Ukraine hopes to receive the next payment of its $17.5 billion IMF program early next year and will aim to issue $2 billion on debt markets in 2018, finance minister Oleksandr Danyliuk declared.
Oleksandr Danyliuk said that progress on the International Monetary Fund’s rescue plan depended on establishing a new anti-corruption court, as well as a final agreement on gas tariffs, which had so far proved elusive. The government had hoped to receive the long-delayed next tranche of IMF loans this year, but Danyliuk said he would press on with reforms and wanted to promote a “business as usual” message to investors since stabilizing the economy.
Speaking to Reuters on the sidelines of a summit with Ukraine, Georgia, Armenia, Azerbaijan, Moldova, Belarus and EU leaders in Brussels, he said he expected outstanding issues to be resolved soon.
“I think money-wise it will be early next year,” he said of the next payment from the Washington-based global lender.
The next tranche is expected to be about $2 billion, according to the central bank. Ukraine’s Western-backed leadership is seeking to impress with reforms that would bring it closer to the European Union. After restructuring the banking sector, the country returned to international debt markets in September. Ukraine raised $3 billion in its first sovereign bond issue since restructuring its debt in 2015 and Danyliuk said he had agreed with the IMF that Ukraine could issue $2 billion next year in Eurobonds.
“We will not rush to the market, but we have a good story to tell to investors,” he said.
The money would help meet Ukraine’s debt repayments and IMF money would go towards building up currency reserves. Ukraine has sought to show investors that it is no longer the graft-ridden former Soviet republic that faced bankruptcy in 2015, but Danyliuk conceded the country had so far failed to raise much money with its privatization plans.
“This is worrying,” he said, saying there were 3,000 companies under state ownership that the private sector should consider buying, including 100 large, significant companies.
“Privatization is the number one priority. It is crucial for attracting foreign investors,” he said.
He added the government of President Petro Poroshenko aimed to raise UAH 22 billion ($817.84 million) from privatization next year, compared with UAH 3.5 billion this year. Danyliuk conceded there was “some truth” in European Union concerns about the slow pace of reforms in Ukraine. There had been achievements, including in revamping the police force, establishing a wealth declarations database for officials and modernizing the banking sector and state-owned energy firm Naftogaz. But some proposed laws, such as that to legalize agricultural land sales and to set up an independent anti-corruption court, have been pushed back, while some existing reforms were under threat.
“It is getting more difficult. I am getting some serious push back. I am spending more time defending what we achieved. That worries me,” he said. “We are working against vested interests, corruption interests. This is a fight. There is a campaign against me”. (UNIAN/Business World Magazine)