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Musings From Abroad

New British PM Starmer declares Rwanda migration deal ‘dead and buried’

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Keir Starmer, the newly appointed prime minister of Britain, announced on Saturday that he would abandon the contentious plan to transport thousands of asylum seekers from Britain to Rwanda. This is Starmer’s first significant policy declaration following his overwhelming election victory.

The plan to return undocumented migrants to the nation of East Africa was first announced by the previous Conservative government in 2022, with the stated goal of ending the influx of asylum seekers in small boats.

However, the proposal never saw any people transferred to Rwanda due to years of legal battles. In his first press conference as prime minister, Merkel declared that the Rwanda policy would be abandoned since it would not have served as a deterrence and that just 1% of asylum applicants would have been expelled.

“The Rwanda scheme was dead and buried before it started. It’s never been a deterrent,” Starmer said. “I’m not prepared to continue with gimmicks that don’t act as a deterrent.”

As the most powerful British leader since former Prime Minister Tony Blair, Starmer gained one of the biggest parliamentary majorities in modern British history on Friday. However, he still has several obstacles to overcome, including bolstering the flagging public services and the economy.

During the Downing Street news conference, Starmer fielded roughly a dozen questions and was frequently questioned about how and when he would begin implementing his promised solutions to the country’s problems. However, he provided few details about his plans.

When asked if his government would recognize issues and take action in areas like addressing an overburdened prison system and cutting lengthy wait times to access the state-run health care, Starmer responded that his government would be willing to make difficult decisions and raise taxes if needed.

“We’re going to have to take the tough decisions and take them early, and we will. We will do that with a raw honesty,” he said. “But that is not a sort of prelude to saying there’s some tax decision that we didn’t speak about before.”

As part of an agreement worth 120 million pounds ($148 million), the British government, under the immediate Prime Minister Richie Sunak, disclosed last year that it intended to send thousands of migrants to the nation in East Africa to discourage asylum seekers from using tiny boats to cross the English Channel from France.

In recent times, Europe has become increasingly concerned about illegal immigrants originating from Africa and the Middle East. A record 45,000 people had flown over the English Channel in small boats as of June 2023.

Musings From Abroad

Nigeria, China extend $2bn currency swap deal

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A 15 billion yuan ($2 billion) currency-swap arrangement between China and Nigeria has been extended to boost investment and commerce between the two countries.

According to the People’s Bank of China, the agreement is anticipated to strengthen financial cooperation and encourage the wider use of the yuan and naira in bilateral transactions, as reported by Bloomberg and Chinese local media on Friday.

“The agreement is valid for three years and may be renewed upon mutual consent,” the central bank said in a statement.

The bank stated that by lowering reliance on third-party currencies like the US dollar, the currency-swap agreement renewal is expected to strengthen economic linkages, promote investment, and ease cross-border commerce.

When the Central Bank of Nigeria and the People’s Bank of China inked an agreement worth renminbi (RMB) 16 billion (about $2.5 billion) in May 2018, the currency-swap framework was first implemented.

Yi Gang, the former governor of the PBoC, and Godwin Emefiele, the suspended governor of the CBN, signed the deal.

The original agreement was intended to eliminate the need for third-party currencies like the US dollar by giving companies and industries in both nations direct access to the yuan and naira.

“This agreement will provide naira liquidity to Chinese businesses and RMB liquidity to Nigerian businesses respectively, thereby improving the speed, convenience, and volume of transactions between the two countries,” the CBN had said at the time of the signing.

To promote flexible and varied regional monetary and financial cooperation, including local currency swaps, to ease commerce between the two countries, President Bola Tinubu and President Xi Jinping of China met in September.

The leaders also talked about how currency-swap programs contribute to global financial stability.

Nigeria and China agreed to strengthen international collaboration on financial intelligence, emphasizing anti-money laundering and fighting the funding of terrorism, since commerce between the two nations makes up around 30% of Nigeria’s total trade.

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Musings From Abroad

World Bank suspends loan fees for impoverished countries

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To lower borrowing costs for vulnerable nations, the World Bank has announced the elimination of several loan fees. The action is a component of larger initiatives to increase financial capacity and tackle pressing global issues including inequality, climate change, and economic instability.

This was revealed by the international bank in a statement on Wednesday. The bank has extended its lowest pricing to tiny, fragile nations, removed the prepayment cost on International Bank for Reconstruction and Development loans, and instituted a grace period for commitment fees on undisbursed amounts.

“The bank is working hard to make it easier for countries to borrow and to pay back their loans more easily by removing some fees on IBRD loans,” the financial institution stated.

The financier claims that these adjustments are intended to relieve the financial strain on countries that require development funding the most.

“These measures are designed to make borrowing easier and more affordable for countries facing significant challenges,” the bank said. It added that the reforms align with its vision of building a “better, more efficient, and bigger” institution capable of addressing overlapping global crises.

The World Bank’s larger financial reforms, which include fee eliminations, are intended to boost lending capacity by $150 billion over the next ten years.

As part of the changes, the IBRD’s equity-to-loans ratio was lowered from 20% to 18%, allowing for an additional $70 billion in lending over ten years.

According to the statement, $1 billion was obtained through a guarantee from the Asian Infrastructure Investment Bank, and an additional $10 billion has been released through bilateral guarantees.

“The adjustments to our capital framework reflect our commitment to scaling up resources while maintaining financial stability,” the bank said.

The international lender highlighted that these adjustments are essential to tackling the billions of dollars that are required each year to help fragile governments, fight climate change, and advance digital inclusion.

It did concede, nevertheless, that states and multilateral organisations are insufficient to discharge these financial obligations on their own.

The Bank has created a Framework for Financial Incentives to close the gap, promoting investments in cross-border issues like pandemic prevention, energy access, water security, and biodiversity.

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