If you have been following the news over the last few days, you might have seen headlines about a “scathing” new report from the International Monetary Fund (IMF) on corruption in Pakistan. It’s called the Governance and Corruption Diagnostic Report, and it is not your average financial update.
The IMF has essentially held up a mirror to Pakistan’s governance system, using data to quantify exactly how much “elite capture” and structural corruption are costing the common citizen.
I have scanned the 186-page assessment so you don’t have to. Here are the most critical figures and findings that explain where the money is going.
Here is some other ‘stuff’ happening in Pakistan.
1. The “PKR 5.3 Trillion” Reality Check
One of the most eye-opening figures in the report comes from data provided by Pakistan’s own National Accountability Bureau (NAB).
- The Figure: PKR 5.3 Trillion.
- What it represents: This is the amount of “corruption-related assets” recovered by NAB between January 2023 and December 2024 alone.
- The IMF’s Take: The IMF notes that while this number is massive, it is likely just the “tip of the iceberg.” The report suggests that because corruption is often systemic and underreported, the actual cost to the economy is far higher than what is being recovered.
2. The Cost of Doing Nothing: 6.5% of GDP
We often hear that corruption “stalls growth,” but the IMF has put a specific number on it.
- The Figure: 5% to 6.5% increase in GDP.
- What it means: If Pakistan actually implements the governance reforms suggested in this report (fixing the tax system, ending elite privileges, and digitizing procurement), the economy could grow by an additional 6.5% over the next five years.
- The Takeaway: We aren’t just losing money to theft; we are losing money to missed opportunities. The current system is actively preventing the economy from expanding.
3. The “PKR 40 Trillion” Risk
Perhaps the most alarming figure relates to how public funds are audited (or rather, not audited).
- The Figure: PKR 40 Trillion.
- What it represents: The IMF warned of major fiduciary risks regarding public funds estimated at nearly Rs 40 trillion at the federal level.
- The Cause: The report highlights a “weak internal audit mechanism.” Essentially, the systems designed to check where tax money is spent are either missing, powerless, or ignored. Without independent audits, this massive sum remains vulnerable to mismanagement.
The “Scan”: Where is the Corruption Hiding?
Beyond the numbers, the report identifies specific areas where governance has collapsed. Here is a quick scan of the “Red Zones”:
- Elite Capture: The report explicitly uses the term “State Capture.” It argues that public policies—subsidies, tax breaks, and SROs—are often designed to benefit a tiny circle of political and business elites rather than the general public.
- The FBR Crisis: The tax authority was singled out for operating with “considerable authority but limited oversight.” The complex tax system allows privileged sectors to pay less, while the common man pays more. The report called the tax-to-GDP ratio “low and falling” due to these loopholes.
- SIFC Transparency: The IMF specifically mentioned the Special Investment Facilitation Council (SIFC), urging that its operations, incentives, and concessions be made public to avoid creating new, opaque avenues for preferential treatment.
- Real Estate & Construction: These sectors were identified as major havens for money laundering and parking illicit wealth, largely due to a lack of regulation and oversight.
The Bottom Line
This report was a mandatory condition for the IMF’s latest loan tranche, which is why it has come to light now. It validates what many Pakistanis have felt for years: the economic crisis isn’t just about bad luck or global oil prices—it is about a system designed to serve the few at the expense of the many.
The Solution? The IMF has proposed a 15-point reform plan, focusing on digitizing government procurement (e-procurement), making asset declarations public, and removing the “sovereign guarantees” that protect state-owned enterprises from competition.
Disclaimer: This blog is based on the IMF Governance and Corruption Diagnostic Report (November 2025). All figures are cited directly from the report and related financial analyses.