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BOJ May Add to Stimulus at March Meeting, Abe Adviser Says

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Haruhiko Kuroda

The Bank of Japan should act preemptively to change the deflationary mindset in Japan and this action could come as soon as March, said Etsuro Honda, an adviser to Prime Minister Shinzo Abe.

“It’s possible that extra stimulus could come as soon as March,” Honda, 61, said in an interview in Tokyo on Tuesday. “It’s vital for the BOJ to preemptively work to change people’s minds after considering various economic indicators — not just sit back and follow events.”

Honda’s comments were made at a time of increasing focus on the BOJ’s next policy meeting on March 14-15, with Barclays Plc and JPMorgan Chase & Co. recently saying that they see an increasing chance for further stimulus then. While the introduction of a negative rate policy last month has driven down interest rates and yields, its impact on markets has been muted, with the yen strengthening and stocks down.

Recommends Delaying Tax

Japan went into recession after the last sales tax increase in 2014. Considering that, the next hike in the levy should be postponed by two years to April 2019, Honda said. “Announcing that there would be no tax increase until prices and employment have stabilized would have a large positive effect” on household sentiment, he said.

“Currently, the BOJ says it will reach the 2 percent price target in the six months from April 2017, which is when the sales tax will be increased. And that levy rise would cause inflation to drop again,” Honda said. “If that happened, there’s a chance of people losing trust in Abenomics.”

Honda acknowledged that the tax can’t continually be postponed, as it has already been pushed back once to the April 2017 date. “But, I don’t want us to make the same mistakes as before,” so raising it in 2019 is the best scenario in the current situation, he said.

More Stimulus

Honda called for an extra budget of about five trillion yen ($44 billion), saying that measures are “strongly needed” to stimulate an economy that contracted in the last quarter of 2015.

“It would be best if we could have an extra budget, but there is no time in the parliamentary schedule,” he said. “We have to announce something big, to show the government’s resolve.”

Japan passed an extra budget last month for the rest of this fiscal year, which lasts until the end of March. Parliament is currently considering the budget for the next year, which will be a record 96.7 trillion yen.

Bloomberg

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Nigeria’s Real Estate Sector Shrinks by 8.06% in the Third Quarter -NBS

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Economic uncertainty plunged Nigeria’s real estate sector by 8.06 percent in the third quarter of the year, according to the National Bureau of Statistics (NBS).

Nigeria’s statistics office said “In nominal terms, real estate services recorded a growth rate of –8.06 per cent in the third quarter of 2020, indicating a decline of –11.78 per cent points compared to the growth rate at the same period in 2019, and by 9.12 per cent points when compared to the preceding quarter.

“Quarter-on-quarter, the sector growth rate was 18.92 per cent.

“Real GDP growth recorded in the sector in Q3 2020 stood at -13.40 per cent, lower than the growth recorded in third quarter of 2019 by –11.09 per cent points, but higher relative to Q2 2020 by 8.59 per cent points.

“Quarter-on-quarter, the sector grew by 17.15 per cent in the third quarter of 2020.

“It contributed 5.58 per cent to real GDP in Q3, 2020, lower than the 6.21 per cent it recorded in the corresponding quarter of 2019.”

Nigeria’s economy contracted by 2.48 percent in the first nine months following a 6.10 percent and 3.62 percent contraction in the second and third quarters respectively.

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Economy

Nigeria Requires N400 Billion Annually to Maintain Federal Roads -Senator Bassey

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lekki

The Chairman of the Senate Committee on road maintenance, Senator Gersome Bassey, on Friday said Nigeria requires about N400 billion annually to maintain federal roads across the country.

The Senator, therefore, described the N38 billion budgeted for road repairs in the 2021 proposed Budget as grossly inadequate. According to him, nothing meaningful could be achieved by the Federal Roads Maintenance Agency (FERMA) with such an amount.

He said, “For the 35 kilometres federal roads in the country to be motorable at all times, the sum of N400bn is required on yearly basis for maintenance.”

Bassey “What the committee submitted to the Appropriation Committee in the 2021 fiscal year is the N38bn proposed for it by the executive which cannot cover up to one quarter of the entire length of deplorable roads in the country.

“Unfortunately, despite having the power of appropriation, we cannot as a committee jerk up the sum since we are not in a position to carry out the estimation of work to be done on each of the specific portion of the road.

“Doing that without proposals to that effect from the executive, may lead to project insertion or padding as often alleged in the media.”

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Economy

Scarcity of Day-Old-Chicks Cripple Poultry Farmers in Akwa Ibom

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Despite billions of Naira spent on Akwa Prime Hatchery and Poultry Limited by the Executive Governor of Akwa Ibom State, Udom Emmanuel, poultry farmers in the state said they had to order day-old-chicks from outside the state as the 200,000 capacity poultry farm developed specifically to make day-old-chicks and other poultry products available at affordable prices is almost empty at the moment.

The farmers expressed frustration over many challenges they face in the course of bringing day-old-chicks from outside the state. Usually, Ibadan, Enugu and sometimes as far as Kaduna, while the hatchery built and inaugurated in 2016 remains idle.

Mr Ekot Akpan, one of the poultry farmers who spoke with the pressmen said the state had not had it this bad.

Akpan said: “For the 12 years that I have been in poultry farming, this is the first time that poultry farmers have been so harshly affected by both economic and non-economic factors. And, quite unfortunately, nobody is available to offer any explanation.

“Farmers have been left at the whims and caprice of owners of the means of production.

“There seems to be no government regulation of the poultry industry. How, do you explain a situation where you wake up suddenly and the price of a day old chick is selling for N600, a bag of feed goes as high as N6,000.

“And, in a state that government claims to be pursuing agriculture as one of his cardinal programmes.

“For instance, in 2016, the state government said it has constructed an hatchery, and the intention according the government was to ensure availability of day old chicks at affordable price to farmers, but, quite, unfortunately, that effort has not yielded any tangible result.

“Farmers are still getting their day old chicks from Ibadan, Kaduna, and Enugu. So, the question now is where is the hatchery?

“One would have expected that farmers would be buying old chicks at humane prices, but, from all indications they acclaimed hatchery is a ruse. So, which one is the Akwa Prime Hatchery producing,” he said.

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