Re-denomination of currency is a natural sequence

Accra, Nov. 29, GNA - Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning, on Wednesday said the re-denomination of the currency was a natural sequence which was intended to cut some zeros from our money.

'We cannot go on carrying the zeros, we have moved from thousand to million, billion and we are now at trillion. We need to cut the zeros otherwise our system will not be able to compute our currency at a point,' he said.

Mr Baah-Wiredu was speaking at the opening of a forum for Internal Auditors on the theme: 93Improving Public Financial Management, Internal Auditing as an Accounting and Management Control Tool=94. He said re-denomination should also be the concern of auditors and explained that the plan to re-denominate the currency had been on the drawing board for about a year now.

Mr. Baah-Wiredu stressed that the exercise would not result in loss of value of our currency.

Dr Paul Acquah, Governor of Bank of Ghana, announced last Saturday that cedi notes and coins in circulation were to be re-denominated and replaced with Ghana Cedi (GH Cedi) and Ghana Pesewa (Gp) with effect from July 2007,

He said the current notes, which were in denominations of 20,000, 10,000, 5,000, 2,000 and 1,000 and the coins in 500, 200, 100 and 50 would be re-denominated by setting 10,000 cedis to one new Ghana Cedi. This means that 500,000 cedis would be equivalent to 50GH Cedis, 200,000 cedis would be equivalent to 20GH cedis, 100,000 cedis would be equivalent to and 10GH cedis, 5,000 cedis would be equivalent to 50Gp, 2,000 cedis would be equivalent to 20Gp and 1,000 cedis would be equivalent to 10Gp.

Dr Acquah said the series of the new set of notes would be 0ne GH Cedi, Five GH Cedis, 10 GH cedis, 20 GH cedis and 50 GH cedis whilst the coins take 1Gp, 5Gp, 10Gp, 20Gp, 50Gp.

He said both the old and new cedi banknotes and coins would be in physical circulation for six months after which the old notes and coins would only be exchanged at the Bank of Ghana and any commercial or rural bank but would not be legal tender.

The Governor of the Central Bank said the external value of both the old and new currencies would be the same as the purchasing power would not change because the cedi would not be devalued or re-valued. The current notes which are in denominations of 20,000, 10,000, 5,000, 2,000 and 1,000 and the coins in 500, 200 and 100 are placing significant deadweight burden on Ghana's economy.

Dr Acquah said the deadweight burden of the current cedi denominations was in several forms that included high transaction costs at the cashiers, general inconvenience and high risks involved in carrying loads of currency for transaction purposes.

Others were increasing difficulties in maintaining bookkeeping and statistical records and ensuring compatibility with data processing software and the strain on payments system, particularly Automated Teller Machines (ATMs).