ISLAMABAD: Pakistan’s external debt and liabilities have soared to $130.179 billion by May 2024, up from $124.296 billion by end June 2023, showing an increase of around $5.883 billion in the first 11 months of the fiscal year 2023-24, revealed While briefing the Senate Standing Committee on Economic Affairs which met with Saifullah Abro in the chair, Secretary Ministry of Economic Affairs Dr Kazim Niaz revealed that external debt servicing is estimated at $20.833 billion for 2024-25 against the revised $12.399 billion in 2023-24.
These include $3.705 billion as servicing of foreign debt (SFD), $17.027 billion as foreign loan repayment (FLR) and $100 million repayment of short-term foreign credit (RSTFC).
The total external public debt stood at $86.287 billion by end May 2024 including$8.665 billion from the International Monetary Fund (IMF). Further, the external debt and liabilities also included loans of private sector. Total external debt stands at $118.361 billion while total liabilities at $11.818 billion.
Public debt recorded at Rs67.525trn at Mar-end
The committee also expressed concerns over slow disbursement and recommended for expediting the utilisation.
Responding to a question, Secretary Niaz said that China gives three types of loans to Pakistan, which are concessionary loans on average at the rate of around three percent. He further said that the United States does not provide bilateral loans for budgetary support to Pakistan; however, it gives assistance for projects implementation.
The financial allocations were also discussed, with a total budgetary grant of Rs30,597.91 million earmarked for the ERE and operational expenditures for the fiscal year 2024-25. Furthermore, Rs6,058.065.10 million was allocated for external debt servicing during the same period.
The briefing emphasised the significance of foreign economic assistance (FEA), noting the utilisation of highly concessional loans with fixed interest rates below 3.05 per cent and tenure ranging from 20 to 40 years.
Additionally, concessional loans with fixed interest rates above 3.5 per cent and variable rates (reference rate plus spread) were highlighted for their role in project financing and budgetary support. Senator Taj Haider underscored the importance of revenue-based budgetary support over reliance on external loans.
Senator Kamil Ali Agha asked about the total investment of CPEC projects in a country. To this, the Secretary, EAD informed the Committee that Ministry of Planning, Development and Special Initiatives deals with the project and requisite information will be provided before the next Committee meeting.
Discussion also centred on development partners, including multilateral institutions such as the World Bank, ADB, IsDB, AIIB and EU, as well as bilateral partners such as China, Japan, USA, UK, and UN agencies like UNDP, UNICEF, WFP and UNFPA.
The Committee was further briefed on the ministry’s project portfolio, comprising 298 ongoing projects, out of which 146 are multilateral and 152 bilateral. Disbursement figures were reviewed, highlighting US $6.683 million as the peak disbursement in FY 2022-23, with a projected US $5.325 million for FY 2023-24.
Debt management strategies were also outlined involving key government agencies including the Finance Division, Economic Affairs Division, and State Bank of Pakistan. The roles of these entities encompass negotiating and securing foreign economic assistance, managing external debt and liabilities, debt servicing, and data dissemination to stakeholders.
The additional functions of the ministry such as the NGO policy were detailed highlighting the signing of 975 MoUs from 2013 to 2022. The information on foreign training opportunities accessed by government officials, totalling 225 from countries like China, Japan, Korea, and Singapore, was also provided.
The Pakistan Technical Assistance Program was highlighted for its provision of long-term educational opportunities. The session concluded with remarks from the Chairman of the Committee stating that if a loan is taken for the project or a proposal is finalized by EAD, it must be ensured that the amount is utilised properly by the department. He emphasized that projects must be completed on time.
The Committee also decided to hold upcoming meeting on 298 ongoing projects falling under multilateral and bilateral partners.
Established initially as Development Board in 1948, the Ministry assumed independent ministerial status in 2019. Its primary responsibilities encompass federal government borrowing, program assessment and negotiation of foreign economic assistance, management of external debt, redistribution of foreign loans to provinces and autonomous bodies, economic collaboration, and credit facilitation to allied nations.
Additionally, it oversees the implementation of NGO policy, Foreign Training Courses for Civil Servants (FTC) under Technical Assistance (TA) arrangements with bilateral and multilateral partners, and the Pakistan Technical Assistance Program. Regarding human resources, the ministry reported 54 vacant gazette positions out of 170 across BPS-16 to BPS-22.
Copyright Business Recorder, 2024
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