Above: Annual Inflation Rate, June 2020-June 2021 (%) The economic environment remained uncertain (in the short term) mainly due to the financial shocks caused by the COVID-19 pandemic previously experienced as well as limited fiscal policy measures. However, despite weaker growth recorded at the beginning of the year, there was a basic recovery expected for real GDP in view of improved performance in certain key sectors of the economy. This was expected to ease the situation and possibly trickle down to the media sector as well30. According to the Stanbic Purchasing Manager’s Index (PMI) for April31, there was growth recorded in input buying as well as expansion in new business for the first time in a long period, leading to the slowest fall in activity in more than two years. Further, new orders slightly returned to growth. However, reduced staffing levels affected firms as they could not keep up with workloads especially in the wake of improved customer demand. Against this backdrop was an increase in purchase costs and increased staff costs, leading to companies increasing their selling prices. Generally, there was improved business confidence. The performance of various economic fundamentals in each quarter has a somewhat direct or ripple effect on the media sector and its operations and this was the case in the second quarter. Firstly, media houses heavily rely on advertising and sponsorship as a source of revenue to support their operations. The majority of media houses in Zambia are heavily dependent on advertising revenue to sustain their operations, an issue that has been a cause for concern for a long time32. As such, a bleak or turbulent economic environment (like that observed in the quarter) with reduced economic and commercial activity entails low advertising revenue as most firms tend to reduce on production and promotion as indicated in the findings cited above. 30 The Bank of Zambia Quarterly Survey of Business Opinions and Expectations for the first quarter of 2021 reveals that business entities expected improved economic performance in the second quarter of 2021 based on most economic indicators rising above the expected average, increase in agricultural output as well as general optimism boosted by the COVID-19 vaccination programme. 31 See https://www.stanbicbank.co.zm/static_file/Zambia/ZM_PMI_APR_2021.pdf 32 See Banda, F. (2004). Newspapers and magazines in Zambia-a question of sustainability. Lusaka: MISA. See also: Kasoma, F. (2004). Community radio: its management and organisation in Zambia. Lusaka: MISA. 14 State of the Media in Zambia