The reform of state and municipal property management is gaining momentum in Ukraine, as described by Oleksii Movchan, the Deputy Chairman of the Committee on Economic Development.
“Its important milestone was the adoption of the Law of Ukraine “On Amendments to Certain Legislative Acts of Ukraine on Improving Corporate Governance” (Draft Law No. 5593-d), which improves corporate governance of state-owned enterprises and brings them closer to the standards of the Organisation for Economic Cooperation and Development (OECD).
What is the situation with state-owned enterprises?
There are 3,116 state-owned and 14,056 municipal enterprises in Ukraine. However, statistics show that the state and local governments are not always effective owners. Over the past six years alone, the number of profitable state-owned enterprises among all operating ones has fallen by almost half. In 2023 alone, the payables of state-owned companies reached UAH 912.8 billion, or more than $23 billion.
What has been done?
Over the past 6 years, almost 5.8 thousand state and municipal facilities have been sold in the Prozorro.Sale system, bringing UAH 16.5 billion to the budgets of all levels. Abandoned factories, dilapidated soviet sanatoriums and old workshops that had been burdening the state and communities for years have found new owners who are creating businesses, new jobs and paying taxes.
What is the current stage of the reform?
We are currently in the process of triage – categorising state-owned enterprises. At the same time, state-owned enterprises are being transformed into joint-stock companies and supervisory boards are being set up to ensure the efficiency of the company's management.
State-owned enterprises that are not recognised as strategic will be privatised, leased through public online auctions or liquidated. We are talking about more than 1,200 state-owned enterprises.
Unfortunately, the public still has little awareness of how the reform is taking place, why it is needed and what it will bring. That is why I will continue to inform and answer frequently asked questions.