KP Govt Withdraws Commitment of Provincial Surplus Risking IMF Deal

The move could potentially weaken Pakistan’s case for the resumption of the International Monetary Fund (IMF) program. Khyber Pakhtunkhwa’s Finance Minister Taimur Khan Jhagra says federal government had committed to resolving major financial issues of KP.

Jhagra: “In return, I obtained the authorization of the Chief Minister, for the province of Khyber Pakhtunkhwa to sign on to the memorandum of understanding (MoU) and did so within 24 hours”. He adds that in the intervening period of almost 2 months, he has been unable to get time to meet either the Minister or the Secretary.

The provincial minister also listed some of the key issues that remain pending. The issues listed include:

  1. Issue of budget allocations for ex-FATA.
  2. Commitment to monthly net hydel profit (NHP) transfers based on the MoU signed between the federal government and Khyber Pakhtunkhwa in 2016.
  3. Revival of National Finance Commission (NFC).
  4. A commitment from the federal government to immediately engage and resolve other financial issues with Khyber Pakhtunkhwa.
He says that the recent flooding has caused destruction in the province and the damage from the floods is greater than that of the super-floods of 2010.
The center had agreed in the Memorandum of Economic and Fiscal Policies inked with IMF to present a MoU duly signed by provinces for the provision of cash surplus by them. Khyber Pakhtunkhwa government signed the MoU regarding fiscal responsibility after the federal government agreed to address its issues.