Egypt wheat commission submits corruption report amid calls for minister to resign

August 22, 2016 2:17 PM EDT

Egypt's Supplies Minister Khaled Hanafy talks at his office in Cairo, Egypt, November 29, 2015. REUTERS/Asmaa Waguih


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By Eric Knecht and Maha El Dahan

CAIRO (Reuters) - A fact-finding commission investigating corruption in Egypt's domestic wheat supplies has delivered its final report to parliament, a lawmaker said on Monday, amid mounting pressure on the minister of supplies to resign.

Egypt, the world's largest importer of wheat, has been mired in controversy over whether much of the roughly 5 million tons of grain the government said it procured in this year's harvest exists only on paper, the result of local suppliers falsifying receipts to boost government payments.

The wheat corruption report, delivered late last week to the head of parliament, concluded some 200,000 tons of wheat was missing at ten private storage sites visited by the commission, Yasser Omar, a lawmaker on the commission, told Reuters.

"Of course there is more than one million tonnes missing ... but we won't be able to know exactly how much is missing because we cant inspect every single site," he said.

Minister of Supplies Khaled Hanafi told Reuters last month only 4 percent of this year's procurement was missing. Grains industry officials have said the figure likely exceeds 2 million tonnes.

If Egypt's local wheat procurement numbers were misrepresented, it may have to spend more on foreign wheat purchases to meet domestic demand - even as the country faces a dollar shortage that has sapped its ability to import.

Parliament will discuss the report this week before questioning Hanafi and possibly holding a vote of no-confidence that could remove him from office, Omar said.

CALLS TO RESIGN

Egypt's fact-finding commission has brought an unprecedented level of scrutiny to Hanafi's management of the commodities sector which has already faced criticism from grains industry officials over issues such as hacked bread distribution smart cards to subsidized rice shortages.

Nader Nour El-Din, a former adviser to the ministry of supplies, said Hanafi's policies had allowed corruption to flourish, prices on staple commodities to jump to "unprecedented levels," and public sector companies to be "destroyed" amid favoritism for private sector businesses.

Hanafi maintains that his stewardship of the supplies ministry has led to numerous successes that include savings in flour and wheat as well as the end of bread lines.

While Hanafi has not been accused of directly profiting from corruption, parliamentarians, industry officials, and media commentators have in recent weeks pinned blame for the wheat crisis largely on his shoulders, with many calling for his resignation.

"The minister has to bear political responsibility for this," said Omar.

Criticism took an unexpected turn late last week, when fiery media personality and lawmaker Mustafa Bekry accused Hanafi on television of using 7 million Egyptian pounds ($788,300) in state funds to maintain a residency at a posh downtown Cairo hotel.

The minister later said in a statement he had paid for the long-term hotel residence with his own personal funds.

Appearing before a parliament committee on agriculture on Monday, Hanafi chose not to respond to questions about the hotel controversy, saying only that he had no plans to step down.

"My resignation is not whatsoever on the table," he said.

(Editing by Mark Potter)



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