Finance Minister Serhiy Marchenko and World Bank Regional Country Director for Belarus, Moldova and Ukraine Arup Banerji have signed a loan agreement for EUR 300 million in order to continue implementing economic recovery projects, the Finance Ministry said.
“The loan is the result of structural reforms in the areas of demonopolizing key sectors of the economy, strengthening anti-corruption institutions, improving the work of land and capital markets, as well as improving the social welfare system,” the ministry said on its website on Monday.
As part of further cooperation between Ukraine and the International Bank of Reconstruction and Development, the World Bank Country Partnership Strategy for 2022-2025 is being developed. Its goal is Ukraine’s achievement of sustainable economic recovery and growth. The priorities of the strategy will be energy, agriculture, and transport system, the Ministry of Finance said.
Ukraine received its first loan from the IBRD in the amount of $350 million for the development policy in the field of economic recovery in June 2021.
Ukraine exported furniture worth almost $1 billion in January-November 2021, which is 43% more than in the same period last year, Oksana Donska, the head of the cluster platform of the Ukrainian Association of Furniture Manufacturers.
“The Ukrainian furniture industry exported furniture for almost $1 billion, which is 43% more than in the same period last year. Compared to previous periods, this is an absolute record, and in comparison with neighboring Poland, with the same forest resources and human capital, this is 14 times less,” Donska said at a press conference in Kyiv.
In her opinion, in order to increase the production and export of furniture, Ukraine, first of all, needs a transparent and stable market for raw materials, clustering (association of furniture makers based on industrial parks), as well as a trilateral partnership of business, education and authorities in personnel training.
According to Donska, within the framework of the strategy being developed, Ukrainian furniture makers set a task to enter the top 10 furniture exporters in the next 10 years.
“Today the leader is China, which exports furniture dozens of times more than Germany, which ranks second, Poland is third. That is, we want to catch up with Poland and Germany, exporting furniture for at least $14 billion. Today, Ukraine exports furniture to 199 countries of the world, and more than half goes to Germany and Poland, but for re-export. And today we have every opportunity to enter the direct markets for the sale of our products,” the expert said.
According to her, the amount of foreign investments in the furniture industry over the past 5-8 years has exceeded EUR1 billion.
“Ukraine has all the prospects in the next 10 years to increase it by 5 times. Today Belgium, Austria, Canada, Denmark, the United States, France have already invested in the furniture industry – that is, the world leaders trust us and open their enterprises,” the expert noted.
According to President of the Ukrainian Association of Furniture Manufacturers Volodymyr Patis, attracting investments will allow to create an additional 200,000 jobs during this time.
“In the furniture industry, the quality of the workplace is changing a lot: there is a rethinking, automation, and today workers have a fairly high salary, which already competes with salaries in Poland,” he said.
The real gross domestic product (GDP) of Ukraine in the third quarter of 2021 increased by 2.7% compared to the same period in 2020, the State Statistics Service reported such an updated estimate, while earlier it estimated growth in mid-November at 2.4%. According to its data, nominal GDP amounted to UAH 1.498 trillion, and per capita – UAH 36,150.
The State Statistics Service added that compared with the previous quarter (taking into account the seasonal factor), GDP grew by 1.5%, which is slightly better than the preliminary estimate of 1.4%.
The statistics department clarified that the change in the deflator was 25.5%, compared with 26.4% in the second quarter and 20.7% in the first quarter of this year.
In September, the State Statistics Service also improved its estimate of the growth of the Ukrainian economy in the second quarter of this year – from 5.4% to 5.7% and set the nominal GDP at UAH 1.169 trillion.
Whereas in June, the department, on the contrary, worsened the estimate of recession of the Ukrainian economy in the first quarter of this year – from 2% to 2.2%, calculating the nominal GDP at the level of UAH 1.009 trillion.
According to the department, in the first quarter of 2020 the decline was 1.2% compared to the first quarter of 2019, in the second quarter of last year it accelerated to 11.2%, after which it slowed down to 3.5% in the third quarter and 0.5% – in the fourth.
Nominal GDP in the first quarter of last year was UAH 853.69 billion (deflator change – 5.3%), in the second – UAH 874.62 billion (5.6%), in the third – UAH 1.162 trillion (8.4%), in the fourth – UAH 1.301 trillion (17.5%).
The international vertically integrated pipe and wheel company Interpipe in January-September of this year saw $32.338 million in net profit, while for the same period last year it amounted to $162.458 million.
According to the interim unaudited consolidated financial statements according to IFRS for January-September 2021, pretax profit amounted to $56.505 million compared to $178.133 million in January-September 2020 (a decrease of 68.8%).
In addition, Interpipe has reduced free cash from $109.643 million at September 30, 2020 to $103.007 million at the end of September 2021.
As reported, Interpipe in January-September 2021 increased its revenue by 15% compared to the same period last year, to $757 million, reduced EBITDA by 30%, to $151 million and increased capital investments by 65%, to $45 million.
The company’s net debt was $301 million with a net leverage ratio (net debt to EBITDA) of 1.4x.
Interpipe is a Ukrainian industrial company, a manufacturer of seamless pipes and railway wheels. The company’s products are supplied to more than 80 countries around the world through a network of sales offices located in the key markets of the CIS, the Middle East, North America and Europe.
The ultimate owner of Interpipe Limited is Ukrainian businessman Victor Pinchuk and his family members.
New funds follow steps by Ukravtodor towards strengthening governance
-€190 million loan tranche to upgrade sections of M-05 Kyiv-Odesa road
-Funds extended as road agency takes steps towards strengthening governance
-Reform at Ukravtodor a litmus test for broader anti-corruption programme
Encouraged by steps taken by Ukraine’s state road agency Ukravtodor, the Board of Directors of the European Bank for Reconstruction and Development (EBRD) has approved a new €190 million loan tranche for further improvements to the country’s road infrastructure.
Part of a €450 million package, the tranche will finance the upgrade of sections of the M-05 Kyiv-Odesa road in the Kirovohrad, Mykolaiv and Odesa regions.
The provision of the new tranche follows efforts by Ukravtodor to review its governance systems, with a view to advancing reforms. These include a comprehensive anti-corruption action plan developed by independent experts, which was approved by a high-level steering group comprising representatives of the government, the president’s office, the EBRD and Ukravtodor itself.
The plan, which is already being implemented, envisages a robust approach to integrity compliance, improved corporate governance and internal anti-corruption controls, policies and procedures. It also aims to pave the way for a culture of integrity throughout the organisation.
Ukravtodor’s effort to fight corruption in road building is the pilot programme under the memorandum of understanding signed in October 2020 between the government of Ukraine and the EBRD to strengthen corporate governance in the state sector. It is seen as a litmus test for a broader anti-corruption and good governance programme backed by the EBRD and targeting Ukrainian state-owned enterprises and public-sector entities.
In addition, Ukravtodor has prepared an e-mobility action plan to support electric-vehicle deployment in the country and is establishing a Road Safety Department.
The EBRD is a leading institutional investor in Ukraine. To date, the Bank has invested almost €16 billion in 506 projects across the country, with a focus on assisting economic stabilisation, anchoring reforms, strengthening energy efficiency and energy security, and supporting agricultural and industrial projects as well as smaller businesses.
