Back to Index

State media heaps praise on Gono's dollarization of the economy
Extracted from Media Update 27/2008
Media Monitoring Project Zimbabwe (MMPZ)
September 19, 2008

The government media failed to give a holistic analysis of Reserve Bank Governor Gideon Gono's recent monetary reforms, underpinned by the licensing of 1,000 retail outlets and 200 wholesalers to sell goods (except basic commodities) in foreign currency.

Reportedly, the reforms are aimed at harnessing foreign currency inflows into the formal market. ZBC especially, just endorsed the reforms without question.

As a result, there was no investigation into whether the decision would not create more confusion in an economy already saddled with multiple exchange rates and pricing systems. Neither did it reconcile the reforms with the RBZ's other failed policies, nor tasked Gono over his denials that his measures were not tantamount to the dollarization of the economy.

The Herald (12/9) also glowingly reported industry "welcoming" the policy while relegating to the tail-end of its story reservations by the Zimbabwe Federation of Trade Unions, which dismissed the move as "negative to the general population" since workers were not paid in foreign currency.

However, a cartoon in the same paper and a comment in the Chronicle (11/9) entitled: "What happens to those without forex?" summed up the irony of charging goods in foreign currency despite the fact most workers in Zimbabwe are paid in the local currency.

The Chronicle comment, for instance, dismissed Gono's "partial dollarization" as "dangerous because it often creates contradictions in the economic system" and "merely opens up more opportunities for profiteers to rip off ordinary consumers".

Although the government media recorded several indicators of economic decline, which included massive price hikes, severe commodity shortages and the collapse in service delivery, they reported these in isolation of government's mismanagement.
Only the private media did.

For example, they interpreted Gono's monetary reforms as a reflection of the authorities' policy confusion and as an admission that Zimbabwe's currency had lost value.

They also recorded diverse opinions on the effects of Gono's selective dollarization of the economy. For example, The Financial Gazette (12/9) quoted economist Takunda Mugaga saying that by dollarizing the economy Gono had "opened the floodgates towards realism" since "our local currency has collapsed". It also cited another economist, John Robertson, saying "nothing meaningful was likely to come out of the new measures", adding: "there will be no improvement in the availability of goods at all". But surprisingly, Robertson was not asked to explain why there would be no improvement.

The private media also failed to reconcile Gono's move with the National Pricing Commission's declaration the previous week, which stated that charging school fees in foreign currency was illegal. They also made no meaningful follow-ups on Gono's decision to increase the daily cash withdrawal limit to $1,000 considering that this amount has since been hopelessly outpaced by the galloping cost of living spurred by a world record inflation of more than 11 million percent.

Visit the MMPZ fact sheet

Please credit www.kubatana.net if you make use of material from this website. This work is licensed under a Creative Commons License unless stated otherwise.

TOP