Oleksii Semeniuk: Ukraine needs an economy of owners — millions of citizens should become investors

Ukraine’s recovery will require hundreds of billions of US dollars. According to World Bank estimates, reconstruction needs already exceed USD 500 billion. It is impossible to finance a project of this scale solely through the state budget and international aid. Ukrainians themselves have to become one of the sources of long-term capital — not only as taxpayers, but also as investors in their own economy.

Oleksii Semeniuk, Chairman of the National Securities and Stock Market Commission, writes about this in his op-ed “The Land of Investors” for Ekonomichna Pravda.

“Every strong economy has another source of growth — its own citizens. Not as taxpayers. As investors. It is this idea, in my view, should shape the next stage of development for the Ukrainian capital market,” emphasizes Oleksii Semeniuk.

Ukrainians are already showing readiness to invest. In just the first four months of this year, individuals purchased nearly UAH 70 billion worth of OVDPs (government bonds), and the total value of government bonds held by citizens already exceeds UAH 107 billion.

These figures reflect more than just confidence in government instruments. They show that a significant number of retail investors is already emerging in Ukraine, who are ready to manage their savings in a new way.

The next step should be to make it possible to channel these funds not only into government bonds but also into the development of Ukrainian businesses.

Private investment accounts (PIAs) could serve as one tool for achieving this. The model proposed by the Commission is based on practices that have been in use in developed economies for decades.

In particular, in the U.S., private investment accounts are held by about 40% of households, and the total value of assets accumulated in these accounts exceeds USD 11 trillion. Similar mechanisms are in place in the United Kingdom, Canada, and Japan.

Through the PIA, Ukrainians will be able to invest in financial instruments of the Ukrainian capital market, primarily in securities issued by Ukrainian companies. In effect, this provides an opportunity to invest not only in the state through OVDPs, but also directly in the development of Ukrainian businesses.

For long-term investments, legislative proposals provide for tax incentives. If funds remain in the account for at least three years, it is proposed that investment income, dividends, and interest be exempt from taxation.

At the same time, according to the Commission Chairman, the key objective is not simply to create a new financial instrument, but to foster a culture of long-term investment in Ukraine.

“We want investing to cease to be the privilege of a small circle of professionals and become a common financial habit for millions of Ukrainians,” notes Oleksii Semeniuk.

To achieve this, access to the capital market should be as simple as possible: just a few taps on the smartphone, clear instruments, transparent rules, and reliable investor protection.

“A strong economy begins when millions of citizens become its co-owners. And that is exactly how we will be able to build a country where money doesn’t sit under the mattress, but works for the welfare of the people, the development of Ukrainian businesses, and the future of Ukraine,” concluded the Chairman of the NSSMC.

Read Oleksii Semeniuk’s full opinion piece, “The Land of Investors,” on the Ekonomichna Pravda website.