19.12.2007 Business & Finance

Don’t Give Out Change In Old notes, Coins - Bank Of Ghana

19.12.2007 LISTEN
By Daily Graphic

With barely 18 days for the old Ghana cedi notes and coins to cease to be legal tender, the Bank of Ghana (BoG) has appealed to traders and operators of supermarkets and other retail outlets to desist from giving out change in the old notes and coins.

The Central Bank confirmed that 90.5 per cent of all the old notes and coins had been withdrawn from the system, leaving 9.5 per cent still in circulation, and asked all commercial outlets to help mop up the remaining old notes and coins to be sent to the nearest commercial, rural or community bank or loans and savings companies to exchange for the new currency.

The Director of Research at the BoG, Dr Ernest Addison, in an interview with the Daily Graphic, however, gave the assurance that after December 31, 2007 when the old notes would cease to be legal tender, the banks would still exchange the old notes and coins for the new ones.

Dr Addison stated that the BoG would be stepping up its public education to ensure that all old notes and coins were sent to the banks by the close of this year.
The BoG, in July this year, re-denominated the cedi by setting ¢10,000 to one Ghana cedi, equivalent to 100 Ghana pesewas.

This means that ¢500,000 is now equivalent to GH¢50; ¢200,000 is equivalent to GH¢20; ¢100,000 is equivalent to GH¢10; ¢5,000 is equivalent to 50Gp; ¢2,000 is equivalent to 20Gp, and ¢1,000 is equivalent to 10Gp.

The series of the new set of notes are also GH¢1, GH¢5, GH¢10, GH¢20 and GH¢50, while the coins are 1Gp, 5Gp, 10Gp, 20Gp, 50Gp, 100Gp.

Both the old and new cedi notes and coins have since July 1 2007 been in physical circulation but after December 31, 2007, the old notes and coins will only be exchanged at the Bank of Ghana and commercial or rural banks.

The reason for adopting this policy decision was to help remove the significant dead weight burden that the old cedi regime placed on the economy.

This measure, taken in the context of strong economic fundamentals and macro-economic stability, according to financial analysts, has already resulted in significant efficiency gains which are expected to enhance the way business is done in the country.

Dr Addison stated that the banks did not have any deadlines for the exchange of the old notes and appealed to all to help in the withdrawal of the old currency from the system.

The BoG says it has so far spent $66.2 million on the re-denomination exercise, a figure that represents a saving of $28 million, compared with the $94.8 million spent in 2003 and 2006 to replace worn-out notes and coins and top up for the existing currency in circulation.

With the deadline for the phasing out of the old currency very near, traders are bracing themselves up for the challenge that the change over to the new Ghana cedi will bring, reports Rebecca Quaicoe Duho & Eleanor Gurney.

Despite the Central Bank's appeal for traders to desist from giving change in the old notes and coins, interviews conducted by the Daily Graphic at various retail outlets show that not only are they receiving more of the old currency but they also continue to dispense them as change.

A Manager at the Variety Chop Bar at Tudu, Accra, Mr Philip Ayitey, said the past few days in particular had seen a sharp increase in the number of old notes and coins brought to the bar.

He also explained that it was difficult for the bar to take the notes to a bank to exchange them because it needed cash on hand at all times to give change to customers.

He complained that the new coins were not readily available and that it was necessary to go to a bank to obtain them, which was difficult to do during busy working days.

Mr Ayitey's sentiments were echoed by workers at the Shell Shop and Filling Station on the Castle Road, Accra, who said that they also received old currency notes every day and that they did not keep them but rather gave them back to customers as change.

However, a petrol attendant there, Kwasi Botwe, said he had developed a system of keeping the old notes and passing them on to management for payment to the bank.

He said ironically, some members of the public specifically requested to be given the old notes, a development which he attributed to their desire to keep them as souvenirs after the currency exchange deadline.

Other traders, including Joseph of the Alaha Discount Store, Circle Branch, Accra, said for some time now they had not received any old currency note. Instead, they said, their customers were becoming accustomed to using the new notes.

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