Over $18bn foreign loans obtained by current govt, Dar informs National Assembly

He said the government wanted to enhance its debt repayment capacity thro­ugh resource mobilisation, by incre­asing the tax-to-GDP ratio from 11 per cent to 13pc by 2017-18 and repaying expensive domestic debt with concessional external loans. He said the government was trying to boost economic acti­vities, increase foreign excha­nge reserves, restore international investors’ confidence and achieve fiscal discipline.
“Furthermore, privatisation of various public sector enterprises is under process — 90pc receipts of privatisation will be used for debt retire­ment,” Mr Dar said.
He said the fiscal deficit was expected to drop to 4pc of Gross Domestic Product in 2016-17 from 5.37pc recorded in 2014-15.
The enhanced fiscal space will reduce the government’s borrowing and augment its repayment capacity.
In reply to another question, he said the government had received $18bn foreign loans by Sept 30. These included $3.5bn bonds and $4.77bn received from the International Monetary Fund. He said the budget estimates for repayments were prepared on the basis of the schedules agreed under the loan agreements.

The IMF loan is meant exclusively to build foreign exchange reserves and has not been used for budgetary support needs. The amo­unt is shown as part of
the reserves (currently $19.92bn) with the State Bank being the custodian.

Replying to a supplementary question asked by the PPP’s Nafisa Shah, Parlia­mentary Secretary for Fina­nce Rana Muhammad Afzal Khan said the government had decided in principle to privatise public sector entities — both running in profit and making losses.
“Privatisation was part of our election campaign and people have voted us into power. Hence questioning the government over its privatisation policy doesn’t make sense.” Rana Afzal said the Pakis­tan Steel Mills had been a profitable concern but today everyone is aware of its state of affairs. Other PSEs would also be sold, he added.
Published in Dawn, November 28th, 2015