Egypt's consumer cooperatives move toward privatization

Published October 5th, 2000 - 02:00 GMT

Egypt's Prime Minister Atef Ebeid has decided to transfer the Ministry of Trade's 3,500 consumer cooperatives to the Ministry of Public Enterprise. This means the companies, located all over Egypt, will be under the umbrella of the Holding Company for Food Industries.  


The consumer cooperatives include, Al Ahram Cooperatives, Al Nil, Alexandria Cooperative and The Egyptian Company for Marketing Fish. The decision was made after the companies made a total loss of EL250 million ($70 million) in Fiscal Year 1998/1999.  


Minister of Public Enterprise Mokhtar Khatab explained that the companies originally belonged to the Ministry of Public Enterprise. Since the cooperatives sell their products at a cost of 15 percent less than market prices, the prime minister decided to fund the cooperatives with EP1 million.  

Despite the government's decision to shift the cooperatives' ownership to the Ministry of Trade and Supplies, the companies have continued to suffer losses. The Ministry has flooded the cooperatives' shelves with subsidized sugar, flour and rice.  


The first quick fix the government decided on was to rent out the cooperatives to various companies, including Edge Market, which operated Al Nil cooperatives, renting the shelves and selling at low costs. The Minister of Trade and Supplies has accused Edge of embezzling money.  

According to some sources the sudden decision to transfer the cooperatives from one ministry to the other is a result of the Edge case. The Minister of Trade and Supplies proved to be incapable of keeping the books.  


Egyptian economists say changing ministries is a step for the cooperatives to undergo privatization. Especially when 212 companies have been renovated with Italian aid. However, the sell off may take some time, because money has to be allocated to pay for the workers' early retirement.  


The companies have 16,200 employees. Those going on retirement receive EL17,000 ($4000 dollars) to EL40,000 ($11,000 dollars), depending upon the number of working years. –(Albawaba-MEBG) 




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