What Is the Story Behind the ‘Agricultural Scandal’ Between the UAE and the Sisi Regime?

On July 20, 2023, the Egyptian Minister of Supply and Internal Trade, Ali el-Sayed Ali al-Moselhi, announced his intention to sign an agreement with the Abu Dhabi Fund for Development to secure a loan of $400 million in four installments, each worth $100 million, to finance Egypt’s wheat purchases.

The first installment of $100 million will be used to fund Egypt’s purchase of grains from the Emirati company Al-Dahra for agricultural projects, based in Abu Dhabi, as reported by Bloomberg.

Interestingly, the UAE government fund also reached an agreement with the government-owned Al-Dahra company, which cultivates grains and fodder in several areas in Egypt. As per the agreement, the company will supply wheat grown in its own lands in the Toshka region (south) to Egypt. This land deal was made during the era of former President Hosni Mubarak and stirred significant legal controversies at that time due to the nominal prices involved.

In essence, the UAE, in a manner similar to U.S. aid, will pay $100 million to Egypt on the condition that it is used to buy wheat from the Emirati company operating within Egypt, thereby effectively selling the wheat produced on Egyptian soil back to the Egyptians.

Similarly to how the United States requires Egypt to use its annual military aid to purchase weapons from American companies, Washington indirectly pays its aid to its domestic arms manufacturers.

The agreement between the Ministry of Supply and the Abu Dhabi Fund for Development, as well as Al-Dahra company, comes at a time when Egypt is facing pressure in securing the necessary grains.

Global wheat prices have risen by about 9% due to Russia’s withdrawal from the Ukrainian grain export agreement.

On July 19, 2023, wheat prices on the European exchange surged by 8.2%, reaching 253.75 euros per ton.

The value of U.S. wheat futures also jumped by 8.5% on the same day, marking the highest one-day increase since the Russian invasion of Ukraine.

The Egyptian government annually requires nine million tons of wheat to meet the needs of the subsidized bread system.

 

The Acre at 50 Egyptian Pounds

Al-Dahra is an Emirati-owned company by Sheikh Hamdan bin Zayed Al Nahyan, specializing in agricultural cultivation and production of fodder, supplying it to the UAE’s food security authority.

The company holds 116,000 acres of land in Egypt, distributed between Toshka, Sharq el-Owainat, Salheya, and Nubariya, with reports suggesting it has a total of 400,000 acres of agricultural land in Egypt.

This information was announced after a meeting between Rania al-Mashat, Minister of International Cooperation, and Khadim al-Darei, the Emirati businessman and Vice Chairman of the Board of Directors of Al-Dahra Company, to enhance Emirati investments in Egypt.

The Al-Dahra project is solely located in Toshka, spanning 37,400 acres. Al-Ain newspaper, on October 31, 2022, disclosed that the company is expanding in Egypt, focusing on agricultural cultivation and fodder and grain production.

The company manages around 35 warehouses in various locations with a storage capacity of approximately 210,000 metric tons of fodder in several branches, including Al-Dahra Egypt and Al-Dahra Saudi International, among others in different countries.

On February 26, 2023, Amwal al-Ghad newspaper confirmed that the Emirati company launched a new project for strategic crops in Egypt, with investments of 500 million dollars.

Al-Dahra operates in over 20 countries, meeting the needs of more than 45 markets globally, and employs around 5,000 people.

However, in 2011, the Egyptian Center for Economic and Social Rights filed a lawsuit against the Emirati company seeking an annulment of the contract covering 100,000 acres in Toshka.

The lawsuit argued that the contract with the Emirati company was a waste of public funds and sold the land below its true value.

The lawsuit further claimed that during Hosni Mubarak’s era, the Egyptian government sold the acre for 50 Egyptian pounds to the Emirati company, while its average price at that time was 11,000 Egyptian pounds.

The center demanded the contract’s concealment and the return of the land to state ownership for resale at its real value, as per the law.

Although the State Council declared the contract null and void at the time, the Public Prosecution did not complete the investigation, and the case was closed without judgment!

 

Major Corruption!

Economic expert Abdelhafez el-Sawi points out that behind this Emirati project (Al-Dahra), there seems to be significant corruption, driven by narrow personal interests of the rulers rather than Egypt’s overall interests.

He explains to Al-Estiklal that Egypt not only suffers from corruption but also lacks a strategy for attracting foreign direct investment, which would allow Egypt to benefit and have a share in the production of investment projects, such as having a share in the wheat produced by the Emirati company.

El-Sawi emphasizes that decisions on such projects were made by systems far from Egypt’s needs for this production on its lands and benefiting from foreign investment, whether in goods, services, or labor.

Both Al-Dahra and Jenaan are the largest Emirati agricultural companies investing abroad, with massive investments amounting to around 15 billion dirhams (4 billion dollars). The products of these two companies vary from grains to fruits and fodder.

The Emirati agricultural investments abroad aim to implement the UAE’s food security strategy based on two pillars: First, ensuring self-sufficiency and sustaining the supply of essential commodities, and second, making the UAE the main center for re-exporting basic commodities to regional countries.

In response to the situation, activists condemn the Emirati company for planting wheat on Egyptian land and using its water at low prices. They criticize Sisi for borrowing millions of dollars from the UAE to purchase the wheat it produces, considering it a peak of military cunning.

According to individuals familiar with the Emirati wheat deal, as reported by Reuters on July 21, 2023, the loan will be facilitated through the Export Office in Abu Dhabi with the Abu Dhabi Development Fund, which owns Al-Dahra company. This indicates that the UAE is essentially selling to itself!

It was notable that some Saudis commented on the news of Egypt buying wheat grown by the UAE in Toshka, suggesting corruption and looting, as the loan was handed from Emirati hands to Emirati hands.

 

Severe Crisis

On May 25, 2023, it was revealed by Reuters that the Egyptian General Authority for Supply Commodities, the grain buyer in the country, had postponed payments for its wheat purchases due to a severe currency crisis in Egypt.

Official figures indicate that 80% of Egypt’s wheat imports in 2021 came from Russia and Ukraine combined.

During that year, Egypt imported around 4.2 million tons of wheat from Russia, with a value of about 1.2 billion dollars, accounting for 69.4% of its total wheat imports.

Ukraine followed in second place, with Egypt purchasing over 650,000 tons of wheat from Ukraine in 2021, with a value of around 650 million dollars.

Recently, several wheat purchases have been made through loans from the International Islamic Trade Finance Corporation (ITFC), which doubled its credit facilities to Egypt in 2022 to 6 billion dollars.

The World Bank funded several wheat-supply deals in 2023 for Egypt, as the country annually imports millions of tons of wheat from abroad, making it one of the world’s largest wheat importers.

The news of Russia’s withdrawal from the grain export agreement through Black Sea ports in recent days, along with the imposition of an export tax, severely impacted Egypt.

Consequently, the Egyptian Minister of Supply and Internal Trade, Ali al-Moselhi, criticized Russia’s decision as unfortunate news that will negatively affect weak countries, implicitly referring to Egypt as well.

Supporters of the agreement argue that its main benefit was lowering food prices, especially in the world’s poorest regions, where prices decreased by over 23% since March 2022.

Interestingly, Ethiopia has also become an exporter of wheat to Egypt. According to the Food and Agriculture Organization (FAO) of the United Nations, in March 2023, Ethiopia ranked last in terms of wheat exports to Egypt.

In an international conference, the Ethiopian Minister of Planning and Development, Fitsum Assefa, announced that Ethiopia has become a wheat-exporting country in 2023.

Abu Dhabi is seeking to sign an agreement with the Ethiopian government that grants it the right to obtain agricultural land for a massive agricultural project on the Sudanese–Ethiopian border involving the cultivation of thousands of acres.

The Emirati project is expected to benefit from the gains that Ethiopia will achieve through the operation of the Grand Ethiopian Renaissance Dam (GERD) on fertile land with abundant water resources.

This will secure Abu Dhabi’s food security and enable it to export to countries worldwide, which conflicts with Egypt’s national security interests.

An Egyptian economic expert, speaking to Al-Estiklal, suggests that these Emirati gains are the driving force behind their mediation efforts between Egypt and Ethiopia in the file of the Renaissance Dam, as the final results will favor their agricultural and industrial projects in Ethiopia.

Dr. Sayed Ghoneim, the head of the Institute for Global Security and Defense Affairs (IGSDA), explains that the UAE currently owns around 100 investment projects in Ethiopia in various sectors, such as agriculture, industry, real estate, health, mining, and others.

According to a research published by the institute on June 12, 2021, this is what always drives the UAE to prevent and put an end to any civil wars or disturbances in Ethiopia.