04.05.2002 Feature Article

It Is Time To Revalue The Cedi

It Is Time To Revalue The Cedi
LISTEN MAY 4, 2002

I mince no words as I call for a new type of currency for our country. Those who know me can attest to the fact that I have, for the longest time, argued for a new and more manageable currency the ordinary person can count. In the first place, I get confused when I hear figures in the millions of cedis when those cedis translate into a couple of hundred dollars. I am sure there are many Ghanaians who feel the same way. The current currency is a grave inconvenience. It is not conducive for business transactions, banking and accounting. It is a complete waste of our valuable time. Take for instance, a businessman who sends his messenger to cash 100,000,000 cedis. He joins a long line and waits his turn while the tellers count and recount similar amounts being withdrawn and deposited by others. When his 100,000,000 cedis are finally handed over to him, he had better count them again or his boss will hold him responsible for any shortfall. So, he squatters somewhere and recounts these millions in the glare of onlookers, probably, robbers. When he gets back to his boss, he also re-counts to make sure he has the right amount, before he breaks them into smaller millions to pay for various transactions. And those who receive the funds have to recount and so on down the line. If you multiply the effect of what I have just described, it is not difficult to see that Ghanaians spend more time counting money than actually working. If you can put dollars and cents to the time wasted in counting and recounting money in the economy, you would arrive at an astonishing figure. The economy, unfortunately, does not capture money-counting time in its GDP. It is non-productive time. And you know what? 100,000,000 cedis is only $13,000. The sheer quantity of the funds we lug around makes us all of susceptible to robbery. It is obvious to any onlooker that you are carrying plenty of money when you have a bag under your armpit, or on an attendant’s head. I would even want to opine that, one of the many factors that dictate the rate of fall of the Cedi is the fact people within Ghana would want to buy and hold their cash in dollars for the sake of convenience, instead of lugging around those uncountable Cedi notes. To a large extent, we are a country of illiterates. There are several of us who cannot even visualize what a million is, let alone a billion or trillion( Pepepem, pem, pem, pem) The forex bureaus and bank tellers are shortchanging millions of people because of the nature of our currency. Tourists detest our currency. It makes us look like a banana Republic in the eyes of our international traders. As we all know, we got into the current situation because of the rapid depreciation in the currency that we experienced in the last few decades. The Cedi is relatively stable now, thanks to the financial gurus. It is a good time to revalue it. Fewer cedis, worth its salt, will be cheaper to print and replace when worn out. What I am calling for is that the Ministry of Finance, Bank of Ghana and the Commercial Banks should confer and look seriously into bringing a New Cedi which can be exchanged for say ten thousand of the current Cedi notes. For example, you bring in 10,000 old cedis for One New Cedi note. One advantage worth noting is that, under the current currency we have, businessmen get nervous when the exchange rate changes by even 100 Cedis. Under the New Currency, such a change would be counted in pesewas and would not appear, at least psychologically, to be so significant. I am aware that, we are talking about a common currency for West Africa. If that is the reason why we are waiting then fine, otherwise, the earlier we get a new currency the better.
Views expressed by the author do not necessarily reflect those of Ghanaweb.

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