Islamabad, November 20,2025: Corruption recoveries amounting to Rs5.3 trillion over two years represent only a fraction of the true economic cost to Pakistan, the International Monetary Fund (IMF) warned on Wednesday in a damning governance assessment that describes corruption as “persistent and corrosive” across all tiers of the state.
The findings are part of the IMF’s Governance and Corruption Diagnostics Report, released after nearly a three-month delay. The Ministry of Finance made the report public to meet a key condition for the release of $1.2 billion in upcoming loan tranches.
NAB’s recoveries from January 2023 to December 2024, the report states, capture “only one element” of the overall economic losses caused by corruption, adding that Pakistan still lacks a reliable method to measure the true scale of graft.
According to the IMF, Pakistan could achieve a 5% to 6.5% GDP boost over five years if it implements a comprehensive governance reform agenda.
The IMF also underscored Pakistan’s chronic dependence on external financing, noting that the country has returned to the Fund 24 times since 1958 — under both military rulers and elected governments.
Successive power holders, the report suggests, have relied on IMF programmes while failing to enact durable structural reforms, allowing governance weaknesses and corruption to deepen over time.
The leaders and administrations that sought IMF assistance include:
Military rulers
- Gen Ayub Khan (1960s) — oversaw early IMF engagements
- Gen Zia-ul-Haq (1980s) — entered multiple IMF arrangements
- Gen Pervez Musharraf (1999–2008) — major programme in 2000–01 and another in 2008
Civilian governments
- Zulfikar Ali Bhutto (1970s) — turned to IMF amid balance-of-payments pressures
- Benazir Bhutto (1988–90, 1993–96) — IMF programmes during both terms
- Nawaz Sharif (1990–93, 1997–99, 2013–17) — signed programmes in 1997 and 2013
- Shaukat Aziz (2004–07) — undertook IMF engagement under Musharraf’s presidency
- PPP Government under Yousuf Raza Gilani / Asif Ali Zardari (2008–13) — 2008 Stand-By Arrangement
- Imran Khan (2018–22) — $6 billion Extended Fund Facility signed in 2019
- Shehbaz Sharif (2022–present) — $3bn SBA in 2023; $7bn EFF in 2024
The IMF notes that nearly every ruler — military or civilian — has depended on bailout programmes while avoiding long-term governance reforms.
The report draws a bleak picture of governance in Pakistan. It recalls that even Quaid-e-Azam Muhammad Ali Jinnah warned in 1947 that corruption was a “poison” that needed eradication — yet more than seven decades later it remains deeply embedded.
The IMF said citizens frequently face demands for bribes for routine services, while at higher levels, “economic and political elites shape policies to enrich themselves.”
One cited example is the 2019 sugar export decision under the PTI government, which the Fund says shows how influential groups can steer state policy for private gain.
Judiciary, SOEs, taxation and procurement under scrutiny
The report highlights entrenched weaknesses in:
- Budget transparency
- Public financial management
- Oversight of state-owned enterprises
- Public procurement
- The tax system, described as overly complex and opaque
These vulnerabilities, it warns, allow powerful entities — including those linked to the state — to influence markets and extract undue benefit.
The IMF states that corruption significantly undermines judicial performance, noting that public surveys consistently list the judiciary among the most corrupt state institutions, alongside police and procurement authorities.
The Fund’s account of the 2018–19 sugar crisis details how politically connected sugar mill owners allegedly manipulated prices, hoarded stocks, laundered profits, and influenced export decisions.
Despite an FIA probe naming prominent political figures, the IMF notes that meaningful accountability has not materialised.
The report also discusses the recent judicial reforms that changed the appointment process for Supreme Court judges. While intended to widen representation, stakeholders fear the changes may threaten judicial independence without adequate safeguards.
The IMF recommends codifying merit-based criteria, transparent evaluations, and integrity screening for judicial appointments.
The IMF expressed concern over the Special Investment Facilitation Council (SIFC), noting that while it wields substantial authority, its transparency and accountability mechanisms remain untested.
