On September 15, the Cabinet of Ministers of Ukraine presented the draft State Budget for 2022. The government intends to allocate UAH 319 billion to the security and defence sector, which is 5.95% of GDP. We provide details on changes in funding for this sector, as well as social security for veterans.
In 2021, the total budget for national security and defence amounted to UAH 267 billion - this is direct expenditures on the sector itself (UAH 247 billion) and state guarantees (UAH 20 billion). The targets for 2022 have increased significantly, to UAH 319 billion. In addition to 20 billion for state guarantees and 262 billion for the sector, the state plans to attract an additional UAH 21 billion from France, the UK, and the United States. Another UAH 15 billion is planned to be provided for state support for military personnel housing.
Increase in Defense Ministry expenditures
Funding for security and defence increased last year, but the Ministry of Defense received only UAH 5 million more than in 2019. The sector’s budget increased due to the security component - the Ministry of the Interior and the Security Service. In comparison, the Ministry of Defence budget will increase significantly in 2022. It is expected to increase by UAH 13 billion, including a planned increase for Armed Forces financing of UAH 8 billion (to UAH 97.4 billion) and an additional UAH 5.7 billion for the purchase of military equipment (to UAH 28.4 billion).
What will the budget be spent on?
Traditionally, the largest expenditures will be on salaries, UAH 165 billion, which is UAH 16 billion more than in 2021 It is planned to allocate UAH 4.2 billion more for military equipment and armaments, increasing the line item to UAH 43.9 billion.
In general, the distribution of expenditures is as follows:
- cash security and salaries (with accruals): UAH 165 billion
- creation, purchase, modernization, and repair of armaments and military (special) equipment: UAH 43.9 billion
- one-time financial assistance: UAH 5.5 billion
- food: UAH 5.2 billion
- payment for utilities and energy: UAH 5.1 billion
- construction (purchase) of housing: UAH 2.6 billion
- medicines and dressings: UAH 763 million
The Ministry for Veterans Affairs plans to cover the housing queue of 100% for ATO / JFO veterans next year. Namely, the government plans to allocate UAH 5.5 billion to provide housing for more than 4,000 Ukrainian soldiers.
Currently, the draft State Budget has been registered in the Verkhovna Rada and is awaiting consideration by parliament. NAKO will actively monitor parliamentary discussions and changes to the budget.