A senior official of the Central Bank says the 2009 date for the commencement of the West African Common Currency (ECO) is not cast in concrete.
The Central Bank's head of Monetary Policy Analysis, Dr Benjamin Amoah was quoted by the DailyEXPRESS newspaper as saying that “It is not factual that we are joining the ECO in 2009. December 2009 is the target for locking-in into the single currency zone. But the time to start using the ECO currency at this point is unknown.”
He was reacting to growing concerns about the rationale for spending huge sums of money to print new currencies and undertake a public education campaign for the July 2007 cedi re-domination when the country will be joining the ECO in two years.
Dr Amoah said, it was not yet determined that Ghana would join the ECO, explaining that efficiency gains from the 2007 cedi re-domination would even enable the country join the ECO as a strong partner.
“Re-domination is a requirement for joining a common currency. In fact Romania in their preparation to join the European Union and start using the Euro, they re-dominated and dropped off four zeros from their currency. Turkey also had to re-dominate in order to bring the exchange to the dollar close to what pertains in the West African sub-region.
The Central Bank's clarification of the ECO debate followed concerns expressed by a grouping of some opposition political parties, the Committee for Joint Action about the timing of the exercise and the huge expenditure involved.
“The timing of the re-domination exercise is also a matter of grave concern to us. This is especially so when the Bank of Ghana had announced that Ghana is to join the ECO currency zone in 2009.
“Indeed, we are unable to understand the rush to re-denominate the cedi and the huge expenditure in printing new currency notes only to join the ECO in a matter of only two years,” the group claimed.
A leading member of the CJA and Managing Editor of the Insight newspaper, Kwesi Pratt Jnr said at a press briefing called by the group that “the handling of the re-denomination exercise has also left much to be desired.
“At a time when the Governor of the Bank of Ghana went before Parliament to defend the exercise he could not even provide an estimate of how much it would cost to print and circulate the new currency or the cost involved in educating the Ghanaian populace on this re-denomination exercise”.
Explaining away concerns about cost, Dr Amoah who could not provide the exact cost of the exercise said “the Central Bank prints currency every year to take care of wear and tear of the old notes in circulation.
“It costs the country a lot of money to print several notes at a time. But when we re-denominate, it will become economical and less expensive to print as only fewer denominations will be printed with the same economic value”.