Pakistan developing National Private Equity Framework

Pakistan is developing a National Private Equity Framework to mobilise institutional capital into businesses and projects as the government seeks to increase the role of private investment in the country’s next phase of economic growth, Finance Minister Muhammad Aurangzeb said. The finance minister informed, while addressing the “Fireside Chat: Pakistan: External Shocks Remain Manageable” at the J. P. Morgan Emerging and Frontier Markets Opportunities Conference in London, read an official statement on Friday. Leading global institutional investors and top money managers showed strong interest in Pakistan at the conference, with 55 global investment funds meeting with the Pakistani delegation through one-on-one sessions and a full investor session. The strong investor interest was accommodated within a day, with discussions focused on Pakistan’s future economic direction, investment opportunities and the sustainability of its ongoing economic transformation. Amin Khowaja, Chief Executive Officer and Country Head of J. P. Morgan Pakistan, also attended the meetings. Setting out the government’s economic direction, the finance minister outlined six key priorities: bringing permanence to macroeconomic stability and strengthening fiscal and external shock-absorbing capacity; moving from stabilisation to sustainable and responsible growth driven by productivity, investment and exports; staying the course on structural reforms; moving from aid to trade and investment; expanding access to finance to enable people and communities; and positioning Pakistan for the new economy, including digitalisation, blockchain and Web 3. 0. Aurangzeb said that over the last three years, Pakistan’s overriding task had been to restore macroeconomic stability and rebuild credibility. On the occasion, the Governor of the State Bank of Pakistan, Jameel Ahmad, highlighted the strengthening of Pakistan’s external position, noting the improvement in foreign exchange reserves, the quality of reserve accumulation, rising remittance flows and strengthening external-sector fundamentals. He also highlighted the growing contribution of Roshan Digital Account flows, external sector reforms and the strengthening of financial sector fundamentals. He noted the progress made in containing inflation over the years, adding that these developments had contributed to greater macroeconomic stability and strengthened the foundations for sustainable growth and investment. The finance minister said the objective was now to ensure that stability became durable and provided the foundation for a different growth model, one increasingly driven by investment, productivity, exports and private sector activity rather than short-term, consumption-led expansion. Highlighting improvements in Pakistan’s sovereign debt position, the finance minister said the government had pursued active liability management, extended domestic debt maturities and reduced refinancing risks. He said these measures, together with fiscal consolidation, were strengthening the overall sovereign balance sheet and supporting greater confidence in Pakistan’s economic outlook. Aurangzeb said Pakistan had also re-established access to international capital markets through diversified instruments and investor pools. The finance minister highlighted the significant potential for deeper capital formation in Pakistan, saying the government was working to strengthen equity and corporate debt markets, broaden investor participation, increase IPO activity and improve market infrastructure. He said greater foreign capital participation, along with the development of Islamic finance and Sukuk markets, could further expand the channels available for long-term investment. He also outlined reforms aimed at creating greater space for private capital and reducing the State’s role in commercial activity. The finance minister said access to finance was also being expanded across SMEs, agriculture and housing so that macroeconomic stability could translate into greater credit, investment and productive activity. He stressed that public balance sheets alone could not finance Pakistan’s next phase of growth and that private capital would increasingly have to play a larger role. On external economic engagement, the finance minister said Pakistan was moving decisively from traditional dependence on aid towards stronger trade and investment flows. While acknowledging the importance of bilateral partnerships, he emphasised the need to deepen both goods and services trade and attract greater long-term investment through mutually beneficial economic relationships. The finance minister said Pakistan’s investment case was no longer simply about overcoming immediate economic pressures, but about the reform and re-rating potential that remained ahead. He reaffirmed the Government’s commitment to fiscal discipline, external sustainability and reform momentum, while creating greater space for domestic and international private capital.

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