
The recent revelations of printed and stolen monies hidden under beds, polytanks, and secured private buildings have highlighted the urgent need for currency reform in Ghana. Under the leadership of President John Dramani Mahama, it is crucial to consider the withdrawal of the current currency and the issuance of a new one. This article explores past examples of currency reforms, including those under military governments, provides recommendations for the Mahama administration, and outlines measures to ensure economic growth and stability.
Ghana's Currency Change Experience and History
Ghana has a rich history of currency changes, reflecting its journey from colonial rule to independence and beyond. Prior to independence, the British West African pound, shillings, and pence were in circulation. In 1958, the Bank of Ghana issued its own currency, the Ghana pound, shillings, and pence, marking the country's first step towards monetary independence.
In 1965, Ghana decided to leave the British colonial monetary system and adopt the widely accepted decimal system, introducing the cedi and pesewa. The cedi was equivalent to eight shillings and four pence (8s 4d) and bore the portrait of the then President, Dr. Kwame Nkrumah. The name “cedi” was derived from the word “sedie,” meaning cowrie shell.
After the overthrow of the CPP government, the military government decided to replace the existing currency, which bore Nkrumah’s portrait, with one without his portrait. The New Cedi (N¢), as it was called, was introduced on 17th February, 1967 to replace the 1965 cedi at a rate of ¢ 1.20=N¢ 1.00. The N¢ notes remained in circulation until March 1973 when it became simply known as the cedi.
In 1979, the Government announced the introduction of new cedi notes to replace the old ones at a discount of 30% for amounts up to ¢5,000 and 50% for amounts in excess of ¢5,000. The old cedis were demonetized, and new denominations were issued, including ¢1, ¢2, ¢5, ¢10, ¢20, and ¢50.
Recommendations for President Mahama's Administration
1. Introduce a New Currency: Withdraw the current currency and issue a new one to combat the circulation of counterfeit and stolen money. This move will help restore confidence in the financial system and ensure that illicit funds are brought into the formal economy.
2. Strengthen Financial Oversight: Implement stringent financial controls and regular audits to ensure transparency and accountability. This includes reducing administrative expenses and redirecting funds towards critical sectors such as healthcare, education, and infrastructure.
3. Promote Digital Transactions: Encourage the use of digital payment systems to reduce reliance on cash and enhance financial inclusion. This can be achieved through incentives for businesses and consumers, as well as investments in digital infrastructure.
4. Enhance Public Awareness: Conduct comprehensive public awareness campaigns to educate citizens about the benefits of currency reform and the importance of financial transparency. This will help build public support and ensure a smooth transition.
5. Adopt International Best Practices: Learn from past examples of currency reform and adopt international best practices to ensure a successful implementation. This includes engaging with international financial institutions and experts to provide guidance and support.
Integration with the 24-Hour Economy
President Mahama's vision for a 24-Hour Economy can be integrated into the currency reform process to enhance productivity and economic growth. By extending operational hours for financial institutions and promoting round-the-clock economic activities, Ghana can increase its output and competitiveness in the global market. This approach will also create job opportunities and stimulate economic activity in rural areas.
In conclusion, currency reform is essential for revitalizing Ghana's economy and ensuring long-term stability. By addressing financial mismanagement, promoting digital transactions, and enhancing public awareness, President Mahama's administration can restore confidence in the financial system and drive economic growth. As the Bible says, "By wisdom a house is built, and through understanding it is established" (Proverbs 24:3). An African proverb also reminds us, "If you want to go fast, go alone. If you want to go far, go together."
Together, we can build a stronger, more resilient Ghana that benefits all Ghanaians and attracts international investment.
#Retired Senior Citizen
Teshie-Nungua