07.07.2002 Feature Article

Our Currency Needs major Surgery, Not Cosmetic Reform

Our Currency Needs major Surgery, Not Cosmetic Reform
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I learn with shock and amazement that we are going to spend C110 billion to print C10, 000 and C20, 000 notes. It would not bother me if C10, 000 and C20, 000 were of any substantial value. But, considering that C10, 000 is barely bigger than a Dollar and C20, 000 is merely $2.50, how can we justify spending so much money to print practically worthless pieces of paper? I have said it before; recently in fact in this column, and I will say it again. We need a complete revaluation of our currency. The Cedi needs a major overhaul, not just a mere tune up. For the fear of being redundantly repetitive, I would like to state again that we convert C10, 000 of the Current Cedis into a New Cedi instead of printing larger denominations of the same Cedi. The following are my itemized reasons: 1. Bank of Ghana gave one of the reasons for the proposed larger denomination as effectively reducing the quantity of notes people lull around. Converting C10, 000 to one New Cedi will achieve the same thing and more. 2. The New Cedi will be both easier to count and conceptualize. Consider a businessman who is currently dealing with a C1Billion transaction. A billion Cedis sounds uncountable to even some of the most sophisticated people in Ghana. This amount would be only 130,000 New Cedis. Does this not sound more manageable than C1Billion? 3. My mother would not be so extravagant. Yes, I sent $500 to my mother in Ghana. She picked up almost 4 Million at the Bank. Needless to say, she felt so rich when she heard the millions that she went on a spending spree only to find that C4 Million doesn’t buy any more than $500 does. Of course, within days she called, “Thank you for the money, please send some more.” I am sure she would be less frugal with 500 New Cedis than she would with C4 Million. 4. Tourists would not hate the New Cedi notes as much. Even though the C10, 000 and C20, 000 will reduce the quantity of notes that these visitors have to carry around, they will be dealing with the same basic currency in that they’ll still be converting $130 into C1, 000,000 and will be murmuring to themselves, “What a joke!” 5. C7, 500 to $1 smacks of gross mismanagement. We can correct that impression with revaluation. 6. The Cedi will allow for the use of coins again. The Pesewa will have value again. Coins, unlike paper notes, last a long time. Canada, for example, has completely replaced her One-Dollar and Two-Dollar notes with Coins. Because of this move, it has become easier to slot for coin-operated laundry, soft drink, newspaper, cigarette and other vending machines. The coins can take a beating in these machines and still survive. The current pesewa is virtually useless now. 7. The New Cedi will force the Government to face the reality of the ridiculously low salary situation in the Ghanaian economy. When a worker makes C7,000 a day, he falsely believes that he makes a lot of money; but, he does not. The fact is, he makes a few cents a day and one cannot run an economy effectively where the workers make cents a day. People who make cents a day just cannot afford anything and that is not good for the economy. 8. Recently, it was stated on this site that a Ghanaian Chief Executive from one of the major State Corporations was paid some C90, 000,000 per month. It looked ridiculously high looking at those figures until I converted it to real money. In the New Cedi denominations that I am calling for, this would be only 12, 000 New Cedis per month. It doesn’t seem so outrageous any more, does it? 9. The New Cedi will fit conveniently in a normal hand-held calculator. The current Cedis don’t. 10. The New Cedi will fit conveniently in Wallets. They would not only last longer but also they would be cleaner. And you know what, some one may well start a Wallet manufacturing company and give some people employment that they so badly need. > I entreat the Government to reconsider the decision to print higher denominated Cedi notes, if in fact such a decision is in the offing, and take a deeper look at the Cedi and come out with a better solution. A major surgery on the Cedi may not cost any more than the Cosmetic surgery currently being contemplated.

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