Would you like to receive notifications on latest updates of the following headlines?

Pakistan Hits US$7billion Aid Deal with IMF

POSTED ON July 14, 2024 •   BUSINESS      BY Benedicta Bassey
Currency/ Photo credit: Reuter

In a bid to bolster it's faltering economy, the International Monetary Fund said it has reached a new US$7 billion loan deal with Pakistan.

Pakistan last year came to the brink of default as the economy shrivelled amid political chaos, catastrophic 2022 monsoon floods and decades of mismanagement - as well as the global economic downturn.

The nation was saved by last-minute loans from friendly countries, as well as support from the IMF, but its finances remain in dire straits with high inflation and staggering public debts.

The new three-year deal, which still needs approval by the IMF Executive Board, should enable Pakistan to "cement macroeconomic stability and create conditions for stronger, more inclusive and resilient growth", 

In a nation of over 240 million people and where most jobs are in the informal sector, only 5.2 million filed income tax returns in 2022.

During the 2024-25 fiscal year which started at the beginning of July, the government aims to raise nearly $46 billion in taxes, a 40 per cent increase from the previous year.

More unusual methods have seen the tax authority block 210,000 SIM cards of mobile users who have not filed tax returns in a bid to widen the revenue bracket.

Islamabad, a capital city of the Islamic Republic of Pakistan also aims to reduce its fiscal deficit by 1.5 per cent to 5.9 per cent in the coming year, heeding another key IMF demand.

But Pakistan's public debt remains huge at $242 billion and servicing it will still swallow up half of the government's income in 2024, according to the IMF.

Analysts have criticised Islamabad's measures as surface-level reforms - aimed at courting the IMF without addressing underlying problems.

"It is hard to not see old patterns in this new IMF deal," Ali Hasanain, associate professor of economics at the Lahore University of Management Sciences, told AFP.

"The IMF has issued a loan similar in size and conditions as the one agreed to five years ago, and five years before that".

"Will authorities seize the opportunity thus created to embark on fundamental reforms to how the country is run?" he asked. "You would be well-advised not to hold your breath".

The diet of strict economic measures introduced by his shaky coalition government is likely to undermine their popularity.

There have already been scattered protests over tax and bill hikes introduced in last month's budget - prepared with IMF oversight - and more demonstrations are scheduled for the coming weeks.

While around 40 per cent of the population already lives below the poverty line, the World Bank said in April it feared that 10 million additional Pakistanis would fall below this threshold.

Pakistan's last $3 billion loan from the IMF in 2023 proved a lifeline.
But it also came on the condition of unpopular austerity measures, including an end to subsidies cushioning consumer costs.

In recent months, the current account balance has recovered slightly and high inflation has started to subside.

The IMF anticipates two per cent growth this year, with inflation still expected to reach nearly 25 per cent year-on-year, before gradually coming down in 2025 and 2026

READ ALSO
FG Unveils Strategy to Enhance Aquaculture and Reduce Fish Imports in Nigeria
BY Abiodun Saheed Omodara July 16, 2025 0

The federal government is committed to reducing Nigeria's reliance on fish imports by enhancing loca...

READ ALSO
FG Partners CILSS to Enhance Food and Nutrition Safety in Nigeria
BY Abiodun Saheed Omodara July 16, 2025 0

The Federal Government is intensifying its initiatives to improve food and nutrition safety through...

READ ALSO
Dangote Aims to Cut Cooking Gas Prices, Plans Direct Sales to Consumers
BY Abiodun Saheed Omodara July 16, 2025 0

President of the Dangote Group, Alhaji Aliko Dangote,  has revealed intentions to lower th...

READ ALSO
US-Nigeria Trade Relations Face Significant Decline Amid New Tariffs
BY Abiodun Saheed Omodara July 14, 2025 0

The trade ties between the United States and Nigeria have encountered a notable decline, with offici...

READ ALSO
FG Commits to Clearing Legacy Debts for Gas Producers
BY Abiodun Saheed Omodara July 12, 2025 0

The Federal Government has announced its intention to clear all due payments to gas producers, inclu...

READ ALSO
Solid Minerals Minister Addresses Blackmail Against Mining Marshals, Vows Sector Reforms
BY Abiodun Saheed Omodara July 12, 2025 0

The Minister of Solid Minerals Development, Dr. Dele Alake, has stated that the Mining Marshals (MM)...

READ ALSO
Senate Calls for Reassessment of Nigeria's Power Sector Strategy
BY Abiodun Saheed Omodara July 11, 2025 0

The Senate has urged the Federal Government to reconsider its strategy regarding the power sector, a...

READ ALSO
Crypto Bridge Exchange Collapse Sparks Urgent Senate Inquiry into Ponzi Schemes
BY Abiodun Saheed Omodara July 10, 2025 0

The Senate initiated an extensive investigation into the surge of Ponzi schemes across the nation, o...

OUR CHANNELS:

151 Senior Police Officers Face Misconduct Hearings- NPF
BY Abiodun Saheed Omodara July 17, 2025 0

The Nigeria Police Force has revealed that 151 senior officers are currently undergoing proceedings...


CPC Loyalists Face Uncertain Future Amid Buhari's Death, Tinubu's Leadership
BY Abiodun Saheed Omodara July 18, 2025 0

The passing of former President Muhammadu Buhari has sparked renewed speculation regarding the polit...


Atiku's Move, 'No Threat to Our Dominance - APC
BY Abiodun Saheed Omodara July 17, 2025 0

Following the resignation of former Vice President Atiku Abubakar from the People’s Democratic...


LASIEC Awards Certificates to Elected Chairmen and Councillors
BY Abiodun Saheed Omodara July 17, 2025 0

The Lagos State Independent Electoral Commission (LASIEC) has awarded certificates of return to the...


FG Unveils Strategy to Enhance Aquaculture and Reduce Fish Imports in Nigeria
BY Abiodun Saheed Omodara July 17, 2025 0

The federal government is committed to reducing Nigeria's reliance on fish imports by enhancing loca...


Obasanjo Advocates for Effective Operators Over a Perfect Constitution in Nigeria
BY Abiodun Saheed Omodara July 17, 2025 0

Former President Olusegun Obasanjo says Nigeria needs the right operators of the constitution, not a...


FG Partners CILSS to Enhance Food and Nutrition Safety in Nigeria
BY Abiodun Saheed Omodara July 17, 2025 0

The Federal Government is intensifying its initiatives to improve food and nutrition safety through...


Awujale's Burial Liberation for Yoruba Traditional Institution - Oluwo of Iwo
BY Abiodun Saheed Omodara July 16, 2025 0

The Oluwo of Iwo, Oba Abdulrosheed Akanbi, has referred to the burial of the late Awujale of Ijebula...


Dangote Aims to Cut Cooking Gas Prices, Plans Direct Sales to Consumers
BY Abiodun Saheed Omodara July 17, 2025 0

President of the Dangote Group, Alhaji Aliko Dangote,  has revealed intentions to lower th...


Meta Cracks Down on Fake Profiles: Over 10 Million Accounts Removed
BY Abiodun Saheed Omodara July 17, 2025 0

Meta, the parent organization of Facebook, has intensified its initiatives to enhance the platform's...


More Articles

Load more...

Menu