Ukraine allocates additional funds and resources for its military.

The security and defense sector of Ukraine has been fully funded by the general fund of the state budget, as announced by the National Security and Defense Council of Ukraine. For January and February 2024, a total of 307.1 billion hryvnias (about $8.27 billion) has been allocated for this purpose.
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The security and defense sector of Ukraine has been fully funded by the general fund of the state budget, as announced by the National Security and Defense Council of Ukraine. (Picture source: Ukrainian MoD)

Furthermore, during this period, the government allocated over 5 billion hryvnias (about $134.6 million) from the reserve and special funds of the state budget to meet the immediate needs of the security and defense sector. It was also reported that, during January and February of this year, all monetary compensation and other social payments were fully made to the personnel of security and defense sector organizations.

However, the National Security and Defense Council indicated that an analysis had revealed cases of inefficient and irrational expenditures by some entities within the sector. The Cabinet of Ministers of Ukraine was informed about certain trends in the use of financial resources that could complicate the provision of resources to the security and defense forces.

Ukraine, as part of its efforts to strengthen its defense sector in the face of the Russian invasion, has significantly increased its production of weapons and defense equipment. In 2023, the Ukrainian defense industry tripled its production of weapons, with the active participation of 500 companies, including both state-owned and private entities. This increase in production includes a variety of equipment such as indigenous anti-aircraft systems, electronic warfare systems, and tactical gear like bulletproof vests, while focusing on self-sufficiency. For 2024, Ukraine plans to further increase its ammunition production, with an allocation of over 265 billion hryvnias (about $7.14 billion) for the production, repair, and purchase of weapons. Additionally, 90% of the drones used on the battlefield against Russian forces are produced locally.

Ukraine has also established strategic partnerships with foreign arms manufacturers to strengthen its defense industry. For example, the German arms manufacturer Rheinmetall announced the establishment of a repair center in Ukraine for Leopard tanks and other equipment supplied by Germany, with plans to start production of German armored vehicles in Ukraine in 2024-2025. This international cooperation is a crucial step towards integrating Ukraine into the European defense system and contributes to the country's autonomy in defense material production.

However, the Ukrainian defense industry faces significant challenges, including protecting production facilities from attacks, corruption, and professional management. Major investments in new physical infrastructures are considered unlikely due to the persistent threat of Russian aerial and missile attacks. Additionally, corruption and inefficient corporate structures are issues that Kyiv needs to address to achieve the scale of production necessary to meet its considerable military needs.

In summary, although Ukraine is making significant progress in strengthening its defense industry with the support of international partners and a considerable increase in weapons production, it still needs to overcome structural and security challenges to achieve full autonomous production capacity.

In related developments, the government announced that 9.6 billion hryvnias (about $258.3 million) had been transferred for the purchase of weapons, equipment, and protective means. Recently, it was reported that since the beginning of this year, the government has allocated 20 billion hryvnias (about $538.5 million) for fortification structures and the construction of defensive lines. The Ministry of Defense received 3 billion hryvnias (about $80.8 million) for these purposes, and over 16 billion hryvnias (about $430.8 million) were distributed to several regional military administrations.