KARACHI : Syed Mazhar Ali Nasir, a central leader of the United Business Group and former Senior Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has raised serious concerns about Pakistan’s growing circular debt, labeling it as one of the most pressing challenges facing the economy. Speaking on the occasion of Pakistan’s Independence Day, Nasir highlighted that the circular debt has ballooned from PKR 400 billion in 2012 to a staggering PKR 2.5 trillion in 2024—a six-fold increase that is crippling the nation’s financial stability.
Nasir pointed out that the primary driver of this unsustainable debt is the massive payments made to Independent Power Producers (IPPs) under capacity charges, which have surpassed PKR 1.3 trillion. These payments, regardless of actual electricity production, have caused a severe cash flow crisis in the power sector, deterring investment in critical infrastructure and leading to increased tariffs for consumers. He warned that the ongoing rise in circular debt not only burdens the national treasury but also damages the country’s credit rating and investor confidence.
Calling for urgent reforms, Mazhar Ali Nasir urged the government to renegotiate IPP contracts, reduce capacity charges, and improve the efficiency of electricity production. He stressed that without immediate and decisive action, circular debt will continue to be a significant impediment to Pakistan’s economic growth and prosperity, posing a serious threat to the nation’s future.
