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The Monetary Policy
Media Monitoring Project Zimbabwe (MMPZ)
Weekly Media Update 2005-40
Monday October 17th – Sunday October 23rd 2005

THE government media’s amnesia in handling pertinent national policy issues was clearly illustrated by their supine coverage of the monetary policy review statement from Reserve Bank governor Gideon Gono during the week.

These media simply celebrated the statement without relating it to Gono’s previous monetary policy pronouncements. For example, none of the 30 stories the official Press (12) and ZBH (18) carried on the matter viewed Gono’s decision to relinquish government control of the exchange rate and allow market forces to determine the value of the local currency as a major policy shift considering he has steadfastly refused to do so in the past.

Neither did these media try to link this development with IMF demands to allow the market to determine the value of the local dollar. Nor did they see Gono’s drastic revision of his inflation target of 80 % by year-end to between 280 and 300 % as a clear admission of failed economic policies. There was also no analysis on the effects of raising interest rates from about 200% to more than 400% on industry’s viability.

Instead, ZTV (20/10, 8pm) simply rehashed highlights of Gono’s statements and celebrated the new foreign currency exchange policy saying the move would "improve foreign currency inflows" without explaining how.

The Herald (21/10) followed suit. It passively noted that the introduction of the interbank market exchange rate "will pave way for efficient allocation of resources in the foreign currency market …at the same time improving exporters’ viability and luring foreign exchange into the official system".

And instead of seeking diverse opinion on the subject, the paper simply restricted itself to sourcing comments from pro-government analysts, who praised the purported benefits of the dollar’s effective devaluation, although the word "devaluation" was pointedly missing from government media reports.

None of the media asked policymakers and commentators why it had been necessary to impose such heavy controls on the dollar’s value for so long, if allowing the dollar to find its own value was the solution to Zimbabwe’s economic crisis. The inflationary effect of the devaluation and its impact on the soaring cost of living was also never touched.

To lend the monetary policy international approval, ZTV (21/10, 8pm) and Power FM (22/10, 8pm) claimed that the "diplomatic community" had also "thrown its weight behind economic recovery measures outlined by central bank governor" saying "whilst Zimbabwe has received widespread negative publicity on issues pertaining to both economic and political issues, the situation on the ground reflects a better Zimbabwe with a better future".

None of the ambassadors were quoted saying this.

It was against this blind endorsement of Gono’s policies that the government media suffocated the governor’s plans to introduce a new currency by March next year, a move usually taken by countries with failed economies. The government media’s pathetically inadequate coverage exposed their reliance on official sources and alternative voices that merely echoed government sentiment, as illustrated by the sourcing pattern of the official Press. See Fig 1.

Fig 1 Voice distribution in the government Press

Most of the 15 stories the private Press carried on Gono’s new monetary policy were sceptical about its ability to turn around the economy. The Zimbabwe Independent (21/10) especially, believed that despite the IMF’s predictions of a bleak economic future, Gono had still "not come up with a viable reconstruction model but clung to the failed plan", a situation that boded ill for the economy.

It noted that the governor’s plans to introduce a new currency, his revision of inflation targets and the dumping of foreign currency auctions for a floating system was actually an admission of his failed monetary policies.

The Standard (23/10) noted that Gono implored government not to condone more land invasions if his efforts to win the war against inflation was to be won. Studio 7 and SW Radio Africa carried three stories that also questioned the effectiveness of Gono’s policies.

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