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Monetary policy and economic decline
Media Monitoring Project Zimbabwe (MMPZ)
Extracted from Weekly Media Update 2006-4
Monday January 23^rd – Sunday January 29^th 2006

THIS week the media focussed on the fourth quarterly monetary policy review by central bank governor Gideon Gono. The Press devoted 49 stories to the presentation, of which 23 appeared in the official papers and 26 in the private Press. ZBH aired 28 reports (ZTV six; Radio Zimbabwe eight; Spot FM 14), while Studio 7 featured five reports and SW Radio Africa two.

Although the official media generally quoted some economists critically examining the statement, most of their stories either simplistically celebrated or amplified Gono’s speech. However – ZBH, especially ZTV – gave subdued coverage to the governor’s statement as compared to the typical celebratory and high profile status it has previously accorded such presentations.

For example, of the two reports ZTV carried on the monetary policy presentation, only one was a top story (24/1, 6pm) while the other report in the main evening news bulletin (24/1, 8pm) was relegated to the business section. Besides, none of the stories critically investigated the critical components of the monetary policy.

In fact, except for The Sunday Mail comment (29/1): Monetary authorities need political support, none of the official media seemed willing to attribute the economic problems highlighted by Gono to government’s skewed policies. Consequently, these media ended up censoring or failing to give adequate coverage to some of Gono’s frank diagnosis regarding rampant levels of corruption, farm disturbances, foreign currency shortages and soaring inflation.

Neither did they wonder whether the new $50 000 bearer cheque would adequately match the scourge of galloping inflation, which Gono himself predicted would leap from the current 586 percent to around 800 percent by next March.

Instead, The Herald (25/1) simply hailed the new paper money, saying it "will help cut down on the bulky piles of cash everyone needs just to buy a few groceries" and increase the maximum amount of money individuals could withdraw from ATMs per transaction.

The paper also censored Gono’s inflation forecasts and barely covered his condemnation of ongoing farm invasions. It merely reported that the governor had "admitted that it had lost the battle (to reduce inflation) in the year 2005 but not the war".

Only the Chronicle of the same day published Gono’s revised inflation forecasts although it did not view this as symptomatic of the authorities’ failure to arrest economic decline. Instead, it passively quoted the governor urging Zimbabweans not to "panic" because the "combined effects of tight monetary conditions, fiscal restraint, and the expected improvement in food security this year would help rescind inflationary pressures". The paper amplified this optimism in its comment, Let us pull together to rebuild economy.

The official media’s censorship of some of Gono’s candidly uncomplimentary observations remained unbroken. For example, they did not report Gono’s revelations that Defence Forces Commander General Constantine Chiwenga had raised fears that the continued food shortages could trigger riots and urged the central bank to address the situation. This only appeared on SW Radio (26/1), Studio 7 and in the Zimbabwe Independent (27/1.)

However, in a rare display of balance, the official media did carry alternative views on Gono’s report. Spot FM (23/1,1pm and 24/1, 1pm), for example, quoted economists warning that the monetary policy alone would not work unless government complemented it.

The Herald (26/1 & 27/1) also cited commentators Phibion Gwatidzo and Farayi Dyirakumunda asking for prudence in the implementation of the monetary policy. Gwatidzo was quoted saying that without "unity of purpose…" and the "restoration of our credibility with the international community" Gono "will fail".

But Spot FM (28/1, 8pm & 29/1, 7am) and Radio Zimbabwe (29/1, 6am) soon relapsed into conspiracy mode. They quoted Policy Implementation Minister Webster Shamu saying Gono’s monetary policy, "a milestone in the country’s struggle for economic independence", had "shamed" Zimbabwe’s "detractors" whose "desire is to create divisions" between the governor, the country’s leadership, business and the public.

How this was so, he did not say, nor was he asked.

In fact, The Herald (26/1) used Gono’s " impassioned appeal" to the international community to "lift sanctions" against Zimbabwe when he briefed diplomats on the monetary policy statement, as a scapegoat responsible for all of Zimbabwe’s economic ills. The Sunday Mail article (29/1), Sanctions: A socio-economic perspective, echoed this claim.

Notably, both papers obscured the fact that only Zimbabwe’s ruling elite and their associates are the ones facing any sanctions.

The generally passive manner in which the government media reported the presentation of the monetary policy also manifested itself in the way ZBH covered indicators of economic decline in its 17 stories on the matter (ZTV six; Spot FM two; Radio Zimbabwe nine). None of the stories holistically examined the problems as indicative of a collapsing economy or related them to the monetary policy.

For example, the continued depreciation of the local dollar against the US dollar (ZTV 24/1, 8pm) did not elicit any exploration of the reasons for this trend or its effects.

Moreover, ZBH dismally failed to provide clarity on the continuing surge in prices.

For example, ZTV (26/1,6pm) failed to reconcile Energy Minister Mike Nyambuya’s warning that commuter omnibus operators should not "randomly" hike fares "all the time" since they were getting subsidised fuel at $20 000 per litre with the operators’ contention that the only fuel they were accessing was on the black market - at $120,000 a litre. Spot FM and Radio Zimbabwe (29/1, 8pm) also failed to investigate the matter when they announced new increases in commuter bus fares by at least 50 percent.

The voice distribution in the official media is shown in Figs 1 and 2.

Fig. 1 Voice distribution on ZBH

Fig. 2 Voice distribution in government papers

In contrast, the private Press was forthright in its examination of Gono’s monetary policy review categorically ascribing the problems besetting the economy to government’s mismanagement.

For example, SW Radio Africa (24/1) reported economist John Robertson attributing the economic tailspin to government’s bad political decisions, such as the forced replacement of skilled farmers with inexperienced ones, heavily compromising production. He said the situation had been made worse by government’s reluctance to accept its mistake by blaming everything on drought. Said Robertson: "…unfortunately we are not deserving of support from international lenders because Zimbabwe has not taken the right steps to address the issues".

The Independent expressed similar sentiments. It noted that although Gono gave "useful information on the state of the economy", it was "downright disingenuous" for him to attribute the problems to the "media and Western sanctions" when the "real problem" lies with "the presidential incumbent and his regime".

The Financial Gazette (26/1) quoted economists saying the governor’s projection of 800% inflation by March was conservative as it was likely to top 1 000 percent.

Other economists cited in the Independent worried about the central bank’s decision to "control the interbank exchange rate system", saying it would "fuel the parallel market and hinder foreign currency inflows into the official market".

In addition, the paper noted that, "printing and demand for the (new) bearer cheque would increase money supply growth" and make the authorities’ fight against inflation more difficult.

However, The Mirror stable, like the official media, generally celebrated Gono’s statement and projected it as the remedy Zimbabwe needed. The Daily Mirror (25/1), for example, blacked out Gono’s forecast of 800% inflation and simplistically hailed the new $50 000 bill (26/1) saying it would "make life easier" for people to carry "their hard earned incomes in a more safe mode".

The private radio stations carried seven stories (Studio 7 [four] and SW Radio Africa [three]) on indicators of economic decline. In addition, they carried four stories updating their audiences on a fact-finding mission to the country by the IMF. For example, Studio 7 (25/1) quoted Robertson noting that Zimbabwe had "done enough to avoid expulsion but…[not] nearly enough to qualify for new assistance…"

However, The Sunday Mail carried a pre-emptive report on the Fund’s visit that sought to portray it as insincere in its dealings with Zimbabwe.

The voice distribution on Studio 7 is shown in Fig 3 and that of the private Press in Fig 4.

Fig. 3 Voice distribution on Studio 7

Fig. 4 Voice distribution in the private Press

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