Export finance in Ukraine: reforms are needed
State export support is a key instrument for strengthening a country’s exports and improving exporters’ competiteveness in global markets and value chains. Export promotion can be split into three categories: information provision, export finance as well as protection against political and commercial risks. Ideally, these three elements are part of one unique state export finance strategy. Such a strategy ranges from supporting trade fair participation and provision of country risk assessments to information on market structures and conditions for market access. In addition, short-, medium, and long-term export financing, backed by state or private credit insurance, is of importance.
The German Economic Team has been advising the Ukrainian government on export promotion for many years, in particular in the development of a state export credit agency. To assess the main challenges for exporting enterprises in Ukraine, a survey has been conducted in cooperation with the German-Ukrainian Chamber for Industry and Commerce as well as the Ukrainian Chamber for Industry and Commerce. The results show considerable obstacles in the area of export financing, which coincide with a low level of knowledge about export finance opportunities and about forms of possible support. The newly establised Ukrainian Export Credit Agency turns out to be particularly weak and not fully operational due to legal restrictions.