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Egypt supply minister says close to wiping out graft in wheat sector

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CAIRO (Reuters) – Egypt’s supply minister said the world’s top wheat buyer is close to eradicating graft in its strategic sector, defending the country’s management of the system against criticisms that it is vulnerable to corruption.

He said authorities distribute 6 billion loaves of bread to citizens each month and that a smart card system rolled out in 2014 had virtually ended graft in the system.

Officials, traders and bakers who spoke to Reuters for a March 15 story on the wheat sector said reforms, including the smart card system, had failed and ended up fuelling more corruption.

Challenging the Reuters story, Supply Minister Khaled Hanafi repeated his assertions that the system has saved millions of dollars in bread subsidies, reducing imports, and ended shortages that once prompted long queues outside bakeries across the country.

“We have a system now that counts every single loaf of bread consumed,” he said in an interview.

A Reuters spokeswoman said the news agency stood by its story.

Wheat has become a key issue in recent months because the stability of Egypt’s supply chain has been threatened by an agricultural quarantine official’s zero-tolerance policy on ergot, a common fungus.

The policy caused a mass boycott of state wheat tenders. The quarantine official was removed from his position.

In 2014, President Abdel Fattah al-Sisi’s government rolled out a system of smart cards designed to stop unscrupulous bakeries selling government-subsidised flour on the black market.

Corruption had been close to eliminated, Hanafi said in the interview, because the smart card system is effective and allows the ministry to monitor flows of bread.

The stakes are high for Sisi, who has promised to end graft, including irregularities in the wheat industry. Wheat shortages have sparked riots in the past. When Egyptians revolted against autocrat Hosni Mubarak in 2011 one of their most potent chants was “Bread, freedom and social justice.”

The bread subsidy programme, which feeds tens of millions of poor Egyptians, is central to avoiding unrest.

Under the smart card programme, each family is provided with a plastic card enabling it to buy five small flat loaves of bread per family member a day.

Internal statistics produced by the Ministry of Supply and reviewed by Reuters suggest the problems with the smart card system were considerable.

Hanafi says the system is almost foolproof and that his ministry has kept corruption to a minimum, in contrast to the past, when he says 50 percent of Egypt’s flour supply was stolen.

“We are serving 80 million Egyptians. And we are serving 6 billion loaves of bread per month,” Hanafi said.”Any fraction, any tiny small fraction in absolute figures, could be relatively large.┬áBut as a percent it is nothing. It is less than even the normal level of error that exists.”


(By Michael Georgy. Editing by Simon Robinson, Veronica Brown and Dale Hudson)

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