Business Update: April 28 – World Bank allocates extra $135 million for Ukrainian health care

The World Bank has allocated an extra $135 million to support Ukraine’s health system reform and boost its COVID-19 response. In the early hours of Tuesday the new finance was unlocked as part of what the bank said was an emergency response to bolster Ukraine’s health sector because of the coronavirus pandemic.

The World Bank stated: “This additional financing will help Ukraine upgrade up to 40 hospital emergency departments and stroke units, enabling hospitals to perform complicated medical procedures using hi-tech equipment and appropriate treatment protocols.”

Patients should have the opportunity to choose any hospital in Ukraine and have their costs covered by the state budget, World Bank Acting Country Director for Belarus, Moldova, and Ukraine Alex Kremer said, as reported by Interfax. The World Bank has already provided $215 million to help support Ukrainian health care reform, providing assistance for the renovation of urban hospitals and rural health centers, the purchasing of modern equipment, and improvement in the quality of health services.

A Ukrainian agricultural land market is to be launched in July 2021, after President Volodymyr Zelensky signed an historic new law on April 28 after parliament passed it on March 30. The bill on a land market allowing Ukrainian farmers to buy and sell land between each other and other third parties will come into effect next summer, but it has a number of initial limitations, the press service of the President’s Office reported.

President Zelensky stated: “This is an historic moment for all Ukrainians and for me personally. Ukraine has been waiting for this law since independence. It was not an easy fight.”

From July 1, 2021, ownership of agricultural land plots of ​​up to 100 hectares can be acquired, but only by citizens of Ukraine. From January 1, 2024, companies and legal entities owned by Ukrainians will also be able to buy and sell land plots up to 10,000 hectares, Interfax reports. The new law prohibits the sale of state land or land belonging to communes and municipalities. The question of allowing foreigners and foreign firms to buy farm land will be put to a national referendum, but multiple polls show this has little public support at the moment. The new law is also expected to be a starting point for further development of a modern land market.

The press service of Zelensky further stated: “The document provides for the formation of a legislative framework for introducing market-based turnover of farmland. The law signed by the president will empower citizens to exercise their constitutional rights to freely dispose of their property and will provide for transparent terms for acquiring ownership of agricultural plots of land by citizens of Ukraine.”

The International Finance Corporation (IFC) said it has helped small-scale farmers in Ukraine get access to $1 billion worth of working capital.  IFC, a member of the World Bank Group, has helped over 2,000 small farmers in Ukraine gain access to the capital through so-called “crop receipts”— an ongoing initiative that the bank says funds farmers and allows them to maintain productivity and profitability.

Jason Pellmar, IFC Regional Manager for Ukraine, Belarus, and Moldova, said: “Introducing crop receipts in Ukraine is an initiative that IFC commenced from the bottom up, including legislative training of financial institutions, and raising awareness among farmers. Ukrainian farmers now widely use this simple, convenient, and reliable instrument to get much-needed finance. This innovation is an important part of IFC’s efforts to help Ukraine realize its agribusiness potential.”

Sales of new, modern housing in Kyiv’s primary market have plunged by 65-75% amid lockdown with little over 100 new homes sold in the capital. Roughly a quarter of the so-called “premium” (new build) apartments in the capital’s primary market are being sold in comparison to the number last year. Real estate experts at Kiev Standart say that only 116 apartments have been sold during the COVID-19 lockdown, according to their research, indicating a market frozen by the pandemic quarantine.

Kiev Standart told Interfax Ukraine: “The situation with the pandemic and the introduction of lockdown directly affected sales, reducing the figure by 65-75%. According to our estimates, only 116 apartments were sold (in Kyiv) in March 2020, and this was largely due to the achievements of previous periods, and sales in April almost stopped.”

Recent tax payments to the national budget have surged by about $445 million, or 63% of the government’s target, according to the State Treasury. Amid the COVID-19 crisis and looming economic downturn, Ukraine has been levying extra taxes to raise capital for its required emergency spending. A small number of state-owned firms and state-owned banks have been called upon to pay more, and pay quicker.

Ukravtodor has started repairing a major Kyiv-Mariupol highway and plans to restore 33.5 km in 2020. The project is not only important for employing a significant amount of workers, but also strategically important. Russia’s attempted blockade of the Azov Sea has seen the major Donetsk Oblast port city fall under a partial embargo.

The State Automobile Roads Agency of Ukraine (Ukravtodor) has started to overhaul the N-08 road in Cherkasy region. Ukravtodor said on its Telegram channel that this is the first overhaul in the Cherkasy region over the past 12 years. The agency plans to repair a stretch of highway from Kyiv Boryspil to Dnipro, Zaporizhia, and then Mariupol before the end of this year.