FG Won’t Be Able To Repay Its Debt, Grow Economy If Fuel Subsidy Is Not Removed—Kyari

The Group Chief Executive Officer of the Nigeria National Petroleum Company Ltd, Mele Kyari has said that the Federal Government won’t be able to repay its debt or grow the economy if fuel subsidy is retained.

He made this revelation during a meeting with the National Chairman of the All Progressive Congress (APC), Abdullahi Adamu on Thursday alongside members of the National Working Committee (NWC) of the party to brief them on the removal of subsidy by the Federal Government.

According to KPMG’s first-quarter report in April 2023, Nigeria’s total public debt stock increased by 14.46 per cent between 2022 and 2023, to N46.25trn.

This excludes another estimated N27.55trn ‘Ways and Means’ loans from the Central Bank and additional debt envisaged in the 2023 annual budgets of States and the Federal Government.

However, Kyari who came to the meeting with a delegation of senior officials of the NNPC said the bond market appreciated within 24 hours after President Bola Tinubu announced that the subsidy has been removed.

He said, “The only way you can stop this is to stop this conversation around subsidy. When Mr President announced that the subsidy is gone, in 24 hours the bond market appreciated. It is nothing else other than the statement around subsidy and balancing of the apex market.

“These two elements are major concerns for every investor worldwide, every partner that we have is worried about what your apex regime is and how you deal with your subsidy. They know that this subsidy constitutes a huge amount of money and this country may not be able to survive and pay its debts.

“It is very clear that everybody understands this. Before today, the average subsidy level was N400bn every month.

“That means every month, you can do one major capital projects with money that you do not have. This is really what it means. There is nothing anybody can do about it. There is this common argument that the masses will suffer. That we are going to have problems with them, I agree. Once you increase prices of this proportion, as it has happened, it will have an impact on inflation. There is no doubt about it.

“It is very typical also, it goes up and down. The market determines what happens next. Even inflation in many countries goes up when the economic indices become difficult. It may not be subsidy. In many countries, there are very many factors that can make inflation go up. When it does, prices go up. We have to deal with it, live with it. You have to increase your production and consumption. And you have to change that balance. You have to change the conversation around the GDP growth and so on. And Mr President’s target is to have 7% growth of GDP.”

When asked when the four refineries will start working, he said there is an ongoing process of rehabilitation.

He added, “One of them will come this year, the second one will come on stream next year and then the third one will follow thereafter.”