Khyber Pakhtunkhwa’s debt surges to historic high of Rs679bn
Aziz Buneri
PESHAWAR: The debt burden on Khyber Pakhtunkhwa has reached an unprecedented level, exceeding Rs679bn due to growing reliance on international financial assistance, with the World Bank and Asian Development Bank (ADB) alone dominating the portfolio.
Over the past year, the province recorded an alarming increase of nearly Rs150bn in international loans, raising critical questions about fiscal sustainability and financial management of the province.
According to documents from the KP Finance Department, the province’s debt, sourced from eight international lending agencies, stood at Rs679.54bn as of June 30, 2024. This marks a 28 percent surge in just one year, the highest annual increase ever recorded. During this period, the province acquired Rs75.96bn in new loans, while adjustments in exchange rates and a reduction in principal repayments added Rs72.86bn to the total debt.
Currently, 90 percent of KP’s debt comes from the World Bank and the ADB. The ADB’s loans amount to Rs305.20bn, while the Asian Infrastructure Investment Bank (AIIB) has provided Rs16.20bn. Meanwhile, the International Development Association (IDA), a subsidiary of the World Bank, has extended loans worth Rs291.26bn.
Other key contributors include Agence Française de Développement (AFD) with Rs40.20bn, the Japan International Cooperation Agency (JICA) with Rs23.34bn, the International Fund for Agricultural Development (IFAD) with Rs2.10bn, and the International Bank for Reconstruction and Development (IBRD) with Rs710.91mn. German loans stand at Rs49.92mn.
During the fiscal year 2023-24, the provincial government repaid Rs24.78bn in loans and paid Rs13.95bn in interest.
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