CAIRO, March 16 Egypt's food subsidy bill will
be 30 billion Egyptian pounds ($4.31 billion) this year, an
amount that is expected to remain stable in the next fiscal year
that begins in July, the new supplies minister said, pledging to
tackle a smuggling "mafia".
Khaled Hanafi was appointed last month after his predecessor
sacked top officials at the state-owned silos and storage
holding company and at the main wheat importing body amid
allegations of corruption.
Although corruption along the supply chain in the world's
top wheat importer has long been well-known, the new minister is
showing signs of being more outspoken than most about the issue
that leaches much-needed funds from an economy struggling to
recover from three years of political turmoil.
Hanafi estimated that around 7 million Egyptian pounds of
the subsidies bill was wasted yearly due to the smuggling.
He said in an interview published on Sunday by the official
Al Gomhuria newspaper that his ministry was in the first phase
of a fight against a subsidised flour-smuggling "mafia", without
giving further details.
Government officials have in the past said that the
government spends about $5.5 billion each year on food
subsidies. It was not immediately clear whether the change was
due to currency fluctations, a difference in policy or previous
estimates being wide of the mark of actual spending.
Egypt buys about 10 million tonnes of wheat abroad and
another 3.6-3.7 million tonnes from local farmers.
The wheat is used for its subsidised bread programme upon
which millions of poor Egyptian depends. The programme provides
loaves for less than 1 U.S. cent per loaf - a state-regulated
price unchanged since 1989 and equal today to a seventh of the
However, corruption in the wheat sector is big business for
profiteers. Bakers producing state-subsidised loaves siphon off
flour provided by the government and make a killing in the black
market. The government's flour is then baked into loaves sold at
private bakeries beyond the reach of the poor.
Bakers have long been able to cheat authorities because
consumption data is hard to come by.
Hanafi attended a meeting convened on Saturday by the new
interim prime minister, Ibrahim Mahlab, about the subsidised
bread programme. A statement posted on Mahlab's Facebook page
said Hanafi was working to modify the current system to "resolve
the crisis of a loaf of bread" and ensure that the loaves reach
those most in need.
The new minister has showed signs that he will continue
corruption probes, last week saying that he would soon review
the prices the government pays to the silos and storage company
to store wheat.
($1 = 6.9602 Egyptian Pounds)
(Reporting by Maggie Fick; Editing by Alison Williams)