Public sector dominates Ukraine's drone market, bringing corruption risks - Nashi Hroshi group

He shared his opinions with Espreso TV.

"Currently, there is a certain balance of price-quality competition. That is, there is no critical threat that someone will capture and monopolize the market. There are several brands of drones that compete with each other. Of course, the public sector dominates, and there is a big risk here. The U.S. Inspector General pointed this out in his report published on the Pentagon's website in the spring. He said that there is a risk that corruption in Ukrainian procurement has shifted to the defense sector," Nikolov said.

According to the co-founder of the independent group Nashi Hroshi, defense procurement cannot be conducted through Ukraine's official state public procurement platform Prozoro due to national security concerns. It is essential that Russia remains unaware of suppliers and procurement volumes, but the supervision of these processes should be as effective as possible.

"Some businessmen allow themselves a higher margin. The government allowed 25% profit on military technological production. But there are cases, information from military units, of deterioration in the quality of some drones. It is important that the responsible structures in the Ministry of Defense and Ukroboronprom do not allow corruption to spread in the defense sector," Nikolov added.

• Ukraine's Minister of Digital Transformation Mykhailo Fedorov said that in 2024 Ukraine increased the production of long-range strike drones tenfold compared to last year.
• Ukroboronprom Director General Herman Smetanin said that in 2024 Ukraine caught up with Russia in terms of the number of attack drones produced, similar to Shahed drones.