Development of the processing industry in Ukraine: Key tasks and challenges

According to Dmytro Kysylevsky, Deputy Chairman of the Verkhovna Rada Committee on Economic Development, the growing demand for imported goods creates a need for the construction of approximately 600 processing plants in Ukraine. The cost of these enterprises, which are focused on production for export and domestic consumption, is estimated at around $90 billion.

Unfortunately, the share of the processing industry in Ukraine is extremely small, amounting to only 8% in 2022, compared to the benchmark of 20% according to the OECD. Comparing this figure to neighbouring countries, where it is approximately 20%, Ukraine has decided to move towards increasing the share of the manufacturing industry.

According to Dmytro Kysylevsky, the construction of such enterprises will be a key step towards achieving the 20% processing target. This, in turn, will help reduce unemployment and have a positive impact on the welfare of the population.

It is noted that for Ukraine, diversification of the economy towards the processing industry is strategically important, including the sectors of mechanical engineering, rocketry, and the defence industry.

For the effective construction of processing plants, Ukrainian companies need to introduce investment insurance against military risks. It is noted that some efforts of the Ministry of Economy are already providing insurance through MIGA and DFC, but it is important to expand this to domestic companies.

Dmytro Kysylevsky calls for consideration of draft law 9015, which aims to ensure the availability of investment insurance for Ukrainian companies. However, this draft law is currently being blocked by the opposition, making it difficult for local production to develop.