ISLAMABAD: Pakistan’s overall disbursements from all the international creditors have gone up to $2.5 billion so far, but dollar inflows in shape of project loans are showing a slight negative growth mainly because of slowdown in CPEC related projects.Top official sources confirmed to The News on Thursday that China had become the largest bilateral donor in the aftermath of much-trumpeted China Pakistan Economic Corridor (CPEC) signed between the two countries during the tenure of PML (N) led regime in 2014 but now the momentum had lost its pace mainly because the projects had been completed or were approaching the completion stage. “There has been no new loan signed, so disbursement of loans from CPEC projects has reduced significantly” said the top sources.The total committed un-disbursed loan amount stood at $14 billion but it could be materialized only in a staggered shape over next three to four years.There has been a misunderstanding that the total un-disbursed committed loans could be obtained just in one year that is completely impossible. However, the official conceded that the governance structure weakened both at federal and provincial levels so the appetite of absorbing loans could not be increased beyond certain limits. The gradual approach of bringing improvement in governance structure can help to achieve the desired results, he added.The disbursement of project loans stood at around $4 billion on per annum basis and this appetite cannot be increased overnight in one go. In the aftermath of 18th Amendment, the provinces role increased for mainly donor funded projects and their capacity constraints caused havoc with the effective disbursements plans of donor funded projects, said the official.“The disbursements from all creditors stood at $2.5 billion in July-Oct period of the current fiscal year 2019-20 against $1.5 billion in the same period of the last financial year” said the official sources.“The disbursement from bilateral sources was negative by 2 percent and stood at $548 million in first three months of the current fiscal which primarily reflects decreased dollar inflows from China under CPEC” said the official.There was a major increase in commercial borrowings as Pakistan fetched $514 million during the first quarter of the current fiscal year as against $200.53 million in the corresponding period of the last fiscal year, registering an increase of more than 150 percent.The official data showed that commercial borrowings stood at $321.5 million in the first two months of July and August 2019. This indicated that the government continued to muster foreign inflows through commercial borrowings in September 2019.The commercial borrowing is considered an easy tool to manage foreign inflows, as the finance ministry used to get dollar inflows from selected few banks without fulfilling the requirement of Public Procurement Regulatory Authority.The government envisaged disbursements of foreign loans and grants to the tune of $12.9 billion in the current fiscal year compared to $10.89 billion a year earlier. “There is still a need to streamline execution of projects funded by the World Bank,” a well-placed source said.The secretary Economic Affairs Division had put a lot of efforts to accelerate the disbursements of foreign inflows by fulfilling the requirements of donors. Sources said Islamabad planned to raise $3 billion through Eurobond and Sukuk during the current fiscal year. It was also planned by the government to launch international bonds next month in order to shore up current reserves of foreign exchange. The government has already appointed transaction advisors and the process of due diligence is underway at the moment.
from The News International - National https://ift.tt/3489Lly
0 comments:
Post a Comment