Africa & World

Liz Truss the new British Prime Minister who replace Boris Johnson has come under sharp criticism after the pound hit record low against the dollar.

This was due to last week’s huge tax-cutting budget.

The main opposition Labour Party lambasted Truss for the massive spending plans, which some economists warn could further fuel inflation.

Labour’s finance spokeswoman Rachel Reeves described the situation as a “national emergency” and likened Truss and her chancellor of the exchequer Kwasi Kwarteng to “two desperate gamblers in a casino chasing a losing run”.

“The message from financial markets was clear on Friday and this morning that message is even more stark: sterling is down. That means higher prices, as the costs of imports rise,” she said.

“The cost of government borrowing is up. That means that more taxpayers money will go into paying the interest on our government debt.

“And in turn that means the cost of borrowing for working people will now go up to with higher mortgage repayments,” she told Labour’s annual conference in Liverpool, northwest England.

Britain has been facing a cost-of-living crisis with soaring energy prices coupled with inflation and wage stagnation.

Kwarteng was appointed finance minister by Truss earlier this month after she took office following a leadership battle to replace Boris Johnson as head of the ruling Conservative Party.

On Friday Kwarteng unveiled a multi-billion-pound package to support households and businesses.

He also slashed taxes, bringing forward a plan to cut the lowest rate of income tax and reducing the highest to 40 percent from 45 percent to kickstart the economy

But investors were spooked by the huge amount of borrowing likely needed for the package, which critics said would benefit the rich far more than the poorest hit by the cost-of-living crisis.

The cost of the energy support measures alone have been calculated at £60 billion ($65 billion) for only six months.

But economists estimate the whole tax package at between £100-200 billion.

The pound on Monday struck an all-time low at $1.0350 before regaining some ground to stand at $1.0728 around 1115 GMT.

The pound had already suffered a series of 37-year lows against the greenback this month on UK recession fears propelled by high inflation.

Former United States President Donald Trump has hinted that he might run for President in the 2024 Elections.

He dropped this hint at a White House campaign, with the former US president telling Indian television that a run for office would “make a lot of people very happy”.

“Everyone wants me to run. I am leading in the polls,” Trump said in an excerpt of an interview with NDTV to be broadcast in full later on Thursday.

“In every poll, in Republican polls and in Democrat polls, and I will make a decision in the very near future, I suspect. And I think that a lot of people are going to be very happy,” he added.

Donald Trump also asserted his claims that the 2020 election in which he lost to current President Joe Biden was rigged.

According to him, they were tremendous proof and evidence to back his claim.

The Republican has faced intense legal scrutiny over his efforts to overturn the results of the poll and over an attack on the US Capitol by his supporters on January 6 last year.

He is currently under investigation for potential mishandling of classified documents, with the FBI raiding his Florida home last month.

Trump has denied wrongdoing and called the raid “one of the most egregious assaults on democracy in the history of our country”.

In a speech on Saturday in Pennsylvania he hit back at assertions by Biden that he and his supporters are undermining US democracy, calling Biden an “enemy of the state”.

Police in China have arrested 234 suspects allegedly involved in a rural banking scandal, a month after hundreds of depositors protested over their lost savings in one of the largest demonstrations the country has seen since the pandemic began.

Four banks in central China Henan province suspended cash withdrawals in April as regulators cracked down on mismanagement, freezing the funds of hundreds of thousands of customers and sparking protests that at times ended in violence.

Police said they had now arrested 234 people in connection with the scandal and that “significant progress” was being made in recovering stolen funds.

“A criminal gang… illegally controlled four village and town banks… and was suspected of committing a series of serious crimes,” police in the city of Xuchang said in a statement on Monday.

it said a criminal gang led by the alleged mastermind, Lv Yi, took control of four rural banks including Yuzhou Xinminsheng Village Bank, luring depositors with promises of annual returns as high as 18%.

Anguished depositors have staged several demonstrations in the city of Zhengzhou, Henan’s provincial capital, over the past two months to demand their savings back, but their calls had fallen on deaf ears.

In July, more than 1,000 depositors from across China gathered outside the Zhengzhou branch of the country’s central bank, the People’s Bank of China, to launch their largest protest yet. The peaceful demonstration was crushed violently by authorities, with police and plain-clothed security personnel forcefully dispersing protesters.

Following the protest, Henan’s financial regulator said depositors would be refunded, with the first payments being sent to bank customers with a combined total of less than 50,000 yuan ($7,200) deposited at a single bank.

On Monday, the financial authorities said they would launch another round of repayments to customers, this time focusing on those with deposits of between 400,000 yuan ($57,800) and 500,000 yuan ($72,200).

Depositors who have lost more would receive an initial sum of 500,000 yuan with the remainder reserved for now, according to the regulators.

“After this round of repayments, the centralized repayment work will be largely completed, and further matters will be dealt with by the four rural banks,” the statement said.

Runs on small Chinese banks have become more frequent in recent years and some have been accused of financial improprieties or corruption. But experts worry that a much bigger financial problem could be looming, caused by fallout from a real estate crash and soaring bad debts related to the Covid-19 pandemic.

About a quarter of the total assets in China’s banking system are held by around 4,000 small lenders, which often have opaque ownership and governance structures and are more vulnerable to corruption and the sharp economic slowdown.

The People’s Republic of China has committed to forgive interest free loans of 23 African Countries.

The Chinese foreign minister made this statement known in a forum on China-Africa cooperation. According to him, the 23 countries whose debts would be forgiven have debts that have matured since 2021. Wang Yi however failed to specify the particular African countries that would be forgiven.

He pledged that China would continue to actively support and participate in the construction of major infrastructure projects in Africa through financing, investment and assistance.

We will also continue to increase imports from Africa, support the greater development of Africa’s agricultural and manufacturing sectors, and expand co-operation in emerging industries such as the digital economy, health, green and low-carbon sectors.”

“What Africa wishes for is a favourable and amicable cooperation environment, not the zero-sum Cold War mentality,” Wang said, according to the post.

Since the Forum on China-Africa Cooperation took place in Senegal in November 2021, Beijing has delivered $3 billion of $10 billion of credit facilities pledged to African financial institutions, Wang said in the speech.

In addition, this year China has agreed to tariff-free entry to 98% of exports from 12 African countries and has provided emergency food assistance to Djibouti, Ethiopia, Somalia and Eritrea, he said.

“So far this year, China has signed exchange of letters with 12 African countries on zero tariff for 98% of their export items to China. We have provided emergency food assistance to Djibouti, Ethiopia, Somalia, and Eritrea. More African agricultural produce has reached the Chinese market through the green lanes,” he added.

It is to be noted that China is the leading lender to over 32 African countries and the continent owes China more than $148 billion dollars combined.