Diversifying portfolio in Pakistan: Minister vows support to ITFC

ISLAMABAD: Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb assured his government’s full support to Islamic Trade Finance Corporation (ITFC) for diversifying its portfolio in Pakistan.

According to a press release issued by the finance ministry here on Thursday, the minister was talking to a delegation of ITFC led by its CEO Engineer, Hani Salem Sonbol in Washington.

The minister appreciated the support from ITFC for commodity financing of USD 3 billion through a Framework Agreement over the next three years and immediate provision of USD 269 million through a mix of direct financing and syndication.

“The ITFC expressed its resolve to diversify its portfolio in Pakistan. Finance minister assured full support in this regard,” the statement added.

Meanwhile, the minister attended a roundtable with institutional investors organized by Jefferies International. He briefed the investors on the positive economic indicators of Pakistan, driven by the successful Stand-By Arrangement (SBA).

He highlighted reforms aimed at increasing the tax-to-GDP ratio, reducing energy sector losses, improving the governance and management of State-Owned Enterprises (SOEs), accelerating privatization, and containing expenditures by right-sizing the federal government.

He also attended the meeting of the Managing Director of the IMF with Finance Ministers, Central Bank Governors, and Heads of Regional Financial Institutions of the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region.

During his intervention emphasized the need for the International Monetary Fund (IMF) to embed social protection measures in its lending frameworks.

He urged the Fund to focus on enhancing climate resilience financing and to continue expanding debt relief and concessional financing mechanisms to support vulnerable nations.

He welcomed the incorporation of emerging challenges such as climate-related risks, domestic public debt, and complex debt restructuring scenarios in the review of the Low-Income Countries Debt Sustainability Framework (LIC-DSF).

The minister attended roundtable with Institutional Investors organized by Jefferies International. He briefed the investors about positive economic indicators of the country on the back of the successful SBA and highlighted reforms to increase tax-to-GDP ratio, reduce losses in the energy sector, improve the governance and management of SOEs, accelerate the privatization and contain expenditures by right-sizing the federal government.

The finance minister also met with Amy Holman, Assistant Secretary of State for Economic and Business Affairs, US Department of State. He acknowledged the importance of Pak-US economic partnership in Pakistan’s socio-economic development and thanked the US for its support. He highlighted the investment potential in agriculture, IT, energy, mines & minerals sectors and invited US enterprises to invest in these areas.

Meanwhile, in the meeting with the team of Deutsche Bank, the finance minister gave a detailed briefing on the state of Pakistan’s economy and expressed satisfaction that country’s credit ratings had recently been upgraded by Fitch and Moody’s.

He informed that a Sustainable Finance Framework (SFF) was being developed which will enable the country to access the green international capital market. The finance minister gave a talk on Pakistan’s economic outlook at the Wilson Centre which was moderated by Michael Kugelman, Director of the Wilson Centre’s South Asia Institute.

He highlighted the performance of the economy over the last one year and talked about major reforms including increase in the tax-to-GDP ratio through broadening the tax base, expenditure control through subsidy rationalization, reforms in the energy sector, SoE governance reforms, providing a level playing field to businesses and building climate resilience.