IMF’s governance review could strengthen Pakistan’s anti-corruption efforts

The International Monetary Fund (IMF) is conducting thorough checks on Pakistan's judicial and regulatory systems under the current $7 billion Extended Fund Facility (EFF) program. As per reports, an IMF technical team recently began its seven-day assessment period of governance-related institutions to help Islamabad grapple with the longstanding issue of corruption.

In October 2024, Islamabad agreed with the IMF to strengthen its anti-corruption institutions and enhance growth inclusivity to foster a more equitable environment for businesses and investors.

Following this agreement, officials set July 2025 as the deadline to publish the Governance and Corruption Diagnostic Assessment (GCDA) report. As per the Ministry of Finance, officials are supposed to provide policy recommendations to tackle governance and corruption-related ‘vulnerabilities’.

According to reports, the IMF's mission is to collaborate with senior judiciary personnel, financial regulatory bodies, taxation officials, and electoral officers.

The assessment will study lapses surrounding six fundamental state operations, namely fiscal administration, central bank operation, financial market oversight, market regulatory bodies, law enforcement, and anti-money laundering institutions.

The IMF intends to find vulnerabilities in the aforementioned state operations by analysing data from the State Bank of Pakistan, the Finance Division, the Federal Board of Revenue, the Auditor General’s Office, the Securities and Exchange Commission of Pakistan, the Election Commission, and the Ministry of Law and Justice.

According to reports, the GCDA report will offer recommendations to fight corruption, allowing lawmakers in Islamabad to boost the effectiveness of its institutions. If the IMF is able to assist Islamabad in this manner, the resulting governance system might help Pakistan enjoy sustainable economic growth – since a lack of corruption and transparency helps foster a business-friendly environment.

Historically, the global economic watchdog’s main focus has been fixing international macroeconomic issues. However, the IMF occasionally provides guidance to countries to promote public sector transparency as per the finance ministry.

According to the IMF’s guidelines, economic stability depends on following the law, improving the public sector, and combating corruption. The IMF initiated its governance policy in 1997 and strengthened it in 2018 by introducing a new member-country engagement framework.

Apart from Pakistan, multiple countries have received GCDA reports through this framework, including Sri Lanka, Zambia, and Cameroon. Reports reveal that ten more reviews are ongoing, with a few still under consideration.

Once the review is complete in Pakistan, Islamabad will be required to reveal its results. Islamabad has also pledged to amend legislation to empower the National Accountability Bureau (NAB) only if the Supreme Court gives its approval. If passed, the amendments will allow NAB to tackle growing instances of money laundering and corruption.