IMF will soon begin a mission in Ukraine, stressing the need for anti-corruption measures

Julie Kozack, the spokesperson for the International Monetary Fund, said that a staff delegation will be sent to Ukraine soon to discuss the country's financing needs and to explore a possible new lending program. She also stressed the importance of continuing anti-corruption initiatives in the war-torn nation.

Yuliia Shvyrydenko, Ukrainian Prime Minister, announced on Thursday an audit of state-owned businesses, including those in the energy sector. This follows an alleged corruption scandal of $100 million that led to the suspensions of two cabinet members.

The anti-corruption authorities announced this week that they had arrested five people, and two more were still at large. They are suspected of being involved in a plot to control the procurement at Energoatom as well as other state enterprises.

Ukraine and the IMF are in discussions about a four-year loan program that will replace the existing four-year program of $15.5 billion. Ukraine has received $10,6 billion from that total.

Kozack informed reporters in a regular press briefing that IMF staff would focus its mission on policies to safeguard Ukraine’s macroeconomic stability, ensure its debt sustainability and reforms to increase domestic revenue and strengthen governance.

Kozack stated that Ukraine needed a robust anticorruption architecture in order to level the playing fields, protect public resources, improve business climate, and attract investment. He called efforts to combat corruption a requirement for Ukraine’s donors.

Anti-Corruption Institutions Must Be Able to Do Their Work

She said: "The latest evidence of corruption found in the energy sector... shows the importance of pushing forward with anticorruption efforts in Ukraine, and making sure that anticorruption institutions are given the freedom and trust to do their jobs."

Kozack stated that the IMF closely monitored discussions between Ukrainian authorities and creditors, even though it was not a party to those discussions.

She said that the IMF team, which is visiting Ukraine, would work with the international partners of Ukraine to identify the best financing vehicle to help the country fight the Russian invasion. Ukraine is now in its 4th year.

When asked about concerns expressed by Ukraine's GDP warrants holders about another debt restructuring last week, she stated that this would include ensuring any new financing was on "terms compatible with Ukraine's debt sustainability".

Last week, warrant holders said that they want a

"claim reinstatement mechanism"

As part of any new debt instruments they accept as part Kyiv’s long-sought restructuration of the debt instruments.

Ukraine requires a new IMF programme, as the agreement made in 2023 was based on the assumption that the war would be over by late 2025. This is not the case. In 2023 the same as now, Western countries must offer guarantees to the IMF to ensure the loan. The Fund does not normally lend to a war-torn country. (Reporting and editing by Lisa Shumaker, Deepa Babington and Andrea Shalal)

(source: Reuters)