Behind Closed Doors: Sisi’s Military Strategy to Defy IMF

Despite reports suggesting that Egypt's head of the regime Abdel Fattah el-Sisi has agreed to some conditions set by the International Monetary Fund (IMF), including scaling back the military's business empire—evidenced by his decision to halt contracts with four military and intelligence agencies unless personally approved by him—the hidden truth appears to be quite different.

Economic experts have warned that, in coordination with the military, el-Sisi is engaging in a form of sleight of hand to sidestep various political, economic, and international demands to reduce military involvement in the economy. 

This is being done by launching new civilian-front companies to manage the military's expanding projects.

El-Sisi's decision to assign the Air Force's "Mustaqbal Misr" (Egypt’s Future) with exclusive control over the country’s centralized wheat and grain procurement, replacing the state-run General Authority for Supply Commodities (GASC) which has managed this process since 1968, exposes this maneuver for what it is.

Launched under a civilian guise in 2022, the company began handling the importation of strategic goods under the unified procurement program, effectively serving as a new civilian-facing front for the military, while bypassing the military-owned companies that the IMF insists must be excluded from economic ventures.

Domestically, questions have arisen regarding whether military officers possess the expertise in importing wheat and oils that surpasses the decades of experience accumulated by the GASC, a body that has built its reputation over 60 years. Or, perhaps, the real answer lies in the profits at stake.

Wheat After Medicine

A senior official at Egypt's Ministry of Supply revealed to the independent platform al-Manassa on 28 November 2024 that the Future of Egypt has been tasked, by presidential decree, with overseeing the import of grains and other essential goods, replacing the role traditionally held by the "Supply Commodities Authority."

The official, who spoke on condition of anonymity for security reasons, explained that, under this new decision, some of the most critical responsibilities of the government’s Supply Commodities Authority will now be transferred to the "Unified Procurement Authority," represented by the Egypt Future. 

Under this arrangement, ministries and relevant agencies will specify their needs for grains and oils, which will then be assigned to the device for procurement.

A similar scenario unfolded previously with the establishment of the "Egyptian Unified Procurement Authority for Medical Supplies and Management of Medical Technology," headed by a military general and doctor, which now holds exclusive rights to import Egypt's pharmaceutical needs.

But this time, the difference lies in the fact that the Future of Egypt operates as a civilian entity or company, taking on this role to circumvent the IMF’s conditions. 

This contrasts with the previous arrangement, where the military-run bodies monopolized the import of pharmaceuticals and sidelined the Ministry of Health.

In November 2016, the then-Health Minister Ahmed Amad el-Din announced an unusual agreement with the Ministry of Defense, under which the military would handle all of Egypt's medical and pharmaceutical imports, including infant formula.

Through the Medical Services Department at the Ministry of Defense, part of the Armed Forces’ Supply and Provision Authority responsible for the military’s hospitals and medical centers, the military began overseeing Egypt’s pharmaceutical imports.

Later, in January 2017, Egypt's official gazette published a decision from Prime Minister Sherif Ismail, granting the military permission to establish its own pharmaceutical company, designed to appear as a civilian entity, thus replacing the Medical Services Department in the role.

The decision stated, "The National Organization for Military Production is authorized to participate in establishing a joint-stock company under the name of The Egyptian National Pharmaceutical Company."

On 25 August 2019, the head of the regime el-Sisi ratified Law No. 151 of 2019, establishing the Egyptian Unified Procurement, Supply, and Medical Supply Authority, headquartered in the new administrative capital.

This decision effectively granted official sanction to a single civilian-facing company, overseen by the military, to control Egypt's pharmaceutical procurement, a market valued at approximately 71 billion Egyptian pounds (around $1.4 billion).

Ironically, the decision to establish the Unified Procurement Authority for pharmaceuticals stipulates that it will replace the Ministry of Health and its minister, with all allocations from Egypt's state-run medical bodies being transferred to the new authority.

The head of the authority, who holds the rank of minister, is appointed by el-Sisi, along with the board of directors. 

The current head is General Bahaa El Din Zeidan, a military doctor.

Economic expert AbdelHafiz Elsawy stated that the military’s maneuvering to bypass IMF demands to reduce its economic influence is being carried out through new companies.

Elsawy explained to Al-Estiklal that the military operates through a network of state-owned companies, which manage its business dealings from the back door, such as through investment funds in the stock market, bank accounts, or shares in private companies.

He further emphasized that Egypt's business landscape has been heavily rearranged since 2013 (when el-Sisi came to power) to benefit these military and intelligence institutions.

The economic expert also pointed out that despite the IMF's pressure for the military to list its companies on the stock exchange—such as Wataniya and Safi Water—this has not happened, due to significant obstacles in valuing the assets of these companies for sale.

An Emirati Hand

In this context, the decision to grant the Future of Egypt a monopoly on wheat and oil procurement was met with resistance from international suppliers, who declined to submit any bids for the military's new company in its first tender, issued on 28 November 2024.

The suppliers cited a lack of familiarity with the new entity as their reason for withholding offers.

The Russian Grain Exporters Union stated, "We have not yet received any information through the official channels traditionally used for exchanging information of such importance," according to Reuters.

Russian Grain Exporters told Reuters they would not sell wheat to the Future of Egypt unless the Egyptian government officially notifies them that the device is operating on behalf of the state.

Founded in 2022 by presidential decree, the “Future of Egypt for Sustainable Development” has, within two years, managed to monopolize agricultural projects related to desert reclamation. 

Dozens of decisions were issued granting it control over thousands of acres.

It also succeeded in taking control of Lake Bardawil, Egypt's largest fishery, transferring its management to the device on 31 October 2024, before assuming responsibility for the unified procurement of wheat and oils.

The name of the “Future of Egypt” first emerged in May 2022 when el-Sisi inaugurated the “Future of Egypt for Sustainable Agriculture project”, located along the Rod el Farag-el Dabaa axis, about half an hour from October City. 

This marked the start of a project aimed at reclaiming 800,000 acres of land in the New Delta.

In 2022, a decree (No. 591) was issued by the head of the regime el-Sisi, though it was never published in the official gazette, but it was referenced in subsequent decisions. 

This decree established the Future of Egypt for Sustainable Development, a body under the direct supervision of the Egyptian Air Force.

Shortly after, the name of Bahaa El-Ghannam emerged as the Executive Director of the Future of Egypt for Sustainable Development Authority. 

A colonel in the Air Force, El-Ghannam played a key role in its development.

The Future of Egypt initially focused on land reclamation projects in the Western and Eastern deserts, both north and south of Egypt. 

The ‘Future of Egypt’s’ stated goal was to contribute to agricultural development, but it quickly expanded its role, operating as a public company despite its military ties.

When el-Sisi inaugurated the project, it was presented as a major initiative aimed at achieving self-sufficiency and exporting surplus agricultural produce through the reclamation of 1.5 million acres of land in the New Delta. 

It was at this point that it officially adopted the name of the “Future of Egypt for Sustainable Development” and its remit expanded across several sectors, including overseeing Lake Bardawil, previously managed by the Fish Wealth Development Authority, and even launching a tender for wheat procurement.

Ironically, the UAE has begun investing in the ‘Future of Egypt.’

On November 20, 2024, the Future of Egypt signed two memoranda of understanding with the UAE’s Abu Dhabi Future Energy Company (Masdar), aimed at collaborating on the development of a 5-gigawatt floating solar power project at Lake Nasser.

The agreements also included a project to develop a 2.8-gigawatt solar power plant in Nagaa Hammadi.

The memoranda of understanding included plans for a floating solar power project at Lake Nasser, with an initial capacity of 2 gigawatts, expanding to 3 gigawatts in a second phase. 

Additionally, there is a proposal for a 2.8-gigawatt solar power plant in the northern region of Nagaa Hammadi.

Between April and September 2024 alone, five decisions were issued to allocate land for the Future of Egypt.

Direct Orders

Given its opaque nature, lacking a public budget or clearly defined mandate, Sisi's decree to hand over wheat and oil procurement deals to the Future of Egypt for Sustainable Development—allowing it to carry out direct deals rather than competitive tenders—has sparked controversy.

Due to this ambiguity, the entity was forced to cancel its first direct purchase tender, announced on 28 November 2024, its first major activity after monopolizing the sector, as no international companies or organizations submitted bids.

On November 28, 2024, the Future of Egypt for Sustainable Development issued a statement announcing its intention to procure wheat and vegetable oils through direct purchase deals.

The announcement raised eyebrows, as the GASC, which previously handled these matters, operated under a system of tenders or competitive bidding, while the new entity, the Future of Egypt, has shifted to a system of direct orders.

This pivot in procurement strategy, introduced by the military-backed company, away from the tender system used by the GASC—the government’s primary bulk purchaser—has raised concerns over potential corruption.

This shift mirrors a similar change in 2021, when laws governing land sales to major construction companies were altered from tenders to direct orders, seemingly to benefit businessman Hisham Talaat Moustafa. 

Once entangled in business dealings with the sons of former president Hosni Mubarak, Moustafa shifted to cultivating ties with close allies of the Sisi regime.

Vast tracts of land were allocated to major real estate developers for investment purposes, with the largest deals going to Talaat Moustafa Group and Palm Hills.

These deals followed a 2019 Cabinet decision (Decree No. 25) that changed the land allocation law, replacing the 1998 tender and auction system (Law 89) with a direct allocation system.

These contracts, based on the direct allocation law, highlight a lack of equitable land distribution. Human rights lawyer Khaled Ali described them in an interview with ARIJ on January 27, 2024, as “lack of transparency and unfair distribution of land, and Hisham Talaat Moustafa has turned out to be the biggest beneficiary of these changes.”

When Egypt's Future began issuing direct orders to purchase wheat, one trader told Reuters that the new agency had sidelined the GASC, but lacked its decades-long experience and established market relationships.

The trader pointed out that the state authority had nearly 56 years of expertise in the sector, and the sudden emergence of Egypt’s Future in its place raised confusion, especially after the switch to direct purchase orders.

Hesham Soliman, the director of Mediterranean Star Trading and Grain Importing, told Middle East Monitor that the Russian Grain Exporters Union had objected to the sudden decision and refused to participate in any wheat deals through the Future of Egypt.

He attributed this to a lack of sufficient information about the agency and its financial status, adding that they would only engage once they received the necessary details to feel confident in dealing with it.

Suleiman explained that the main reason for transferring this critical responsibility from the GASC to the Future of Egypt was the authority’s refusal to proceed with several wheat import deals due to price disagreements, including a key 3.8 million-ton deal in August 2024.

Deception and Evasion

In August, the GASC, the government’s grain buyer, was forced to settle for just 280,000 tons of wheat in an international tender, despite initially aiming to import 3.8 million tons—only 8% of its target—due to soaring prices.

This prompted Egypt’s Future to bypass the tendering process entirely and request a direct purchase order for 60,000 tons of wheat from multiple international companies and agencies.

The term direct purchase, justified under the guise of "emergency circumstances," allows for higher prices, whereas the GASC typically seeks the lowest price through open bidding. 

Previously, the authority had cancelled tenders when no competitive price was found.

This led Mourad Aly, CEO of a group of investment companies, to question "What potential profits could the military gain from these operations, especially given that their value runs into the hundreds of billions of pounds? Will the buying and selling processes be subject to any form of oversight, or will they remain shielded by the usual financial secrecy surrounding military activities?"

“What are the real motives behind this decision, which contradicts Sisi’s commitments to the IMF to scale back military involvement in the economy?”Aly wrote on X. 

“Doesn’t this move divert the army from its core mission and distract its officers at a time when Egypt is facing unprecedented tensions along its borders with Gaza, Sudan, and Libya, in addition to the complexities unfolding in Syria and Lebanon?”

Journalist Ali Bakry stated that the transfer of wheat, grain, and oil imports from the GASC to the military is aimed at profiteering off the imports of everyday Egyptians, whether it be wheat or medical supplies.

“The military has been acting as a middleman for the country’s needs for a long time,” Bakry added. 

“This isn’t a new practice—it has been happening for years through the Engineering Authority of the Armed Forces and its projects, which are awarded directly and then subcontracted out to other contractors, with the military taking a cut of the deal."

Egypt is classified as one of the world’s largest wheat importers, and during the 2024/2025 season, imports of wheat and corn are expected to rise by between 1% and 3%, reaching 12.5 million tons and 8.2 million tons respectively, according to S&P Global on 28 November 2024.

Egyptian economic sources argue that the expansion of the military’s new company, along with other entities that have emerged as civilian fronts for the military, is part of a strategy to circumvent and deceive the International Monetary Fund, which has repeatedly called for a reduction in the military’s business activities.