New Money

I've been away for a bit...yours truely has to work for pay and some crazy hectic work came up... in Ghana... so sorry for the silence... i'm back now... with the most publicized story in Ghana right now....

If you have ever been to Ghana, you will be aware that carrying a huge amount of Ghanaian currency is normal. The Ghanaian currency is denominated in large numbers, with the smallest note being a one thousand cedi note; in Ghana you are easily a millionaire… in Cedi mind you.

In Ghana, a bottle of coca cola goes for 8000 cedis, and a plate of chicken and chips goes for 40,000 cedis in Papaye (a popular fast food joint in Accra), one American dollar ($1) exchanges for 9300 Cedis as at today.

The size of the currency makes business transactions somewhat difficult in Ghana, with automated currency machines having to dispense more currency notes; and high volume business executed with large amounts of cash which are cumbersome to carry.
When you are coming from an economy where ‘ten thousand’ is not something you would buy a drink with; transacting business is particularly difficult.

So in a bid to simplify business transactions in the country, make things easier for those of us who just can’t count :-), The Bank of Ghana has decided to redenominate the currency.

Now what is that?
Simply that the Bank is bringing out a new set of currencies called the ’Ghana Cedi’, which will give the same value as the present currency but be in less quantity. The 10,000 Cedi (C10,000) will be replaced by one Ghana Cedi (1GhC) which is also equal to a hundred Ghana pesewa (Ghp); the 20,000 Cedi (C20,000) will be replaced by two Ghana Cedi (2GhC) and so on.
If you are extremely fast with figures, then you will have noticed that the bank is simply taking away 4 zeros from the old Cedi to make the new Ghana Cedi!

The highest note currently in use in Ghana is the 20,000 Cedi which exchanges for a little over 2 dollars. The bank is introducing the new currency 1 July, 2007 which will be spent concurrently with the old currency for 6 months before that is phased out. In the true Ghana style there will be a public holiday to celebrate this notable event (Ghanaians are still the most nationalistic I have ever met… it’s the country where wearing the national flag is a normal thing!... now that’s a story for another day).

So after the 1st of July, a bottle of coke in Ghana will go for 0.8GhC or 80Ghp under the new currency (now that’s more like it). Also after the redenomination, the highest currency will not be an equivalent of the highest note now – the 20,000 Cedi but will be 50Ghana Cedi the equivalent of 500,000Cedis today!, the government is not only changing the currency, they are introducing a currency note that will exchange for 55 dollars if the exchange rate remains the same! This means people can carry more money; say 20pieces of a 50Ghana Cedi in a flat wallet which is equivalent to $1100, 10million Cedis today!... now I’m not sure that is a good idea…

Wont that affect the economy adversely?.... wont all of ‘these’ mess the economy up? lead to inflation?, little money in circulation at first and then an explosion of it, wont the new currency lose value?... and so on and so forth… the questions in mind are endless.

The Ghanaian government is assuring us all that the value remains the same; we will only be carrying less cash for the same transactions, you will still be able to make the same obtain the same purchases, products and services under the new currency as you could under the old and the Ghanaian Government is doing it’s very best to educate the people on the redenomination exercise.

I think its succeeding pretty much; the slogan you hear everywhere: the media, newspapers and the public is ‘the value remains the same’; and the Ghanaian people in true nationalism appear to have taken the government at its word.

Sometimes I wonder if the people are chanting the mantra ‘the value remains th same’ to better reassure themselves that the value had better remain the same… somewhere in my mind, if i lived in Ghana, i would probably have converted all my meager funds to dollars or pounds now... just in case... you never know...now don’t mind me… I’m just thinking aloud.

Anyway, in 38 days, Ghana will be spending a new currency, and if you are regular visitor to Ghana returning after July 2007, do take note, and check the currency you hand over when transacting your business… what ever that is!
So guys the count down is on….and remember… “the value remains the same”
Or so I hope!