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Monetary policy and economic issues
Media Monitoring Project Zimbabwe (MMPZ)
Weekly Media Update 2005-18
Monday May 16th - Sunday May 22nd 2005

RESERVE Bank of Zimbabwe (RBZ) governor Gideon Gono's fifth monetary policy review, coupled with the continued manifestation of the country's deepening economic problems, highlighted the week. The media carried 203 stories on the issues. Of these, 80 appeared on ZBH (ZTV, Power FM and Radio Zimbabwe), 50 in the government Press, 61 in private papers and the remaining 12 stories on Studio 7. Forty (50%) of the ZBH stories focussed positively on Gono's monetary review, dubbed the post-election and drought mitigation monetary policy, though the monetary statement itself did not address the looming widespread famine that threatens the country. Neither did ZBH question the silence of Gono's monetary policy on Zimbabwe's crippling fuel crisis. Rather, the ZBH stories simply magnified the perceived positive aspects of the document. These included Gono's plans to stop the country sliding back into a speculative economy by reversing the current low interest rates, eradicating corruption and facilitating more foreign currency generation by boosting agricultural production. The government Press, which devoted 30 stories to the monetary policy, fared little better.

Typically, in their previews of the monetary policy these papers sought to pre-empt criticism against the policy by claiming that it would cure the ailing economy. The optimism of The Herald (19/5) for example was merely based on the claim that Gono was a "well-known economic disciplinarian" who "has never been short of surprises". The next day The Herald (20/5), the Chronicle (20/5), The Sunday Mail and The Sunday News (22/5), supinely applauded Gono for his commitment to tackling the economic crisis without examining his strategies.

Because of this blind praise, none of these papers questioned whether the devaluation of the local currency from US$1: ZW$6,200 to ZW$9,000 would curb the parallel exchange rate market, which is almost treble the official figure. Nor did they view Gono's upward revision of his year-end inflation rate target of between 20% and 35% to between 50% and 80% or his downward economic growth prediction figures as acknowledgement of the deteriorating economic climate.

The government media's narrow portrayal of Gono's statement was reflected in the government Press' sourcing pattern. Although the papers sought comment from a wide range of sources (as shown on Fig 1) almost all of them supported Gono and government policy.

Fig 1 Voice distribution in the government-controlled Press

In addition, the papers carried seven editorials and opinion pieces, which also approved of government's economic polices and blamed the economic decline on the black market. Similarly, although Gono was categorical in his condemnation of corruption in both government and private sectors, ZBH seemed to selectively use voices that only blamed industries and the black market on the matter.

For example, ZTV (20/5, 8pm) used selected members of the public to blame businesses for unethical conduct, resulting in the re-emergence of a thriving black market on basic commodities, a sentiment earlier echoed in The Herald (18/5). In addition, it quoted Justice Minister Patrick Chinamasa, corroborating insinuations in The Herald (18/5) and Chronicle (20/5) that the Zimbabwean economy was a victim of sabotage, by describing "high indiscipline by manufacturers and exporters" as "politically-motivated." In fact, ZBH's passive endorsement of the authorities' policies dovetailed with the official Press' portrayal of government as fully committed to rekindling economic growth while simultaneously shifting blame for the economic decline to industry and the black market. Nearly all the 20 stories the official papers carried on Zimbabwe's economic contraction conveyed this notion.

It was against the backdrop of this blame-game that saw the government media passively handle the destruction of flea markets and the arrest by police of thousands of people accused of engaging in economic crimes in 22 stories they carried on the matter. These media steered clear of the fact that the proliferation of flea markets and the black market was a reflection of a distressed economy. But as these media (typically, The Sunday Mail) blamed industry and the black market for price increases they apparently welcomed the Cabinet's plans to allow the government-controlled Zimbabwe Electricity Supply Authority (ZESA) to increase its tariffs by 126 percent to cater for its "crippling debt burden and acute capital shortages".

Neither did they question the economic sense of a new government price control regime. In fact, while ZTV (16/5, 6 and 8pm) cited Ministry of Trade Permanent Secretary Christian Katsande suggesting that government had recently set new prices for basic commodities in consultation with industry, a representative of the business community, William Zireva, seemed to deny this, saying he "only knew of the gazetted prices in the media." Despite this, however, the station still claimed: "Following talks between government and business, there is now hope that basic commodities will now be available."

And to obscure these increasingly harsh economic realities ZBH bombarded its audiences with glowing reports on Gono's monetary policy. For example, news on the monetary statement gobbled 1 hour 14 minutes (30%) of the 4 hours

2minutes ZTV devoted to its main news bulletins (excluding, sport, the arts, weather and foreign news) in the week. Gono's presentation of the monetary review was covered live on all ZBH stations on May 19th, and ZTV later rebroadcast it after its main bulletin at 8pm. The next day (20/5) ZTV also televised live a breakfast meeting comprising government, businesses and central bank officials at which ZTV reported government as having "pledged support for Gono's monetary policy".

ZTV reporter John Arufandika concluded in the 8pm bulletin: "So clear was the unity of purpose on the way forward between the government and central bank putting paid to claims by detractors that the RBZ was working outside its mandate." However, the reporter dodged explaining whether Gono was indeed working outside his mandate notwithstanding the alleged government support.

But Studio 7 (19/5) and the Zimbabwe Independent (20/5) undertook to clarify the matter. Studio 7, for example, quoted MDC Finance Secretary Tendai Biti explaining that Gono had no business dabbling in policy issues such as appealing to former white commercial farmers to return since "Gono's portfolio" as recorded "in Section 6 of the Constitution of RBZ Act" only empowers him "to look into monetary policy which addresses interest rates, money supply and exchange rate". The Independent agreed: It observed that by making policy statements on agriculture, Gono had apparently taken over the running of the sector from the responsibility of Agriculture Minister Joseph Made.

Biti's statement was part of the 93 comments that the private media sourced in its 73 stories, which, except for the comments in The Daily Mirror and Financial Gazette (20/5), tried to assess the shortcomings of the monetary policy and government's mismanagement of the economy. The stories included the Independent's dismissal of Gono's monetary plans as "desperate" and "piece-meal" because they did not "address the structural distortions in the economy". The paper noted that the governor had not come up with "credible solutions" to deal with shortages of foreign currency, power and basic commodities adding that he was also silent on how government would fund food imports.

Equally sceptical of the effectiveness of Gono's plans was economist Daniel Ndlela whom Studio 7 (20/5) quoted as criticising Gono's foreign currency exchange rate policy. The economist contended that Gono's "devaluation was peanuts" since it was not calculated on the margin "of the misalignment of exchange rate compared to the market rate", which "is measured with the proxy of black market". Besides carrying critical assessment of the monetary policy, the private media, as exemplified by the Mirror stable, continued to expose the mayhem in the economy despite assurances from Gono that the problems would end soon.

The private papers' critical approach was apparent in their voice distribution as shown in Fig 2.

Fig 2 Voice distribution in private press

Unlike the government Press, business executives and alternative voices quoted in the private papers were more critical of the monetary policy and government's macro-economics. They also carried 13 editorials that examined the authorities' management of the economy.

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