Khyber Pakhtunkhwa’s financial woes have deepened significantly over the past six months. Reports from the Treasury Department paint a troubling picture as the province’s debt has surged to a staggering 632 billion 44 crore and 80 lakh rupees by the end of the fiscal year 2023, marking an alarming increase of 101 billion 72 crore and 72 lakh rupees since earlier reports.
The rise in debt is largely attributed to mismanagement and ineffective financial policies by the provincial government. During the period from June to December 2023, the borrowing rate spiked by 19.17%, primarily fueled by adverse fluctuations in exchange rates. This volatile economic environment has exacerbated the province’s financial burden, making it increasingly reliant on loans from international aid agencies.
Critics argue that the government’s inability to curb expenditures and enhance revenue streams has contributed significantly to this fiscal crisis. Despite claims of fiscal discipline, the reality paints a different picture: repayments totaling 19 billion 16 crore and 20 lakh rupees were made during the same period, encompassing both principal payments amounting to 12 billion 79 crore and 80 lakh rupees and interest payments totaling 6 billion 36 crore and 40 lakh rupees.
Moreover, the government’s strategy of acquiring new loans worth 37 billion 45 crore and 80 lakh rupees has raised eyebrows, further questioning its ability to manage public funds responsibly. The bulk of these loans, approximately 89.5%, are allocated to 32 ongoing projects funded by international aid agencies, including substantial contributions from the Asian Development Bank and the World Bank.
The breakdown of these loans reveals a troubling trend: allocations include 310 billion 90 crore and 38 lakh rupees from the Asian Development Bank, 254 billion 81 crore and 21 lakh rupees from the World Bank, and sizable contributions from agencies like JICA, the French Agency, and others. These funds are earmarked for various sectors including transportation, economic development, energy, health, education, water management, and agriculture.
Amidst these financial challenges, concerns over transparency and accountability within the provincial administration loom large. The lack of stringent financial oversight and failure to implement effective fiscal policies have compounded the province’s economic woes.