Ukraine urgently needs 42.9 billion USD, the West "changes" its attention, Kiev finds it difficult to turn commitments into guarantees

Ukraine's need for financial assistance from international partners, especially for social and humanitarian spending in 2024, will not decrease but will amount to $42.9 billion.

A building in the city of Izmail, Ukraine. (Source: Reuters)

On his way back from the annual meetings of the World Bank (WB) and the International Monetary Fund (IMF), Ukrainian Finance Minister Sergii Marchenko posted on Facebook that meeting Kiev's main partners in person at the conference helped them significantly shorten processes that would have taken longer through emails or online meetings.

“This is a great opportunity to expand cooperation and gain support from new countries,” said Sergii Marchenko.

Overall, according to the Ukrainian Finance Minister, support for Kiev remains "unanimous, there are guarantees of funding, including from the EU and the US - this is especially important for Ukraine. We have agreements with Japan and the UK. We are working to turn those guarantees into concrete commitments".

However, the problem, revealed by Finance Minister Sergii Marchenko in an interview with Reuters , is that Ukraine is having more difficulty securing financial support, as the attention of officials in key donor countries turns to upcoming internal elections and rising geopolitical tensions around the world.

“I see a lot of fatigue, I see a lot of weakness among our partners, they seem to want to forget about the conflict, but in fact it is still going on, on a full scale,” Marchenko said on the sidelines of the WTO and IMF meeting in Marrakech.

As a result, Ukraine is now having to “double its efforts to convince our partners to support us compared to previous annual meetings” in April.

Since the conflict with Russia broke out, Ukraine has needed to secure financial support from the West to cover its budget shortfall. In 2024, forecast threats and full-scale, long-term conflict will require financial support from international partners, especially social and humanitarian spending, to reach $42.9 billion.

However, this goal of Kiev has encountered more difficulties when the negotiations in the past week were overshadowed by the world's hot spot in the Middle East - the Hamas-Israel conflict broke out just as delegates were on their way to the Conference.

“Geopolitical changes and internal political situations in different countries” are reducing governments’ desire to support Ukraine, Mr Marchenko said, citing upcoming elections in the US and the European Union next year.

Ukraine has now set aside tax revenues and additional funds raised from internal debt, but the country will still have to rely on external assistance for the bulk of its spending requirements next year.

According to Ukraine's finance minister, the country has received some commitments, such as $5.4 billion from the IMF program. But they are also expecting commitments from Japan and the UK. Of course, that includes key partners and allies, the US and the European Union (EU).

The EU is working on a 50 billion euro ($52.6 billion) package to support Ukraine from 2024 to 2027. Kiev is looking to receive 18 billion euros of that in 2024, in line with the package's progress this year, Marchenko said.

Minister Marchenko also welcomed Western efforts to tap into the frozen Russian state assets. Regarding the progress, he said, “what was previously called an ‘achievable goal’ now looks like a plan.”

In addition, Ukraine’s fundraising efforts also involve transparency in the use of funds from international donors. Kiev has recently emphasized that “transparency and accountability in the use of funds from international donors are a top priority for the government and an important asset in building trustworthy partnerships.” Accordingly, the Ministry of Finance of Ukraine and the SOERA project of the United States Agency for International Development (USAID) are working together to optimize and strengthen the Ukrainian government’s monitoring, verification and reporting system on the use of donor funds.

Since the conflict with Russia began in February 2022, Ukraine has received nearly $33 billion from G7 countries. International money has become the main source of funding for balancing the state budget and for the country's vital expenditures.

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