Mutilation of bank notes costs Ghana ?3bn a month

The Bank of Ghana (BOG) spends about ?3bn a month to replace bank notes that are mutilated by poor handling practices such as tearing, crumpling, frequent folding, burning and soiling with dirt, oil and other fluids.

From January to August this year, the bank destroyed ?128.9m mutilated notes of various denominations, the equivalent of ?244.3bn.

In an interview with the Ghana News Agency (GNA) to throw more light on the issue, Edward Ofei-Bekoe, Head of the Issue Department of the Central Bank, explained that about nine million bank notes, which have been in circulation for up to six months or a year, were withdrawn every month as a result of mutilation.

He said the situation was of serious concern to the Bank because the three billion cedis spent to put fresh notes into circulation could have been saved and paid into the Consolidation Fund for socio-economic development.

It is a criminal offence to mutilate money in Ghana. However, there have hardly been arrests and prosecutions to deter members the public from the practice. Economists say three billion cedis can build 10 primary schools for some deprived communities, a clinic for some villages, a 400-bed hostel for a university or help equip the Police to protect life and property.

Ofei-Bekoe explained that mutilated notes cease to be legal tender because they lose their security features as a result of being badly torn, partially burnt, too soft and light, dirty or defaced. That is why they are withdrawn from circulation and burnt.

He, therefore, advised Ghanaians, particularly, cooked food sellers, traders, drivers and mechanics to cherish their cedi notes and preserve their freshness so as to increase their lifespan. "We must desist from crumpling our notes and handling them with wet and dirty fingers," he cautioned.

Ofei-Bekoe said keeping the bank notes in obscure places, under beds, in dirty environments and on certain parts of our bodies, such as the private parts, also mutilated them.

On measures being taken by the Central Bank to educate Ghanaians on the consequence of mutilating the notes, Ofei-Bekoe said a massive campaign to be embarked on before the introduction of the 10,000 and 20,000 cedi denominations would address the issue.

Already, the Ladies Association of the Bank has a programme, "Keep the Cedi Clean," that educates, especially traders at various markets, on the proper handling of bank notes.

Asked why the wide use of credit and debit cards to minimise cash transaction would not be promoted as a better option, Ofei-Bekoe said though the banks favoured this choice plus the use of cheques, they were finding it difficult to have their clients to adopt them.

"Using cheques for transactions is much easier and faster for the banks, but the lack of trust among business partners in dealing with genuine cheques has discouraged the reliance on cheques," he said.

He added that lack of technology in monetary transactions mostly in the rural areas also made it difficult to use card machines and cheques. Ofei-Bekoe, however, expressed optimism that cards and cheques would gradually replace cash transactions as socio-economic development progressed with the introduction of new technologies.