Re-denominating of cedi to cost $400m?

Almost two months after the Governor of the Bank of Ghana announced the re-denomination of the cedi with effect from July 2007, neither Parliament nor the people of Ghana have been told exactly how much the grand rip-off is going to cost the tax-payer.

Strangely, it is only in Ghana under President Kufuor’s much-touted “good governance” mantra that the cost of re-denominating a national currency remains classified information.

Last week, the people of South Sudan, who are just about coming out of over two decades of war, announced the introduction of a new currency, the pound, to replace the dinar which they consider as an instrument of domination by the Arab central government in Khartoum over the South.

According to the Governor of the Central Bank of Sudan, the new currency which incorporates re-denomination will cover the entire country in stages. The first stage, the pilot phase, which covers only South Sudan, is to cost US$150 million.

The cost reflects the population of South Sudan as well as the size of its economy. South Sudan’s population was estimated at 8.5 million in 2005 and its income per capita, which is less than that of Sudan as a country, is estimated at under US$300. The economy of South Sudan is very rudimentary, thus limiting the extent to which money is used as a medium of exchange or a store of value.

If given the size of the population and the level of development of South Sudan, the pilot re-denomination under which one Sudanese pound is equivalent to 100 dinars, the current currency, how much is Ghana’s re-denomination exercise estimated to cost?

Ghana Palaver’s checks and cross checks with known international currency printers have confirmed that the re-denomination of the cedi will cost around US$400 million (3.7 trillion). The contract for the printing of the new notes has already been signed with De La Rue Company of the United Kingdom. Royal Mint Ltd, also of the United Kingdom, has been contracted to mint the new coins.

Why the Bank of Ghana and the Ministry of Finance have consistently refused to tell the people of Ghana how much the re-denomination exercise will cost remains one of the mysteries and mystiques of the Kufuor administration.