In an interview with Daily News Egypt, Minister of Supply Khaled Hanafy spoke on the development of the subsidy system and the ministry’s recent projects.
What are the developments in the Global Logistics Centre for Grain project?
The ministry has completed the project from the technical side, and from the negotiations with investors side, who welcome the project and who are ready to participate. The project is now ready and in the process of issuing a presidential decree and so on. Most investors who have expressed their interest are Arabs and foreign investors, including 15-16 investors who expressed their desire to participate in this project.
What is new regarding the commercial register development project, which debuted at March’s Economic Summit?
The ministry submitted the project to the public private partnership (PPP) unit, and has been further submitted to the cabinet, which approved it. The preparation of the tender’s terms is being undertaken in coordination with the Ministry of Communications and Information Technology. The project will be launched soon to start implementation at a cost of EGP 1.188bn.
Will the government reconsider the Food Industries Holding Company’s (FIHC) listing on the Egyptian Stock Exchange (EGX)?
There is no listing of the holding company on the EGX, but what will be listed on the EGX is the increase of the company’s capital and the development of an investment plan. The capital increase will be issued depending on the EGX, not issuing shares. This will be done through financial, marketing and legal studies by global investment banks ,such as PWC Corporate Finance and Beltone Financial, which will be the main consultants in the preparation of the studies. The studies will take time to complete, and once finished, we will issue the capital increase on the EGX.
What is the update regarding the national project to build 60 grain storage silos?
The project will be completed by January 2016, and will be delivered at this time. In addition to this, the completion of modern barns for grain storage will be completed in the mentioned period. We have 25 silos built using a UAE grant, 25 silos using Saudi finance, and another 10 horizontal silos using Italian finance, so we have a total of 50 vertical silos and 10 horizontal silos. The UAE-financed silos have a capacity of 50,000 tonnes, with the Saudi silos have a capacity of 30,000 tonnes, and we will receive all of them in January next year.
The ministry achieved great success in reforming the supply commodities subsidies system. What will the ministry’s complementary steps be in the coming period ?
The ministry addressed the constraints of the supply commodities system and succeeded in managing the issue. Now Egypt has no bread crisis. We have developed the commodities supply system to the extent that the World Bank is, for the first time, documenting Egypt’s success story for publishing in international literature. Moreover, we saved EGP 6bn of bread. People can make use of this amount, in the form of points to purchase other commodities that they need more.
The next stage to which the ministry is moving is in achieving better equality regarding distribution of subsidies, as we want to achieve justice, as the imbalanced distribution that existed previously in Egypt still remains. However, we are targeting higher allocations for the needy, and that will happen by taking a stronger stance on citizens’ ration cards, which are frequently duplicated or not updated. The ministry is very interested in this step, which will be completed very soon.
What is happening with Egypt’s wheat imports. Is there a variation in import rates?
We enough for domestic use. The ministry is diversifying wheat imports, which are lower than previous years. For the first time in Egypt’s history, we have provided wheat imports of approximately 1.8m tonnes, a decrease rate of 40% of our imports. The ministry buys wheat from its source without resorting to intermediaries or the wheat import mafia, who were supplying wheat to Egypt, which happened in the last period, with the ministry instead becoming the wheat buyer itself.The processes of purchasing decisions are based on reading global markets and stock exchanges.
When will we reach self-sufficiency in wheat production?
This is not the jurisdiction of the Ministry of Supply; we are not the Ministry of Production, but a ministry for the distribution of existing resources. We provided a proposal, in coordination with the Ministry of Agriculture, to encourage production processes across Egypt, by changing the style of wheat farming, and this proposal is currently being studied.
Egypt’s Durum Wheat can be exported, although this has not happened yet. Therefore, we asked the Ministries of Agriculture and Industry to present specifications for Egyptian wheat, for the first time, because the wheat is not one type. Durum wheat is grown in Upper Egypt, and is used in the finest types of bread and pastries.
There is meant to be a clear plan for agriculture, encouraging the cultivation of such species of wheat, as the price of 1 tonne of this type of wheat equals nearly 2 tonnes of other types of wheat. Exporting 1 tonne of Durum wheat also equals the importing of 2 tonnes of other types of wheat, without increasing the cultivated lands for the crop.
What is your take on the Egyptian market’s meat supply problem?
This is the jurisdiction of the Ministry of Agriculture, and the Ministry of Supply deals with the issue well. The ministry has contracted larger quantities this year, more than in previous years, with meat already distributed to outlets as the demand for meat increases as Eid Al-Adha draws closer. In the last period, we have contracted for approximately 105,000 heads of cattle, which will make up a very large amount of Egyptians’ meat consumption. This is the first time the ministry has intervened in this issue.
When will the Consumer Protection law be issued?
The ministry has completed the law, and it is now in the legislative committee. However, there are some procedures that still need to be taken before issuing laws. I have no idea about the issuance date or time.
When will the distribution of liquid petroleum gas (LPG) cylinders on ration cards occur?
This step is being undertaken in coordination with the Ministry of Petroleum, and we are waiting for its response, as it is a major party and is responsible for buying, producing and distributing LPG. The Ministry of Supply has proposed the distribution of LPG through ration cards, as was used with the bread subsidy system.
When will the project to recycle waste oil for the production of fuel be launched?
Testing for the project has been completed, and it will be formally and finally launched very soon.
What are the ministry’s actions to encourage internal trade?
The ministry is working on encouraging chains of internal trade through a direct relationship with them, as one of the main roles of the Internal Trade Development Authority (ITDA) is encouraging investment in internal trade. We succeeded with in creating 10 branches of Carrefour, and 16 Panda branches in new cities, amongst others. The ministry is working on developing companies under the FIHC. Some of these companies have achieved a surge in sales estimated at three or four times , which did not occur before. In addition, consumer companies achieved a breakthrough of 300%-400% of their sales, which also had never happened.