Mixed Reaction to New Cedi Note

There are mixed reactions to the proposal by the Bank of Ghana (BoG) to put out a new cedi denomination before the end of this year. Many callers to the Joy FM business report yesterday suggested that the new denomination should be fifty thousand cedis or more, while others think the government should concentrate on measures that would sustain the stability of the currency instead of printing new notes.

"I think that now that we are working on stabilizing our economy, we should not think about printing new bigger denominations. The more we work on it the worse the economy becomes," said a caller who gave his name as Nortey.

According to Joy FM's business report, the Bank of Ghana Board is currently discussing the issue to ascertain the exact value for the new denomination.

The higher cedi denomination is meant to ease the burden of carrying large sums of money, which makes transacting business cumbersome. The BoG is seeking to relieve Ghanaians of this money-carrying burden. The Deputy Central Bank Governor, Mr. Emmanuel Asiedu Mantey said higher denominational currency should be out by the end of 2002. "The decision may be taken very soon. Maybe in the next month or two, the printing may take six to nine months."

New Cedi Denomination To Be Unveiled -Joy Online

A new cedi denomination is likely to be unveiled before the end of this year. The Bank of Ghana Board is currently discussing the issue to ascertain the exact value for the new denomination, which is expected to be higher than five thousand cedis. The higher denominations are meant to ease the burden of carrying bulky money.

The local currency seems stable now, but years of depreciation resulted in the huge lost of value. Consequently transacting business with the cedi has become cumbersome. Most business executive’s, particularly international business tycoons, have had course to complain about carrying large sums of cedi notes around.

The cedi has devalued so much that one requires some polythene bags or a suitcase to carry about seven million cedis in a regular transaction at the bank. You’ll be lucky to use just one bag if you get the five thousand cedi notes. If you’re unfortunate enough to receive the two thousand cedi notes then you will certainly need more bags.

This seven million is just about a thousand US dollars, which easily fits into a wallet without the bulky inconvenience. The Bank of Ghana is seeking to relieve Ghanaians of this money-carrying burden. Deputy Central Bank Governor Emmanuel Asiedu Mantey says higher denominational currencies should be out by the end of 2002.

The higher denomination of the cedi seems to be a good idea, but perhaps an even better idea will be a more modern payment method. Very few businesses are willing to accept cheques as payments instruments. Some economists have suggested that if the law against the issuance of dud cheques is vigorously enforced, Ghanaians will gradually move from the cash in hand business transaction.

Some banks have tried to reduce the burden of cash transaction by introducing electronic payment systems, but that has achieved very little – only the elitist few make use these sophisticated payment systems. Meanwhile, an expert in Money and Banking at the Centre for Policy Analysis (CEPA) Dr. Nii Kwaku Sowah however says there are no strong arguments for the printing of higher cedi denominations.

According to him, it is not just enough to print higher denominations when the majority of Ghanaians in the lower income bracket will continue to use the lower denominations. Dr. Sowah points out that there is variety of options for business transactions other than the printing of higher currency denomination.