CAIRO — Amid fierce criticism from parliamentarians and the media, Egyptian Minister of Supply Khaled Hanafy announced his resignation in a press conference Aug. 25. His departure comes following accusations of corruption regarding wheat supply and of wasting public funds, estimated by the public prosecution at more than 500 million Egyptian pounds ($56.3 million). Financial subsidies provided to Egyptian wheat-producing farmers were allegedly stolen and low-price wheat was supplied instead of Egyptian wheat, in addition to allegations that quantities of wheat were falsely reported as being supplied.
In this regard, the fact-finding commission investigating corruption in Egypt’s wheat supply submitted its final report to parliament Aug. 25 and accused Hanafy both politically and legally of corruption and manipulation of the wheat system. The wheat deficit reached 559.7 million Egyptian pounds based on the commission’s field visits to silos. Accordingly, the commission, which began its work July 2, decided to refer the entire report to the public prosecutor and the Illicit Gains Authority for investigation.
Egyptian Attorney General Nabil Sadek said in a statement Aug. 7 that investigations into the wheat corruption case resulted in “the emergence of new facts whereby some [wheat silo owners] forged documents in the names of farmers and owners of agricultural lands proving the cultivation of those lands with wheat and the supply of crops — which was not true.”
He added that the 13 detained people who were accused of corruption “managed to seize funds estimated at more than $55 million under the pretext that this was the value of the local wheat that was supplied.”
Hanafy commented on the fact-finding commission’s report in an Aug. 24 interview with Youm 7, saying, “The points mentioned [in the report] conveyed nothing new. The final report included seven issues related to legal aspects of accountability, and no point condemned the minister of supply.”
Also, Mustafa Bakri, a member of parliament and of the legislature's Egypt Support Coalition, which supports Egyptian President Abdel Fattah al-Sisi, accused the resigned minister of staying in a five-star hotel in Cairo since officially appointed in February 2014. This stay cost 7 million Egyptian pounds (about $800,000). Bakri asked how Hanafy managed to justify this cost at a time when the government was suffering from a severe economic crisis that forced it to set up a program of economic reform and resort to the International Monetary Fund for a loan of $12 billion over 3 years.
Hanafy, who lived in Alexandria before being appointed as minister, said that he was staying at a hotel in Cairo but that the total cost of his stay amounted to 500,000 Egyptian pounds ($56,000), which he paid from his own funds, not from public monies.
Following a lengthy Cabinet meeting, the minister of supply announced his resignation in a press conference and said, “Accordingly, and given that a large part of the raised issues are overstated personal issues — and I have all the supporting evidence — I announce my resignation with all honesty and content so that the state could choose someone to continue the journey of giving and reform that our political leadership called for with courage and bravery.”
Member of parliament Yasser Omar, the head of the Planning and Budget Committee and a member of the fact-finding commission, described Hanafy's resignation as “sound” because he did not want to cause any embarrassment to the government. He said that Hanafy is politically responsible for the corruption, and thus paid the price.
Omar told Al-Monitor that the government advised Hanafy to resign. Had Hanafy not resigned, Omar said, there would have been a tendency in the parliament to withdraw confidence from him given the inquiries directed at him.
Asked about the fate of these inquiries, Omar said, “They were automatically dropped given Hanafy’s resignation." He added, "On Aug. 29, we [parliament] voted on the report and legislators agreed to send it — with all accompanying documents and attachments — to the public prosecutor and the illicit gains authority [to investigate the violations therein]."
Following the revolution of June 30, 2013, Egypt had also witnessed a resignation based on allegations of corruption and the squandering of public money. The Ministry of Agriculture’s corruption caused the downfall of Ibrahim Mehleb’s government after the National Security and Management Control arrested former Agriculture Minister Salah al-Hilal in Tahrir Square after he had submitted a written resignation to the government.
It should be noted that Hanafy was seemingly forced to submit his resignation, as he wrote his resignation letter by hand during the Cabinet meeting and that wording in the letter had been crossed out. Also, days before his leaving the ministry, following his participation at a meeting of the parliament's Committee on Agriculture and Irrigation to discuss the price of rice crops, Hanafy had said his resignation from the ministry “is not whatsoever on the table.”
Sisi said in a speech during the May 12 inauguration of a national project, “Egypt should be a state of institutions where the law is applied to everyone. No one is above the law and whoever violates the law will be held accountable.”
Member of parliament Magdi Malak, the head of the fact-finding commission, told Al-Monitor, “Regardless of whether it is a resignation by choice or a firing, what is important is that the minister of supply is no longer in office, and this is a move that reflects the executive branch’s political will to hold to account whomever is found to be involved in cases of corruption affecting our ailing economy.”
“We have to turn the page of the minister of supply. The ministry contains sectors that provide services to the Egyptian citizens, and we ought to evaluate these services,” Malak added.
He said, “Wheat supply has been marred by corruption for several years now, and we have a plan regarding the reform of the system pending the parliament and the government’s approval to apply the plan starting next season.”
Regarding the fight against corruption in Egypt, Negad El-Borai, the head of the United Group Consulting Law Firm and a rights activist, said that the state seems to be fighting corruption with no clear strategy. He told Al-Monitor that the parliament is unable to pass any legislation aimed at combating corruption.
“The anti-corruption conditions do not go in line with the January 25 and June 30 revolutions, and the situation has been degenerating since 2005,” he added.
Tarek Fahmy, a political science professor at Cairo University, said Hanafy's resignation triggered a crisis in the government in terms of the nature of its work and the mechanisms it follows in the selection of ministers. He expected Hanafy not to be hastily replaced and added, “The last reshuffle of Sherif Ismail’s government took place in March, which is not so long ago, and 10 ministers were replaced back then. Thus, it is imperative that the government finds good alternatives, especially since the names will be presented to the parliament.”
Fahmy told Al-Monitor that government spokesman Hossam El-Kawish’s ruling out of a Cabinet reshuffle anytime soon is just a guess, and he expected “surprises” in this regard, especially considering Egypt's adoption of an economic reform program.
“No Cabinet reshuffle will take place, but a new prime minister and a new lineup are likely to emerge in the coming period, especially since the next Cabinet will determine whether or not President Sisi will be serving another term. Therefore, this government ought to submit a plan of action capable of overcoming this crucial stage in this country,” he said.
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