Who wants free money?

WHO WANTS FREE MONEY? GHANA CEDI IS GIVING AWAY MILLIONS

Benjamin Tawiah, London
Ante Paulina, the proprietor of the only African shop on Eastcote Lane, South Harrow, London, had nearly finished completing the money transfer form when she realised that she had used the old Pound-Cedi conversion rate. I am a regular Kenkey customer and the overprotective man of four sisters, as her lovely sales assistant has nicknamed me. They know how much I remit my sisters every month, because I have been very faithful to that commitment, as I am my tithe, which by principle I pay to three charities by direct debit, instead of my church. This time, however, Ante Paulina got it wrong. I had gone to send the pound equivalent of 6million cedis, to cater for the hostel accommodation of my little sister at KNUST. As if the intensive advertisement on the cedi redenomination meant nothing to us, we had forgotten that the new Ghana cedi is legal tender from this July. As we reminded each other that the Unity Link cedi exchange rate for 1 British pound was 1 cedi 85 pesewas (1.85), the new Ghana began to dawn on our poor Ghanaian-British souls. The day before, the exchange rate was a whooping 18, 372 cedis.

Well, it doesn’t sound like a bad economic development. Suddenly, small in Britain means small in Ghana, at least on face value. The corn dough years, where a pound was enough to pay the dowry on a beautiful Ghanaian born-again Christian lady, are over. The British pound rose like corn dough in Ghanaian banks. In very poor homes, £2 could last a family couple of days. From today, to save a million cedis in a Ghanaian bank account will be as difficult as paying for abortion services from church funds.


I am useless on economics and fiscal issues. If you noticed, I never wrote anything on the redenomination programme when the government announced it months ago. A few columnists did some very good work on it, including a Canadian based Ghanaian economist, who assessed the implications of the venture vis-à-vis other currencies. It was a very insightful piece of work that sought to point out that the redenomination does not position the value of the currency on a pedestal better than where it presently is.


The economist that I am not, I think the currency redenomination is a very good thing. There were jokes that our computers could not conveniently calculate the salaries of some big earners in the country, because the zeros were more than five crates of eggs. Today, there will be very few zeros at the back of the biggest per diem. Is it not refreshing that you can load your pocket with a few Ghana cedi notes to the bank, instead of hiring a taxi to cart ‘Ecolag portmanteaus’ packed with money? Efiawura suame, the ‘check-check’ travelling bag which has been christened ‘Ghana must go’ by Nigerians in the UK, because every Ghanaian traveller carries one, would now take a ‘monetary’ rest. It has served us very well over the years.


The year I came to the UK, a British tabloid had published what seemed to be global currency rankings and a rather fantastic analysis of the economic power of the world’s most popular currencies. The Ghanaian cedi was, predictably, at the bottom of the ladder with many others in Africa, just like our universities. Of course, I did not expect that our currency would be useful here, so I gave the remaining cedi notes on me to my friends who saw me off to the Kotoka International Airport. I also gave away my Bible; that explains why I am still suffering in this part of the Jordan after many years. I was determined to make a lot of money, to return home a successful student burger. I had saved a thousand pounds in a few weeks. I armed myself with the money to Comet, a big electronic store in the UK, to purchase my first electronic asset-a laptop. The money, which had been pompously packed into my wallet, added a bit of flesh to my flat bottom as I swaggered joyously to the shop, like no Bill Gates’ business. So, when the salesmen at Comet asked me where I got such a big amount of money from, I was completely taken aback. Who asks such stupid questions in Ghana? In Mobutu’s Zaire, it was rumoured that folks carried money in sacks to buy food. I had worked hard for my money and if the money was legal tender, all a salesman need do is take it and count it (or read it in Shamo Quaye fashion) and get me my goods. I would later come to understand that a buyer does not carry sacks full of money to shops in the West.


The British pound is respected very much around the world, but perhaps, it is revered by the British themselves more than anybody else. The biggest denomination of the British Pound, 50, is very rare. I have lived here for five years and I have had the pleasure of feeling that denomination in my palms on only two occasions. The banks issue it to customers only on request; otherwise, the smaller denominations are good enough for anything. Like the stores, the banks are careful when a customer presents two thousand pounds to the cashier for his savings account. They always ask where you got the money from. In the same way, the branch manager has to necessarily authorise the withdrawal of more than a thousand pound by a customer. The money is not just an economic power; it is a symbol, and a national treasure which must be respected.

If Pat Thomas were British, his song-Sika ye mogya-would still have made sense. There are very spenders here. Musician Mrs Elton John (I hear he is the woman in the gay relationship he has with partner David Furnish) spends nearly a million pounds on flowers every year. David Beckham’s eldest son, Romeo, wears a £6,000 wrist watch. A million pound is a lot of money; you need to be a millionaire to get that kind of money. Until this July, you didn’t need to be a millionaire to get three hundred million cedis in Ghana. If fact, you could have a billion cedis savings, but that didn’t make you a millionaire, let alone a billionaire in Kufour’s Ghana.


Now, it appears you would have to be a billionaire to get a billion Ghana cedis in Ghana. The richest person in the UK, steel magnate Mittal, is worth some £15billion. I don’t know how much that translates into the old cedi currency. The richest person in Ghana would be worth trillions or quadrillions (24 zeros), yet we don’t have billionaires or ‘trilonnaires’ in that West African country; we only have a few millionaires, including Azumah Nelson and Alhaji Asomah Banda. It is interesting that most of these rich people quote their worth in pounds sterling and dollars. They know the cedi make them look like financial gods and goddesses.


So, what do we stand to gain from the cedi redenomination? The exercise would afford Ghana some international reputation. I would feel very proud telling an English man that a British pound translates into 1.85 Ghana cedis than 18,372 cedis. I have been asked time without number by many a British, how much a few hundreds of pounds will be in Ghana. They instantly assume instant millionaire status when you do the conversation for them. I have a met a few failures here who think they are guaranteed a life of luxury if they go to live in Africa. When they see you working very hard, they are quick to ask whether you would be able to spend your millions when you go back home. When you tell them that those back home have a lot more, and are perhaps better off, they find the whole equation a load of economic bullocks, as they are wont to say.


Users of the currency will also have some confidence in its value. An international investor, who knows that his country’s money does not translate into trillions in an investor country, would not think low of that country’s economic management. He doesn’t come to steal, kill and destroy like the devil; he comes do business with people who matter, because their currency matters. In the same way, a Ghanaian businessman may be appreciated by business partners abroad when they know the worth of his country’s currency.


The other good thing is the printing cost that the new Ghana cedi would save us. If we needed 5,000 fresh notes of the old cedi to make 100million in the 20,000 denomination, today we will need a lot less. That saves the Bank of Ghana time, resources and energy. Counting of money will not take eternity at the banks, because you only need a few thousands to build a house, instead of hundreds of millions. That will also mean shorter queues at the banks, which would make way for effective relationship banking.

As it should be, the old cedi will be used side by side the new Ghana cedi, which is still in its honeymoon period. Banks will reserve the new Ghana cedi for customer withdrawals and continue to receive payments in the old cedi. Banku sellers will have to learn to trade in the old and the new notes and coins with some difficulty. Of course, it would not be very smooth initially; but it will not be as difficult as changing from driving on the right side of the road to the left. We survived that years ago, didn’t we?


In all these, however, we know that the value of the cedi currency in relation to others has not gotten any better. Mr Botwe, a newly employed banker in Ghana, receives a handsome 19million cedis as monthly salary. He could do a lot of things with it, and he tells me on phone: ‘‘It is more than enough for me; I can buy anything here. I can afford a life of relative luxury on my salary.’’ Today, the redenomination will mean that he would take home some 1,900 Ghana cedis. In value, that is not bigger than 19million, because it will do the same things he used to do with the previous millions. However, the new salary would give him a sense of value, at least when compared with other currencies.


Refreshingly, many Ghanaians these days think above the socio-political dynamics of national economic management. While it is appropriate to credit the NNP government for the initiative, it is important to think of this as a national achievement. The campaign on the introduction on the Ghana cedi was almost exhaustive. Everybody, including those of us in the west, heard and read about it. All is well that ends well. Well, as you like it.