Pakistan greenlights $200m ADB loan despite questions over digitalisation project

Dawn reported that the federal government cleared a $200 million (Rs57bn) digitalisation loan from the Asian Development Bank on Friday, even though the Planning Commission raised serious doubts about the project. The Central Development Working Party gave conditional approval to the Transforming and Digitalising Revenue Administration project, which targets a tax-to-GDP ratio of 13.5pc by 2029 from 11.1pc currently. Planning Minister Ahsan Iqbal chaired the meeting, and the state-owned think tank PIDE must now thoroughly review the project's business model.

Pakistan has already drawn over $4.7bn from foreign lenders for revenue collection reforms, yet the tax-to-GDP ratio remains close to 11pc. The Planning Commission wanted the FBR to link the project to its Rs350bn Transformation Plan and provide measurable results-based indicators, a gap analysis and a feasibility study. External experts from two national universities also flagged the absence of a comprehensive data security framework and asked for clarity on the proposed AI model.

The CDWP also recommended the PakSat-2 Satellite System, costing Rs37.2bn, to the Executive Committee of the National Economic Council for approval. Five other projects worth Rs21.59bn were cleared at the same meeting, including an olive cultivation expansion and a Rs5.758bn revamp of the Pakistan Sports Complex in Islamabad. The PakSat-2 system is meant to replace PakSat-IR, which reaches the end of its 15-year operational life later this year.