Egypt prosecutor sifts wheat from chaff in corruption probe

The Egyptian government played a key role in wasting hundreds of millions of dollars of public money due to corruption in a wheat subsidy programme, according to a parliamentary report.

The 500-page report, which was also presented to MPs on Monday, has already led to the resignation of the supplies minister, Khaled Hanafi, amid growing criticism of the management of state subsidy programmes.

Hanafi was also accused of spending public funds on hotel accommodation, with one MP estimating the cost at $800,000 - a claim he denies.

Egypt's prosecutor general and an anti-corruption agency are now considering the parliamentary commission's report on corruption in the wheat industry.

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

From silo contracts to budgetary analysis to evidence from industry officials, the parliamentary report pointed to government involvement in mismanaging, and at times facilitating corruption in, subsidies intended to encourage agriculture and feed tens of millions of Egyptians.

It stated that government bodies had neglected their own storage facilities in favour of less regulated private sites, made contracts with "fake entities," and oversaw flawed reforms that caused subsidy spending to increase rather than decrease as publicly stated.

The parliament speaker, Ali Abdelaal, said he referred the report to the prosecutor and the "illicit gains authority", among other state bodies, for them to take any necessary action.

A report by the Reuters news agency earlier this year detailed how the government's wheat supply chain was riddled with corruption - from fraudulent wheat purchases by local suppliers to hacked smart cards that allowed bakers to steal flour - that has cost the country hundreds of millions of dollars per year.

Industry officials estimated that upward of two million tonnes could be missing from silos, forcing Egypt to import large quantities of additional grains to meet demand.