Corruption, multiple arrests taint Supply Ministry affordable goods distribution

Several individuals were arrested within the state-owned Sun Nile company last week, part of an ongoing crackdown on corruption within the government food supply system.

Basic household goods, including rice, sugar and oil have been absent from shelves at government-run stores across the country over the course of this year.

Part of the problem is inflation, which has hampered trade across the country and made worse by the falling value of the Egyptian pound.

But corrupt supply practices have made it still more difficult for many to put food on the table. The Supply Ministry — the main government body responsible for making affordable basic food items and household goods available to the public — has come under fire for its management of the crisis, and over recent months, a legal crackdown on embezzlement and profiteering has targeted officials including an advisor to the minister.

“Merchants became aware of the corruption crisis at the beginning of this year when storekeepers at Supply Ministry-affiliated outlets repeatedly refused to disburse basic food commodities such as sugar, rice and oil, which represent 80 percent of the goods they’re meant to get,” a trade syndicate source told Mada Masr earlier this year.

A representative of the Supply Ministry’s initiative, Gameaty, at the state-owned Sun Nile Company, was detained on Wednesday for forging paperwork and trade permits along with several accountants and the financial managing director, said the ministry.

The Supply Ministry launched Gameaty to support the opening and staffing of stores nationwide stocking its commodities, particularly those outside urban centers. The initiative has sponsored the establishment of over 8,000 stores so far.

"The ministry decides, on the basis of population density, how many goods should be distributed to a particular area,” a Supply Ministry source told Mada Masr in June on condition of anonymity. “Warehouses receive goods from the ministry, which are then delivered to a Supply Ministry-affiliated outlet, where those with supply cards can buy them."

Around 64 million people in Egypt currently eat food purchased via Supply Ministry cards, which entitle the holder to buy items at subsidized prices from Supply Ministry-affiliated stores.

But it’s not always guaranteed that households will have access to the subsidized goods. Mada Masr was informed in June by the owner of a Gameaty project in Sharqiya Governorate who spoke on condition of anonymity that food commodity owners, such as the General Company for Wholesale Trade, sometimes sell the goods they are allocated by the Supply Ministry informally, preventing them from reaching distribution warehouses.

Many subsidized food traders are also forced to pay bribes to get their monthly allocation of goods along with a “compulsory tip”, around LE250, in order for the goods to be transported from the warehouses to the outlet.

“The value of the bribe sometimes increases if goods are missing from the warehouse. In the end, I am forced to sell part of the share outside the supply system in order to compensate for what I lose," the source said.

Multiple instances of similar types of supply chain corruption were reported in recent weeks. In December, the Administrative Control Authority, which is responsible for monitoring instances of malpractice in government-affiliated bodies and apprehending perpetrators, said it had discovered a factory selling around 900 tons of sugar from the Supply Ministry at a markup for profit.

In a different governorate, it added that some mill owners were apprehended for collaborating with officials from the Supply Ministry to sell government subsidized flour for profit.