Statement by Prime Minister Denys Shmyhal at Government session

Dear colleagues, fellow Ukrainians!

We are starting a Government meeting.

Our focus is on drones and other military innovations.

The key task is to step up production of drones, ammunition and other modern weapons and supply them to the defence forces.

President Volodymyr Zelenskyy has set a clear goal – to produce one million drones for the frontline this year.

Given the base and potential we have today, this is a very realistic task.

The Government is working systematically to increase the number of Ukrainian drones on the frontline.

We rely not only on state projects but also on private businesses. We rely on the development of the arms market.

When 4 out of 5 companies in the defence sector are private businesses, it brings efficiency, innovation and speed.

Over the past year and a half, we have completely changed the rules of the game. We have adopted about 20 laws and regulations that shape the arms market.

We have also:

• simplified the approval of UAVs for operation;
• removed VAT and import duties on drone equipment;
• created training grounds for pilots and testing of new types of drones;
• simplified the write-off procedure.

Today, around 200 companies produce drones in Ukraine, compared to just seven the year before.

In 2023, Ukrainian companies produced and the state purchased 100 times more drones than in 2022.

In general, the Army of Drones has kick-started the development not only of the UAV market, but of the entire defence-tech sector in Ukraine.

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Today we are adopting three important resolutions that will further strengthen the Ukrainian defence industry.

The first is a document on the deregulation of ammunition production.

Last summer, the Government launched a pilot project to produce ammunition for drones.

To do this, we expanded the range of potential manufacturers, eliminated bureaucracy, and created clear algorithms from development to commissioning.

In six months, more than 10 manufacturers have been registered, more than 20 samples of ammunition have been approved for use, and another 30 are at various stages of testing.

Now we are extending the pilot project for the production of ammunition for drones to the production of ammunition of all types and improving the procedure for registering manufacturers.

New enterprises will be able to start working quickly. In this way, we will strengthen our army in the shortest possible time.

The second resolution concerns the pricing of UAV production.

From now on, drone manufacturers will have to revise their price calculations downwards if their profit exceeds 25%.

This will help eliminate potential risks of overpayment and misuse of funds in the public procurement of drones.

Indeed, the state is interested in fair and transparent contracts.

The third resolution we are adopting today is on fair defence procurement.

From now on, defence procurement will be carried out under a competitive procedure through the closed module of the Prozorro system. We are solving several tasks at once.

Firstly, we guarantee continuity, sustainability and controllability in the supply of our army with everything it needs.

Secondly, we are establishing transparent pricing, where the state does not overpay and businesses make a profit.

Thirdly, we are creating safeguards against leaks of information that pose security risks.

***

The issue of defence capability and provision of our army is a top priority.

Last year, we spent 60% of our budget on security and defence.

This year, hundreds of billions of hryvnias will be allocated to ensure that the Ukrainian military has everything it needs.

2024 should be the year of military innovation in Ukraine.

We are beginning to actively develop robotic technologies on the battlefield.

We are strengthening the protection of the Ukrainian sky.

We pay a lot of attention to the development of electronic warfare systems.

We are working separately on projects of automatic turrets and demining machines.

I have already talked a lot about drones today, but the number of new developments is really impressive – it strikes russian equipment, infantry and other military targets.

We are in constant communication with volunteers, the public sector, engineers and entrepreneurs.

I thank them for their initiative, energy and perseverance. Together we will do more.

I thank everyone who is working today to ensure that the Ukrainian army has everything it needs to defend and win.

And Ukraine will win.

Thank you for your attention! Glory to Ukraine!