Bank in the public sector as a state enterprise is also part of committee outcomes. The state-administered companies are exempt from the act, framed on the World Bank instructions for better financial controls and governance setup of publicly owned companies. In the previous month, the current government of Pakistan committed with the IMF to amend the Pakistan Sovereign Wealth Act to revoke the special status of the NBP and six other financial entities. The act involves the shares transfer process of these entities in the preliminary phase and selling them overseas to generate more wealth. These entities include OGDCL, PPL, NBP, PDFL, GHPL, and Neelum-Jhelum Hydropower Company. The fact is that legal obstacles were the reason for the postponement of NBP privatization. There are 16 government-controlled enterprises in the active privatization list, of which nine are under the direct control of the finance ministry. Out of these, three or four are in the queue for privatization. The situation portrays the government's inefficiency, raising questions about its competence.