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Monetary policy and economic decline
Media Monitoring Project Zimbabwe (MMPZ)
Extracted from Weekly Media Update 2000 – 4
Monday January 29th 2007 – Sunday February 4th 2007

All media widely covered Reserve Bank governor Gideon Gono’s monetary policy statement. The print media devoted 61 stories to the subject, 31 of which appeared in the private Press and 30 in government papers.

The electronic media carried 59 reports. Of these, 32 featured in the private electronic media while ZBC aired 27.

However, there was generally inadequate evaluation of the salient points of Gono’s presentation, which included a freeze on interest and exchange rates (soon to be followed by another prices and wage freeze in March) and an end to the central bank’s quasi-fiscal operations.

But the official media were the worst.

They either reported the statement disjointedly or failed to adequately analyse the soundness of the policy pronouncements in their reports.

For example, none of them openly debated the viability of Gono’s calls for setting up a "social contract" in light of the long-established differences between government, labour and business on the causes of the economic woes and how to address them.

Neither did they give prominence to Gono’s acknowledgement that the country’s political crisis was negatively affecting the economy.

Instead, ZBC’s news bulletins tried to project the policy as having been endorsed by business and economists as the panacea for the country’s ailing economy.

It was in this context that most headlines of its 27 stories on Gono’s statement dishonestly depicted business, as having unreservedly welcomed it when in actual fact some of those quoted basically doubted its economic prudence.

For example, while Radio Zimbabwe (1/2, 8pm) claimed that "captains of industry have seconded the monetary policy statement," it in fact quoted Zimbabwe National Chamber of Commerce official Mara Hativagone dismissing the policy, saying that apart failing to provide measures to stem inflation, Gono did not offer solutions to problems bedevilling businesses.

Earlier, Spot FM and ZTV (31/1, 1 & 8pm) drowned National Investment Trust official Aaron Jeremiah’s criticism of Gono’s failure to provide measures to arrest industrial decline in comments that simplistically celebrated his calls for a social contract as the tonic for economic revival.

Similarly, The Sunday Mail (4/2) simply welcomed the social contract plan out of context, arguing that there was "documented evidence that a social contract has produced results for other countries", giving reason for Zimbabwe to revisit the idea.

None of these media reconciled Gono’s calls with numerous failed attempts to draft such a contract under the Tripartite Negotiating Forum in the past.

Rather, The Herald (1/2) and Spot FM (1/2, 1pm) passively quoted some commentators hailing Gono’s refusal to devalue the local currency without explaining clearly how the decision would benefit the economy.

The Herald, for example, quoted businessman Patrick Siyawamwaya applauding the development saying "this would go some way in stabilising prices of goods and services" as devaluation would have caused prices to "skyrocket". There was no explanation on how this would happen, especially as businesses claimed they already depend on the steep parallel market foreign currency rates due to the acute shortage of the hard cash on the official market.

While the Chronicle (1/2) quoted the ZNCC bemoaning the "the failure to devalue" on the grounds that it was going to "negatively affect the export sector", it also did not ask the body to elaborate on the matter.

For example, there was no attempt to establish who was benefiting from the artificially low fixed official exchange rate regime since businesses said they were not.

Although the government media’s sourcing patterns appeared diverse as shown in Figs 1 and 2, their coverage of the subject remained largely superficial and blindly supportive of government measures.

Fig 1 Voice distribution in the government Press

Fig 2 Voice distribution on ZBC

Notably, most of the business and alternative voices were quoted making generalisations on the effectiveness of the policy.

However, ZBC was more critical in its current affairs programmes.

For example, in Face the Nation, ZTV (1/2, 9.30pm) featured businessman David Govere who dismissed Gono’s measures as ineffective. He argued, for instance, that the policy statement had "touched on general issues that are known by everyone" adding that "it had no punch in as far as setting serious targets and serious performance issues."

He also noted that the ‘social contract’ that the governor had prescribed would not work as long as the authorities "cannot compromise their tastes for expensive goods." As an example, he cited Gono’s purchase of a luxury vehicle worth US$138 000, an amount he claimed was higher than the US$120 000 required to fund a small enterprise that employs 100 people for a year.

Economist Luxon Zembe made similar observations during his post-monetary policy presentation interview with Spot FM (31/1, 11.15am).

Such analysis was more pronounced in the private media. For example, SW Radio Africa & Studio 7 (31/1), New Zimbabwe.com, The Financial Gazette (1/2), The Daily Mirror and Zimbabwe Independent (2/2) and The Standard (4/2) all reported on the futility of Gono’s measures, especially his calls for the establishment of a social contract, noting that similar efforts to address the country’s economic demise through such a set-up had flopped in the past.

They all argued that unless there was "political will", Gono’s calls would remain unheeded.  

In addition, The Standard quoted Zimbabwe Congress of Trade Unions (ZCTU) secretary-general Wellington Chibebe dismissing Gono’s proposal to freeze wages and prices as unworkable as long as there were disparities between wages and the poverty datum line.

The government media largely avoided such debates.

Neither did they report Gono’s suspension of the introduction of yet another new currency due to continued economic decline.

Only the Independent noted that the "last minute" suspension came after "serious policy considerations". This included advice from the IMF, which noted that the new currency will "not halt economic collapse until the macro-economic situation has been stabilised".

The private media’s critical approach was reflected by their use of a variety of voices to assess Gono’s pronouncements. See Figs 3 and 4.

Fig. 3 Voice distribution in the private electronic media

Fig. 4 Voice distribution in the private Press

Meanwhile, all the media highlighted symptoms of the country’s economic distress, which this week manifested themselves in the continued rise in the cost of living, labour unrest and the decline in industrial production.

The media devoted 90 stories on the matter, of which 32 appeared in the government media while the private media featured 58. However, it was only the private media that continued to view these indicators of decline in the context of government mismanagement. The official media narrowly attributed the economic ills to government’s favourite scapegoats: unscrupulous business activity and the alleged sanctions.

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