Chief Executive Officer of UMG Investments Andriy Gorokhov has participated in the panel discussion “Ukraine and EU: The Growth Through Economic Partnership”, #UkraineHouseDavos 2020
Investment attraction and expansion of mutual trade relations between Ukraine and the European Union are of the top-priority issues.
For this very reason, the panel discussion “Ukraine and EU: The Growth Through Economic Partnership” took place on January 21, 2020 in #UkraineHouseDavos within the World Economic Forum hosted in Davos.
Both Ukrainian and international speakers find the Ukrainian market underestimated by investors. The reforms put in place during the last five years, as well as the implementation of the deep and comprehensive EU Free Trade Agreement (FTA+) create new opportunities for investors and the country itself.
“The EU market – there are approximately 500 million consumers – represents great opportunities for Ukraine”, – Head of the Office of the National Investment Council of Ukraine Olga Magaletska believes. “The EU currently has the largest export market for Ukraine; in 2019, its share in the country’s export was 42%”.
According to Founding Partner and Chief Executive Officer of Horizon Capital Lenna Koszarny, “The Deep and Comprehensive Ukraine-European Free Trade Area Agreement is a real breakthrough agreement catalysing seismic implications in Ukraine’s economy. Since the signing, the country rapidly re-oriented to the EU market. However, this is just a beginning – currently Ukraine’s export per capita is 6.4 times lower than in Central and Eastern Europe. It means that we have much room for further growth”.
At the same time, as Director General, Head of Operations of European Investment Bank (EIB) Jean-Christophe Laloux says: “EIB still believes in Ukraine; the bank has already invested UAH 6 bln and plans to increase the amount by additional UAH 500 mln in 2020”. He also noted the risk of slowing down or termination of reforms. The unwillingness to put painful, but not less necessary reforms may adversely affect investors’ enthusiasm.
Chief Executive Office of SHERP Yaroslav Prygara also finds it important for Ukraine to keep target-driven reforms on track: “As a citizen of Ukraine, I feel happy that the hryvnia improves its positions and the economy grows. However, as an exporter, I have many questions regarding the conditions the country create for me. Ukraine needs a strategy how to balance these interests so that improve the peoples’ welfare and create all the necessary conditions for investors at once”.
Chief Executive Officer of UMG Investments Andriy Gorokhov considers Ukraine to be an attractive place both for internal and foreign capital investors: “The capital which investors put in Ukraine’s projects serves the best prove for this. Money invested speak volumes and such investors as Cargill, TIS, SALIC, Bayer, DTEK Renewables, Bakcell, Snap Inc, Blackstone Group and Stada, which have already put their money in Ukraine, as well as EuroCape New Energy, Total Eren & NBT, Kronospan, Epicentr K, HEAD, projects of which are in progress, prove the investment attractiveness of this country. Therefore, nobody says about the need to suspend the reform “homework”. There is enough free capital, but the rivalry for it is intensive. Only those countries receive it, which are in better condition to receive the foreign capital and create conditions for local investors. Since 2015, such countries as Kenya, Armenia, Serbia, Nigeria and Botswana carried out a range of reforms that boasted higher efficiency in terms of the private capital attraction than ours, thus ousting us from 78 to 83 position in Venture Capital & Private Equity Country Attractiveness Index. Their reforms mostly bear resemblance of Poland’s experience. Another factor of successful foreign investments attraction is availability and cost of debt. With this regard, Ukraine is on the right way. It is highly probable that value of commercial loans granted by Ukrainian banks will reach 10-12% in the hryvnia before the end of 2020. Investors in need of a debt capital enabling to implement the project itself through the liquidity and improve its investment attractiveness might find it interesting.
On the other hand, when Ukraine completes the necessary reforms, they will allow to equally compete on the international capital markets. Owning to the international funding, our economy can transit from the gradual growth to a comprehensive economic breakthrough. UMG Investments is sure of its investment formula – “capital + people + strategy + vision”. We believe that Ukraine is capable of creating conditions that will inspire additional investments and, accordingly, the country’s economic growth. That will bring benefits for both the existing and new market players”.