Transparency and accountability are the foundation of any credible public financial system. They determine not only whether government resources are used wisely, but also whether citizens trust their state to act in the public interest.
In countries where public money is treated as a public trust, economic performance tends to improve, corruption decreases, and institutions operate with greater legitimacy. For Pakistan, a country grappling with fiscal pressures, growing public demands and global economic control, transparency and accountability in public financial mechanisms (PFMs) are not abstract ideals; they are essential tools for national stability.
Public finance determines how a nation raises funds, allocates them and transforms them into services. Pakistan’s fiscal footprint is enormous: the federal budget exceeded 14.5 trillion rupees in the 2023-2024 financial year, and provincial budgets collectively exceeded 10 trillion rupees. However, the results often do not match the volume of spending.
Estimates suggest that Pakistan loses 8-12% of its public spending every year due to inefficiencies, leakages and weak controls, while development budgets regularly experience underspending of 20-40%.
These figures reflect a system in which decisions are obscured by opacity and where the repercussions of poor financial management are rare. Without transparency, citizens cannot see; without accountability, institutions need not act.
Recognizing these systemic gaps, Pakistan has become a focus area for global partners supporting PFM reforms. The European Union’s Public Financial Management Support Program (PFM-SPP) is one of the most influential initiatives, modernizing budget structures, improving data accuracy and improving budget transparency in Sindh and Balochistan.
EU support has helped provincial governments adopt IT-enabled budgeting, transparent credit structures and more accessible financial reporting to citizens. Such reforms provide a basis for long-term accountability.
The World Bank has also invested heavily in strengthening Pakistan’s financial governance. The Public Financial Management and Accountability in Support of Service Delivery project improves internal controls, audit capabilities and reporting systems.
Meanwhile, the Punjab Digital Resource Improvement and Efficiency (PRIDE) Program worth over $304 million focuses on digitalizing tax systems, strengthening transparency in public procurement and reducing fiscal risks. Punjab’s transition to digital payment systems and e-procurement has already begun to reduce manual interventions that historically created opportunities for leakages.
Other international partners have played an equally important role. The Asian Development Bank (ADB) has supported Pakistan’s fiscal reforms for over a decade, particularly in public sector management, public procurement modernization and revenue mobilization.
ADB technical support helped develop medium-term budgetary frameworks and strengthen budgetary discipline at the federal and provincial levels. As Pakistan continues to face tight fiscal space, ADB’s reform-based loans linked to governance reforms have become crucial.
The International Monetary Fund (IMF), while primarily known for macroeconomic stabilization, is increasingly emphasizing transparency and accountability in fiscal governance as key conditions for its support. Recent IMF programs require Pakistan to improve public disclosure of debts, state-owned enterprise losses, public procurement contracts and fiscal risks. The IMF’s efforts to better communicate “circular debt”, pension commitments and guarantee portfolios require reforms that Pakistan can no longer delay.
The United States Agency for International Development (USAID) has long invested in financial and institutional strengthening, including through revenue administration reforms and support to provincial financial departments. USAID helped digitize taxpayer services, improve audit training, and strengthen provincial budget systems, particularly in KP and Sindh, thereby promoting more efficient public spending.
The Foreign, Commonwealth & Development Office (FCDO), formerly DfID (UK), has also played a leading role in public finance reforms in Pakistan. Its governance programs have supported evidence-based budgeting, tracking public expenditure, and strengthening accountability institutions such as public accounts committees. The impact of the FCDO is visible in programs that have improved budget transparency and the quality of financial reporting.
German GIZ focused on capacity building, strengthening auditing, tax administration and anti-corruption measures. Initiatives supported by GIZ have helped train financial managers, standardize audit methodologies and develop budget reporting tools aligned with global best practices. Japan JICA has contributed to the modernization of the system, including training on financial compliance and supporting digital transformation in ministries.
Collectively, these reforms have already begun to reshape the PFM landscape in Pakistan. But the real test is whether this dynamic will be institutionalized. With debt servicing consuming nearly 57% of federal revenues and development needs increasing, Pakistan cannot afford structural inefficiencies; every rupee saved through transparency becomes a rupee available for public welfare.
Digitalized procurement alone can save up to 20% in procurement costs, a margin that could translate to Rs 400 billion annually, more than the federal education development budget.
Equally important is the credibility that Pakistan gains internationally when PFM systems are robust. Investors and development partners prioritize transparency, quality audits, competitive public procurement and rules-based budgeting.
Countries with strong PFM frameworks obtain financing on better terms, attract private investment, and maintain more stable macroeconomic conditions. In this sense, transparency is both a national reform and a global economic strategy.
To fully benefit from ongoing reforms, Pakistan must move from simple compliance with technical requirements to cultural change. Budgets must be published in formats understandable to citizens. Real-time dashboards showing project spending and procurement contracts should be publicly available.
Audit reports must be made available promptly and acted upon. Procurement must be fully digitalized and competitive. Performance-based budgeting must replace historical allocation models. None of this requires new laws; this requires firm application and political will.
Accountability must also be strengthened. Audit findings should be investigated and not tossed aside.
Performance gaps should trigger corrective action. Financial misconduct must carry consequences, regardless of political affiliation. Oversight bodies, including public accounts committees, finance departments and offices of the auditor general, must be empowered. Whistleblower protection must protect those who report corruption.
Ultimately, transparency and accountability extend beyond government. The media must report financial matters in a factual manner. Civil society must follow budgets. Academia needs to analyze budget trends. Professional associations must advocate for transparent taxation and public procurement. Citizens must demand to know how their money is spent.
If Pakistan succeeds in integrating transparency and accountability into public financial mechanisms, with the support of the EU, World Bank, ADB, IMF, USAID, FCDO, GIZ, JICA and others, the transformation will be profound: reduced corruption, efficient spending, improved service delivery and renewed public trust.
A transparent system allows the public to see; an accountable system ensures that institutions act. Pakistan’s financial future depends on strengthening it, not episodically, but consistently and with unwavering commitment.
The writer is a public policy expert and heads the World Economic Forum’s Country Partner Institute in Pakistan. He posts @amirjahangir and can be contacted at: [email protected]
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the editorial policies of PK Press Club.tv.
Originally published in The News
