Cedi - 5th most unwanted in the world

Cash Money

Fri, 13 Apr 2007 Source: Statesman

News that your country's cherished medium of exchange is ranked 5th in the list of 26 least valued currencies in the world will most likely cause you to choke on your latest swallow of the Kenkey you are eating.

But according to an official of the Bank of Ghana, that is exactly the 'high" regard in which the cedi is held. Speaking at a forum at Takoradi on Wednesday, a member of the re-denomination steering committee of the Bank, Benjamin Amoah, said factors like over stretching of the payment system has not only rendered the country’s currency unattractive but also reduced its quality as a store of value, a situation which calls for a change.

Losses from cash withdrawn from banks as well as miscalculations over the many zeroes after the principal sum have also reduced the attraction of quoting international transactions in cedis.

Further, the country’s reliance on huge amounts of physical cash for the transaction of business, sometimes requiring the use of sacks and polythene bags was a definite turn off, hence the need to re-denominate the currency.

Dr Amoah was speaking at a forum organised by the Ghana Shippers Council to discuss the impending re-denomination of the cedi and its impacts on business transactions for the business community in the Western Region at Takoradi.

It was also to shed more light on payments associated with transactions such as Value Added Tax, the National Health Insurance Levy, customs duties and interest rates.

Dr Amoah said the bank was taking advantage of the current stable macro-economic environment, manifest in falling rates of inflation, relative price stability, strong Gross Domestic Product growth, stable exchange rates and an increase in Gross International Reserves to implement the re-denomination.

He emphasised that unlike the situation in 1979 when many Ghanaians lost huge sums of money as a result of the de-monetisation of the cedi , no monies would be lost in the July re-denomination since "the value is the same."

He cautioned, however, that the new system’s continued success would depend to a very large extent on the level of discipline among individual Ghanaians and the government in particular, particularly inflation control.

Outlining some benefits of the re-denomination to the business community, especially importers and exporters, as reduction in value of cash holdings in cross border trades, the Chief Executive Officer of the Shippers Council, Kofi Mbiah, said it was important for such businessmen to have a full appreciation of the change to expedite their transactions.

He noted that even though a good number of businessmen are aware of the eminent redenomination, many of them have not really come to terms with the impact of the change on their businesses. The council has thus posted relevant information on the impending change on its website, he said.

The Executive Chairman of Ghana Community Network, the company that is networking the country’s borders and entry points with its GCNet system, Nortey K Omaboe, assured that his company was ready to help make the necessary switch to the new currency.

The participants, during an open forum, called on the Bank to intensify its education on the re-denomination at the grassroots, targeting the illiterate population and market women.

Source: Statesman
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