The International Monetary Fund has asked Pakistan to implement strict conditions for making its proposed Sovereign Wealth Fund (SWF) fully operational, including key legal amendments through Parliament.
According to officials, the proposed framework significantly limits the financial autonomy of the SWF. The fund will be barred from borrowing, offering guarantees, or lending to public and private entities. It will also not be allowed to participate in public-private partnership (PPP) projects or acquire financial assets independently.
The IMF has directed that these conditions be formalized as part of a structural benchmark following the approval of the federal budget for fiscal year 2026–27, underlining the importance of the reform within Pakistan’s ongoing IMF program.
Officials said the government has already submitted amendments related to state-owned enterprises (SOEs) to Parliament to align with the existing legal framework, while additional legislation for other entities is expected to be finalized by August 2026.
Under the agreed structure, all revenues generated by the SWF will be transferred directly to the federal government instead of being retained by the fund. Moreover, any investments made by the SWF will be financed through allocations from the Public Finance Management Act 2019, ensuring tighter fiscal control and oversight.
The fund is expected to function as a state-owned entity with the objective of attracting foreign investment and supporting strategic commercial ventures, while delivering returns aligned with its mandate.
Meanwhile, the government is continuing broader reforms in the state-owned sector. Reviews are underway for major entities including the National Highway Authority, Pakistan Railways, and Pakistan State Oil, alongside plans to privatize several public sector organizations.
Officials emphasized that the new framework will enforce transparent and competitive processes for investments and asset sales, along with strict disclosure requirements such as beneficial ownership details, in line with international best practices.
