Ghana's Weak Currency Problematic for Business

In Ghana, doing business in the local currency has become increasingly risky and time-consuming, amid spiraling inflation. As the cedi has lost value over the years, Ghanaians have been forced to carry more and more bank notes. For VOA, Efam Dovi in Accra reports, that presents a major challenge for businesses and the public in a country where virtually every transaction is done in cash.

There are dozens of customers waiting in line at a local branch of an international bank. Customers withdrawing cash, carry it in bags, because the large amounts of money required will not fit in any wallet.


Chris Ardayfio is a business man who traveled two hours into town, accompanied by a security officer, to deposit the equivalent of $27,000. He is carrying the money in a large nylon sack, the size of a medium suitcase, which he drags along the floor, as he moves forward in line.


Ardayfio says he has been waiting for over an hour. Eventually, he makes it to the cashier and the counting starts.


It is another hour before the transaction is completed, and Ardayfio is clearly frustrated.


“We wasted about two hours also here,” he said. “It’s because of the amount of money involved.”


This customer, Okain, says he uses the ATM machine, but the fees pile up, because it’s necessary to make multiple withdrawals to get enough cash.

“The minimum I take is the maximum allowed by the bank - that is two million cedis per daily transaction [$228],” he said. “The process they have over here, you have to do it three times to get to the two million, and each transaction, they charge you for it. So, it’s like scheming from us, the customers. That is the way I see it.”


Last week, Ghana’s government announced plans to re-value the cedi by knocking off four zeros.


Okain says he likes the idea, but says the government should focus on moving the economy toward electronic transactions, so it is less reliant on cash.


“Well, it is good, if I don’t have to carry large sums of money on my person,” he said. “But I would rather prefer they [government] focus on automating transactions, payments and so on, using credit cards and other debit cards for payment, making that very pervasive in the society.”


Analyst Joseph Abbey heads the Center for Policy Analysis in Ghana. He says, one of the biggest problems Ghana’s economy faces is the cost of doing business. He says there are gains to be made, if the currency is re-valued.


“You can do your business a lot faster, and, if these efficiency gains - because you reduce transaction time - if these efficiency gains can be translated into productivity, then this can itself place on the economy of Ghana great benefits,” he said.

According to Abbey, the cedi was a little stronger than the U.S. dollar when it was issued some 40 years ago. Today, one dollar brings 9,500 cedi, one of the worse exchange rates to the dollar, on the African continent.


Abbey attributes the situation to government over-spending and mismanagement over the years.


“If you are a sovereign country, and you have the power to just print the money and use it, then you find that you have just diluted the currency,” he said. “And, that is what has happened.”


From July next year, new cedi notes, called Ghana cedi, and coins, called pesewa, will be in circulation. One new Ghana cedi will be equivalent to 10,000 of the current cedis. This will be the third time in the country’s history that the currency has been re-valued.