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Zimbabwe Central Bank Borrows $985 Million From African Banks

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Zimbabwe’s Reserve Bank has borrowed $985 million from African banks to purchase fuel and other critical imports with current reserves covering imports for just four weeks, underscoring the severity of dollar shortages, governor John Mangudya said.

The southern African nation last month ditched a discredited 1:1 dollar peg for its surrogate bond notes and electronic dollars, merging them into a lower-value transitional currency called the RTGS dollar.

Mangudya said the central bank borrowed $641 million from the African Export and Import Bank, $152 million from Eastern and Southern African Trade and Development Bank, and $25 million from Mozambique’s central bank, among others.

The loans, which would be repaid from future gold earnings, have a tenure of between three and five years and attract an interest of up to 6 percent above the Libor rate, Mangudya said.

Gold is Zimbabwe’s single biggest mineral export earner, accounting for a third of its $4.2 billion earnings last year after a record output, central bank data shows.

“These loans are well structured facilities contracted last year. They will be paid from future (gold) export receivables,” Mangudya told a parliamentary committee.

The central bank takes 45 percent of dollar sales from gold producers and half from other miners to fund imports like fuel and power and repay foreign loans.

But the miners only have 30 days to keep their dollar balances in local foreign currency accounts, after which they must sell them. The companies have asked the central bank to extend the period they may keep their dollars to 90 days, according to mining executives.

OVERDRAFT LIMIT

Unable to get funding from foreign lenders like the International Monetary Fund and World Bank due to arrears of more than $2.4 billion, Zimbabwe has looked to financiers from the continent and local banks to shore up its budget.

The central bank chief said Zimbabwe had just $500 million in reserves, enough to purchase four weeks’ worth of imports.

Mangudya said government borrowing from the central bank reached $2.99 billion in December, about three times its permissible overdraft limit.

President Emmerson Mnangagwa’s government has promised to curb borrowing in 2019 under reforms to revive the southern African economy, after the budget deficit soared last year following a spike in spending ahead of elections.

Finance Minister Mthuli Ncube said last week that the local RTGS dollar, Zimbabwe’s new de facto currency, will be backed up with fiscal discipline and the government would allow it to fluctuate but would manage excessive volatility.

On the interbank forex market on Monday, one U.S. dollar fetched 2.5 RTGS dollars, the same rate as on Feb. 22 when the central bank sold some dollars to banks. That compares to a rate of 3.5 RTGS dollars per U.S. dollar on the black market. -Reuters

-MacDonald Dzirutwe

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A Tale Of Two Presidents And One Phone Call To Freedom

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A month before South Africa’s elections, one of the country’s leading political figures exposed a number of his former comrades for corruption with evidence to the Zondo Commission on State Capture. It was box office material, yet just another eventful period in the turbulent life of Robert McBride – guerrilla fighter, policeman and death row prisoner.


Robert McBride has one of those faces full of character that looks like it has endured life as much as lived it. A glance through his tough years of struggle yields a list of reasons why: five years on death row to screams and tears of the condemned; scores of beatings over decades; shooting his way out of hospital; years of the shadowy and violent life of an underground guerrilla fighter.

McBride was born in Wentworth, just outside Durban, in 1963, and grew up amid racist insults and violence. It swiftly politicised him and he was taken into the military wing of the African National Congress where he carried out sabotage with explosives.

Even by the standards of the desperate days of the gun in South Africa, McBride’s political activity is remarkable. In 1986, McBride fought his way out of an intensive care ward in a bizarre rescue of his childhood friend and fellow fighter Gordon Webster. It happened at Edendale Hospital in Durban where Webster lay, with tubes in his body, under police guard.

McBride posed as a doctor, with an AK47 hidden in his white coat; his father, Derrick, was dressed as a priest with a Makarov pistol under his cassock. The Truth and Reconciliation Commission heard, in 1999, that hospital staff cheered them on and held back an armed policeman as the McBrides shot their way out, pushing the wounded Webster to freedom on a trolley.        

Thirty-three-years on, McBride went into battle again for his beliefs, this time with words and documents, against a more insidious and formidable foe than armed police – corruption. He gave evidence before the Zondo Commission, in Johannesburg, springing from his days as head of IPID, the independent police investigators.

He spent more than four days on the stand – longer than most cricket matches last these days. He told of missing police evidence, claims of sinister moves to remove corruption busters and the misappropriation of money, under a cloak of secrecy, by the crime intelligence agencies.    

“People don’t like me because of my anti-corruption stance, their dislike of me I wear as a badge of honour. Those who dislike me for other reasons, it is a free country and you are entitled to your likes and dislikes. I have no problem with you. But wherever I am, I will do my work and will always be against corruption. I understand how corruption affects the ordinary man and means there is so much less to go around,” he says.   

To give a little more context, McBride’s erstwhile job went with unpopularity. The head of IPID is a post that politicians, plus probably more than a few disgruntled policemen, wanted him out of. They ended his contract and he assures me he is going to court to get his job back. His stance may give clues as to why some wanted to see the back of him.

“I have spoken loudly every time I have seen something wrong and raised unpopular issues. Some of the issues we picked up early on was police involvement in cash-in-transit robberies… The looting of police funds, the corruption, the wastage and the leverage, we then began to understand it; the leverage that some policeman have over politicians… Any criminal syndicate that is operating requires police to help them otherwise they will be found out in the normal course of events,” says McBride, the month before the hearing.

“Rogue activity by certain elements in the prosecuting authority, the willingness to prosecute people for non-criminal acts and unwillingness to prosecute when there is a pile of evidence…We will also speak about the abuse of state funds, the abuse of power by the police by negating investigations. Most of our evidence is backed up by court papers, evidence and affidavits,” he says.

Many activists who saw the nasty, ugly, side of the struggle often are the first to come down, hard, when they feel freedoms they fought for are being abused. You could argue McBride, an intelligent thinker, is very much one of them.

You could also argue that McBride has been cut adrift by many former comrades and demonized as the Magoo’s Bar bomber – the 1986 car bomb on the Durban beachfront that killed three and wounded scores. Others, on both sides of the South African struggle, who issued orders, or did worse, are undisturbed and anonymous by their swimming pools. Any regrets? I ask.

“It’s like asking me ‘do I regret living in a free and democratic country’, the answer can’t be yes… We would have preferred that things went differently. If you are in an armed struggle, you are the cause of hurt to other people and as a political activist, as a revolutionary you can defend that and justify it.

“But as a human being, you know that when it concerns other people, it is not the right thing to do to cause the hurt of other people. I have expressed myself as a human being on this, not because I was trying to elicit any sympathy or anything; I have never asked for redemption, I have never asked for forgiveness. Those who know me know what I am about and those who understand the circumstances in the early 1980s when we became active; those who are old enough to remember that was what the circumstances were.”

Those circumstances recede further into the darkness of memory of democratic South Africa every year, yet, in the minds of those who suffered, it stays pin sharp. McBride spent five years on death row, in Pretoria, after being sentenced to the gallows for the Durban bombings.

He reckons the prison hanged more than 300 prisoners in this time. Through the cell door, he heard the condemned screaming and crying as warders dragged the condemned along the passages to their fate. The hanging warders used to bring back the bloody hoods from the gallows and force the next batch of condemned men to wash them.

In May 1990, the sun shone as hope visited death row in Pretoria. The prison management summoned McBride and a group of fellow condemned activists, to the main office at the maximum security prison. Each were given green prison jackets – the garb of special occasions. Warders drove them, in a van, to a distant part of the prison and all feared they were either going to be executed or allowed to escape and shot in the back.

“We were told not to talk and then we were put in this big room with a steel of security around the room and after about 45 minutes the former president (Mandela) walked in and it was the most beautiful sight on earth; the greatest feeling ever and when he walks in, he says: ‘Ah, Robert! How are you!’ As if he knew me forever. It was the most important meeting I had in my life. It was like a God-like environment. He gave us a rundown of negotiations and what can be expected and that we must not worry, we must be patient and sit tight, he knows all of our backgrounds and will do his utmost to get us released and we will never be forgotten.”

It took more than two more years, in the shadow of the noose… until a fateful Friday. September 25, 1992. McBride will never forget the date.

“Round about half past four in the afternoon, I got a call to come to the office, I didn’t know what it was about, and when I came there, the head of the prison said: ‘You have a phone call’. It was my first phone call in prison. On the other end of the line was comrade Cyril Ramaphosa and he says: ‘Hi chief’. I keep quiet and then he says: ‘Monday’. I say: ‘What’s happening Monday chief?’ He keeps quiet, then he says: ‘You are going home!’ There was a bit of a smile you could feel in his voice,” says McBride with a huge smile on his face.

Long after Mandela had completed his long walk to freedom for his country, McBride was to yet again hear the click of a prison key and feel the pain from a warder’s boot.

It was the summer of 1998 and in Maputo, the sea was warm and the prawns were hot. The police in Mozambique picked up McBride, then a high-ranking official in foreign affairs, on alleged gun running charges that appeared to be trumped up to us journalists. We scoured the streets of the capital, for weeks, in search of witnesses.

McBride argued that he was on an undercover operation for the National Intelligence Agency trying to uncover gun runners who were flooding neighbouring South Africa with illegal weapons and fuelling crime; a counter that eventually set him free.

Despite this, McBride spent six months in the capital’s notorious, grim, Machava maximum security prison, where he told me violence was meted out.

I covered that story for many months and came within a split ace of interviewing McBride in his cell. We spent hours plying the Portuguese-speaking warders with beer and the story, through an interpreter, that we were friends visiting from South Africa and we just wanted to say hello. We told them our friend was a big man in South Africa.

“He is a small man now,” smiled back one of the warders icily.

We convinced the guards and as they moved towards the prison doors, keys in hand, our cover was blown. One of the not too bright colleagues from our TV station strolled into the prison waving his press card.

“Hello Chris!” says he. The none-too-pleased prison guards threw us out.

I had to wait more than 20 years for my interview with McBride.

A phrase I always remembered from those many hot, crazy, days in Maputo was a quote we got from the late presidential spokesperson Ronnie Mamoepa when McBride went behind bars yet again.

“He is a tough guy who can look after himself,” said Mamoepa.

The Zondo Commission and scores of corrupt policemen last month found out how tough.  

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Southern African Countries Won’t Manage Disasters Unless They Work Together

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Cyclone Idai, which recently devastated Mozambique, Zimbabwe and Malawi, was one of the worst natural disasters to hit the southern African region. It killed at least a thousand people and caused damages estimated at US$2 billion.

The response from the Southern African Development Community (SADC) member states, civil society, the private sector and individuals in the region points to the need for a collective, regional approach to addressing natural disasters – rather than individual countries working alone.

Idai also showed, once again, just how unprepared SADC is to respond to major natural disasters. It doesn’t seem to have learnt much from earlier ones.

In 2015, floods and torrential rains associated with the tropical storm Chedza, and Cyclone Bansai left about 260 people dead and 360,000 homeless in Madagascar, Malawi, Mozambique and Zimbabwe.

About a year earlier, flash floods killed, displaced and left thousands homeless in Zimbabwe. However, the storm that remains most vivid in many people’s minds is the one that hit Mozambique 19 years ago in 2000, killing 700 people and leaving two million homeless.

Disasters of this kind know no boundaries. That’s why they require thinking beyond the narrow view that individual governments should respond to crises alone.

Responses to Idai

The first regional response to Idai came from the South African National Defence Force and South African disaster relief NGO, Gift of the Givers. These responses followed a request by the Mozambican government.

The United Nations responded with aid operations in the affected countries a few days later. Other SADC countries, NGOs, the private sector and ordinary citizens also donated to the relief efforts.

For its part, however, SADC’s voice was conspicuously absent for at least a week after the devastation. Ordinarily, it should have led relief operations.

It was disconcerting to see UN Secretary General António Guterres appeal for help and outline a plan to respond to the disaster at a Security Council stakeout, while SADC remained missing in action.

SADC has a dedicated Disaster Risk Reduction Unit. It coordinates regional preparedness and responses to trans-boundary disasters and hazards. But, as South Africa’s Foreign Affairs Minister Lindiwe Sisulu said, the regional body was completely unprepared for the disaster.

Pooling resources

Of SADC’s 16-member states only Angola, Botswana, Tanzania, Zambia and South Africa contributed to the relief efforts. This reflects the prevailing preference for a bilateral approach to regional challenges within the SADC.

At the heart of this are narrow nationalistic interests and a preoccupation with sovereignty. The member states are unwilling to surrender control over policies to be administered by the regional body for the collective good.

But, natural disasters like Idai doesn’t respect national boundaries. Their very regional scope requires solutions that integrate domestic actions into a regional governance framework to address them effectively.

When SADC eventually responded, it pledged US$500,000 for relief efforts towards a disaster that cost over US$2 billion in damages to infrastructure alone.

Instead of acting individually, SADC countries need to work together to pool resources and mobilise disaster relief efforts and resources to be more effective. This could be done through the SADC Secretariat.

Funds for immediate humanitarian assistance and the rebuilding of infrastructure should be held in a preexisting, dedicated facility, like a regional disaster risk fund.

This would provide southern Africa with risk financing for climate-related and other disasters. Funds that are often donated by SADC member states, private sector, NGOs, and ordinary citizens for relief efforts can also be pooled and placed in the permanent regional mechanism.

But, there are challenges.

The major challenge to establishing a sub-regional disaster fund probably lies outside SADC, and even Africa. The idea might not sit well with some governments. For example, an attempt to create an Asian Monetary Fund after the 1997/98 Asian financial crisis failed because the US strongly opposed it, and China didn’t support it.

But, SADC could work with global financial institutions to surmount this challenge. The World Bank, for example, already runs disaster risk programmes. SADC could approach it for support and partnership in making the facility a reality.

Cushion against harm

Cyclone Idai has once again shown that natural disasters are capable of wreaking havoc across southern Africa. It’s also shown that affected countries are too poor to respond to the devastation of their infrastructure and the accompanying humanitarian disaster.

It is thus necessary for countries in the region to work together to devise sound contingency plans, including a permanent regional disaster fund, to help cushion them against the effects of natural disasters.

-Chris Changwe Nshimbi; Director & Research Fellow, University of Pretoria

-The Conversation

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Here’s How The US Claims The Assange-Manning Conspiracy Worked

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The U.S. government has disclosed more of its case against WikiLeaks cofounder Julian Assange. It hinges on a claim he and Chelsea Manning worked together to crack a password for a computer storing sensitive government files.

An affidavit unsealed Monday outlining the case against Assange said he conspired with Manning when they discussed working together to crack a password “related to two computers with access to classified national security information.” More specifically, the password belonged to a user called FTP (not to be confused with an FTP server) on two Windows computers that Manning could access from a base in Iraq, the government said.

The FTP account wasn’t associated with any specific individual, and the government alleged that if Manning had used it to pilfer files and hand them over to Wikileaks, she could have foiled investigators looking into who was behind the leaks.

“Although there is no evidence that the password to the FTP user was obtained, had Manning done so, she would have been able to take steps to procure classified information under a username that did not belong to her,” the affidavit read. “Such measures would have frustrated attempts to identify the source of the disclosures to WikiLeaks.”

The alleged conspiracy to crack the password took place in March 2010, two months after she’d walked out of the Iraq base with classified war reports from Iraq and Afghanistan. She was later convicted and served seven years in jail for downloading tens of thousands U.S. military documents and diplomatic cables.

How passwords are cracked

The reason any password had to be cracked in the first place was the use of what’s known as a “hash.” Microsoft’s Windows operating system doesn’t store passwords in plain text. That’s to prevent hackers who find a way on to the computer from seeing and stealing them. Instead, Microsoft makes life harder for cybercriminals and snoops by turning that plain text into scrambled code. That string of letters and numbers is known as a “hash value” and it’s created when an algorithm is applied to the plain text of the password.

For an attacker to get at the plain text it’s possible to do a so-called “brute force attack.” The process for this is basic: The hacker creates a huge list of guessed passwords through the same hashing algorithm used by Windows to find a matched hash value for the hidden password. Once the same hash value is calculated, the password has been found.

Sometimes a password will be too complex for guessing to work in a short enough time frame. That’s where “rainbow tables” come in. These contain a massive number of hash values for previously calculated passwords. Hackers use them to do a quick comparison of the hash they have with the ones in the table, in the hopes that it’s already been seen before and a match is available.

“In computing terms we call this a time/memory trade-off. Rather than spend time on a task, we pre-calculate parts of it and store them somewhere, essentially trading time for memory,” says Tom Wyatt, senior penetration tester at cybersecurity provider Bulletproof. “These tables can be calculated or downloaded from various online sources, and it simply boils down to paying for storage for it all; even in 2010 this was fairly cheap and entirely possible.”

But Microsoft goes one step further in protecting those hash values by splitting them in two, storing the parts in separate files. Here’s where a little trick comes in handy: A hacker might be able to recover those two separate pieces by rebooting a Windows PC using a CD with the Linux operating system. Back in 2010, it was possible to do that and recover the full hash value.

Ken Munro, a penetration tester with Pen Test Partners, told Forbes the technique still works, as long as there’s no additional layer of security over it, such as full disc encryption. “Whilst the technique still works, it’s quite rare to find systems that don’t now have full disc or similar encryption,” he added. (Microsoft hadn’t responded to a request for comment at the time of publication). According to the government’s telling of the story, evidence suggests Manning tried, and very possibly failed, with this technique. In a footnote in the affidavit, the government said Manning hadn’t provided Assange with the full hash, only one of the two halves required.

It’s alleged Manning passed what she thought was a hash value to Assange. The Wikileaks chief then said he would pass it on to a specialist in cracking, according to chats over the Jabber encrypted communications app, as provided in the affidavit. But, as per the investigators’ claims, there was some confusion: Manning said she wasn’t even sure what she handed to Assange was the hash value they wanted. Assange messaged Manning to ask if there were “any more hints” about the hash and that he’d had “no luck so far,” according to the government account. From there it’s unclear what happened. The government admits it didn’t know whether the password was ever cracked.

Not that it changes much for Assange: The charge is that of conspiracy. If he did offer assistance to help Manning gain access to U.S. government systems and encouraged the then intelligence analyst to leak files, the charge still stands. Manning, who served seven years in jail before being pardoned by President Barack Obama, is back behind bars for refusing to testify in the investigation into Wikileaks. Her lawyer had not responded to a request for comment at the time of publication.

Assange’s lawyer, Jennifer Robinson, couldn’t be reached for comment at the time of publication. She told Sky News yesterday that the indictment against her client showed “the kinds of communications journalists have with sources all the time.” Following Assange’s arrest, however, various journalists have said on Twitter that any incitement to hack organizations or steal documents was far from normal and risked breaking the law.

Meanwhile, the fallout from Assange’s arrest continues. According to Reuters, Ecuador’s telecommunications vice minister Patricio Real said the government’s networks had been hit by a mass of cyberattacks after it decided to revoke Assange’s asylum status. He claimed various government websites had been slammed by 40 million hacking attempts per day, double the number it typically sees.

-Thomas Brewster; Forbes Staff

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