The Cost Of Social Media Fake News To The Economy Is “Horrendous” Says RBZ Governor, John Mangudya

The current concern surrounding ‘fake news’ may be mostly centered on its influence on political outcomes, including elections; but there are also consequences for consumers and investors.

This sentiment is shared by the Governor of the Reserve Bank of Zimbabwe, Dr. John Mangudya who is lamenting the negative impact of fake news on the economy. Unsuspecting people are being led to make decisions they would not have made had they known that whatever information they are using to make decisions is fake. Dr. John Mangudya said;

The cost of fake social media articles is horrendous in terms of economic, financial, social and political costs to the economy. The cost to the economy of such unfortunate messages far exceeds the explicit cost of around $800 per advert that we place in the media. Wrong decisions that people make due to fake news is beyond measure

The Governor may have been saying this with reference to the recent fake article which said that the central bank was going to reintroduce a new currency last week. Yes, fake news has horrendous effects in the social and political sphere. But I wouldn’t go as far as to say the same (horrendous) in the financial or economic sphere.

The average consumer could be affected by the fake news since they make day to day decisions which are routine and hardly need too much consideration. However, in many ways, fake news has made consumers smarter. They are more skeptical of the reliability of the information they receive, especially online. Hence, they end up not making buying decisions based on fake news.

Also, I hardly think investors who usually commit a lot of money are hardly victims of fakes news as they have to exercise ‘extra due diligence’ before committing their money.

Financial gains through fake news

Sometimes fake news is intentional. This kind of news can get so much traffic it trends, and earn thousands in advertisement revenue. What’s worse, fake news is sneaked into our everyday lives with such subtlety most people don’t know it’s there. Adverts published by media outlets and social networks warn everyone to watch out for fake news, but when the mediums themselves are used to facilitate misleading information, things start to get confusing.