State could attract at least $15-20 bln of investment using its land bank
Ukraine needs foreign direct investment (FDI) to provide stable growth, and one of the fastest instruments for attracting at least $15-20 billion could be the offer of state-owned agricultural land estimated at 10 million hectares, Managing Partner of ICU Investment Group Makar Paseniuk has stated.
"Land reform would be a huge driver for the further development of our country, as it can be done quickly and it will quickly attract FDI," he said at the Ukrainian Financial Forum organized by ICU in Odesa.
Paseniuk said that the total area of agricultural land in Ukraine is estimated at 20-25 million hectares, of which about 10 million hectares still belong to the state. According to him, the average rent rate is $140-150 per hectare a year, which, taking into account the conservative estimate of a 10% rate, entails the cost of land of $1,500-2,000 per hectare.
"Thus, the cost of all state farmland is $15-20 billion, which can be compared with the existing IMF program in the amount of $17.5 billion or more, which twice as much as the NBU's net reserves of $6.8 billion," the expert said.
He urged the state to actively offer large investment projects in other sectors.
"I cannot name an economically viable project in which a private investor can now invest $1 billion," Paseniuk stated.