Kufuor's redenomination was political – Mornah

Value Never The Same

General Secretary for the People's National Convention (PNC), Bernard Mornah says the cedi redenomination has created high cost of living for Ghanaians.

“In the past, if you travel to the villages and gave someone 200,000, it was so much that it will be risky to keep it at home… the person then would have to keep the money at the Bank, hence encouraging the habit of saving."

“Now that NPP have slashed the zeroes, and 500,000 is just one note, who will think of saving if he or she could easily keep that in their pockets," he pointed out.

This followed a statement made by Dr. J. K Kwakye, a Senior Economist at the Institute of Economic Affairs (IEA) that Ghana’s inability of controlling inflation is attributable to the redenomination of the cedi by the erstwhile Kufuor administration.

Government at the time said the exercise was to address past incidents of high inflation rates and other economic difficulties.

Delivering the IEA’s 2014 mid-year economic review of the country, Dr. Kwakye maintained that the resolve to have had the currency redenominated was rather politically motivated.

The senior Economist further attributed the decision to government’s intention to create the impression that Ghana’s currency is of a very high value.

Dr. J. K Kwakye, however was not the first to have associated Ghana’s economic struggles to the 2007 cedi redenomination.

Former President Jerry John Rawlings, while delivering his address during the June 4 uprising at the Revolution Square last month, attributed Ghana’s economic predicaments to the re-denomination exercise.

Speaking on Radio Gold’s current affairs Program Alhaji and Alhaji with Alhassan Suhuyini on Saturday, Bernard Mornah said in 2003, a year to a major election, the NPP led by President John Agyekum Kufuor ‘tinkered’ the Cedi.

“They wanted to reduce the bulkiness of the money. In particular the cost of transduction so that people will not have to carry so much," he noted.

In 2007 according to him, exactly one year to another major election, the NPP repeated the same move for the same reason. He added that indeed the redenomination was politically goaded.

He believed the exercise was only good for the upper-class down to the middle-class, in the sense that they will be able to carry huge sums of money in small bundles.

The PNC General Secretary further observed that if the upper and middle class were using their money to create jobs for the lower class, the incentive would have been high.

“But unfortunately for us, the middle to upper class are largely importers and consumers, creating jobs for the outsiders,” he lamented.

The large chunk of the Ghanaian society, in his view, has been disadvantaged by the redenomination exercise, adding that and only a few have benefited.

He argued that the mantra “the value is the same” is a palpable fallacy, explaining that “what ten thousand could buy yesterday, one Ghana can’t buy today... thus, the value is never the same."