Egyptian Minister of Supply Khaled Hanafi resigns over corruption allegations

Egypt's Minister of Supply Khaled Hanafi attends the Egypt Economic Development Conference (EEDC) in Sharm el-Sheikh, in South Sinai province, south of Cairo, Egypt, March 14, 2015. © Reuters

Egyptian Minister of Supply Khaled Hanafi has resigned over his implication in a scandal related to fraudulent wheat subsides payments.

"I announce leaving my post so that the state can choose who will bear and continue this path of giving" wheat payments, Hanafi said on state television on Thursday.

Hanafi’s resignation coincided with reports that the Egyptian presidency has decided to replace six other ministers.

The shakeup of the Egyptian government comes in the wake of a corruption probe into whether millions of dollars intended for subsidies farmers were used to purchase wheat that did not exist.

Egypt, the world's largest importer of wheat, has been mired in controversy over whether much of the roughly five million tonnes of grain the government said it had procured in this year's harvest exists only on paper.

If local wheat procurement figures were misrepresented, Egypt may have to spend more on foreign wheat purchases to meet local demand.

Egypt's supply ministry is in charge of a massive food subsidy program and the main state grain buyer, the General Authority for Supply Commodities (GASC).

Parliamentarians who formed a fact-finding commission to investigate the fraud have said upwards of 2 million tonnes, or 40 percent of the locally-procured crop, may be missing.

The general prosecutor has ordered arrests, travel bans, and asset freezes for several private silo owners and others allegedly involved in the scandal.

While Hanafi has not been accused of directly profiting from misallocated subsidies, parliamentarians, industry officials, and media commentators have in recent weeks blamed him for the crisis.

The prospect of hundreds of millions of dollars in squandered government subsidies comes as Egypt gears up for a raft of austerity measures, including various subsidy cuts.