Kufuor’s gov’t messed up Ghana’s economics with redenomination

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Prof 9 years ago

You are an illiterate, currency denomination has nothing to do with economic hardships if the economy is stable. Stability of the economy means prices of goods are stable. The stability will base on government spending. If th ...
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You are an illiterate, currency denomination has nothing to do with economic hardships if the economy is stable. Stability of the economy means prices of goods are stable. The stability will base on government spending. If the government spends more than what he receives for the country, why do you put the blame on currency denomination?
SARPONG 9 years ago

Did that illiterate writer pass his jss mathematics? How do you get 60 pesewas for 6000 old Ghana cedis if 1000 old Ghana cedis is exchanged for one new Ghana Cedi?

Now every illiterate fool can post a trash here in the na ...
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Did that illiterate writer pass his jss mathematics? How do you get 60 pesewas for 6000 old Ghana cedis if 1000 old Ghana cedis is exchanged for one new Ghana Cedi?

Now every illiterate fool can post a trash here in the name of an article.
Ekow Essamuah 9 years ago

This is what get when Goats and Cows are furnished with free laptops at the expense of the taxpayer. Even the incestuous Trokosi Pigs or KOOKOASE Black monkeys will not write such stupid stuff for publication. Only Savanna Co ...
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This is what get when Goats and Cows are furnished with free laptops at the expense of the taxpayer. Even the incestuous Trokosi Pigs or KOOKOASE Black monkeys will not write such stupid stuff for publication. Only Savanna Cows and Goats are culpable of such nonsense.
kb original 9 years ago

Hello Sarpong, it looks like you have forgotten or you got it all wrong. The redomination was 10000 to 1 cedi. It was four zeros that were knocked off and not three zeros. The writer's analogy is correct. 6000 cedis should ha ...
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Hello Sarpong, it looks like you have forgotten or you got it all wrong. The redomination was 10000 to 1 cedi. It was four zeros that were knocked off and not three zeros. The writer's analogy is correct. 6000 cedis should have become 60 pesewas.
SARPONG 9 years ago

"A gallon of petrol was selling for 6,000 cedis before the redenomination should have been sold for 60 pesewas after that but it stood as 6 cedis representing a 1,000,000% increase in prices"

ABASS IS A LYING IDIOT. PETROL ...
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"A gallon of petrol was selling for 6,000 cedis before the redenomination should have been sold for 60 pesewas after that but it stood as 6 cedis representing a 1,000,000% increase in prices"

ABASS IS A LYING IDIOT. PETROL NEVER SOLD FOR 6000 GHANA OLD CEDIS A GALLON IN 2007. EVEN SAUDI ARABIA COULD NOT HAVE SOLD PETROL AT THAT PRICE, 6000 GHANA CEDIS AT THE TIME AN EQUIVALENT OF 30 USA CENTS.

Petrol was sold in May 2007 at a price of 8858.74 per liter. You need 3.785 liters to make a gallon so multiply 8858.74 times 3.785 and you get 33,530.33 old Ghana cedis or 3.350 New Ghana cedis at a time a barrel was selling at $128.

In December 11 2008 when NPP was about to hand over power to NDC, a gallon of petrol was selling in Ghana at GH¢3.15 when a barrel of petrol was still selling at world market for $134.

YOU CAN CHECK THE BELOW INFORMATION ON GHANAWEB PORTAL.

Business News of Thursday, 11 December 2008

Source: Story by Isaac Yeboah

Petrol price slashed 17%

The National Petroleum Authority, (NPA), has announced a 17.17 percent slash off the price of petrol in Ghana, effective Friday morning.

The authority’s Chief Executive Officer, John Attafuah was on national television, GTV Thursday night to announce the ‘Christmas present’ to Ghanaians and explained that the reduction brings a gallon of petrol to “GH¢3.15 per gallon or ¢31,500 in the old currency.”

General News of Friday, 4 May 2007

Source: --

Fuel prices go up again

General News of Friday, 4 May 2007

Source: --

Fuel prices go up again

New petroleum prices will be released with effect from today to reflect the rising cost of crude oil on the international market.

The new prices, which come barely a month after the prices were adjusted by the National Petroleum Authority (NPA) and the oil marketing companies (OMCs), will see premium petrol move up from ¢8,202.54 per litre to ¢8,858.74, representing approximately eight per cent increase.
Nii Teiko 9 years ago

Some JSS lessons in rates and percentages can save this illiterate goat from dying in his lunacy. You see insulting people is not good but when common sense is defy to produce such nonsense for consumption, one has no option, ...
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Some JSS lessons in rates and percentages can save this illiterate goat from dying in his lunacy. You see insulting people is not good but when common sense is defy to produce such nonsense for consumption, one has no option, then, than to Crack the whip. With all due respect,this writer is certainly not just a goat but a big Billy Goat.
Kwabena Yeboah 9 years ago

All redenomination exercises are not supposed to increase the true value of the currency without support of strong macroeconomics variables in the areas of balance of payments, inflation, unemployment rate, per capita GDP, b ...
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All redenomination exercises are not supposed to increase the true value of the currency without support of strong macroeconomics variables in the areas of balance of payments, inflation, unemployment rate, per capita GDP, budgetary surplus and of course strong fiscal policy. In fact the redenomination exercise became possible after the Kufuor's administration lost the battle to curb inflation - yes, inflation was the main reason for the redenomination of the cedi.

Now, the question you should ask yourself is that, how come the currency of a highly inflationary economy was set at 0.95 Ghana cedi to $1, soon after redenomination? Which means, those who exchanged $1 to the cedi soon after the 2007 redenomination got GHc1.05. How could a poorly managed economy with high inflation and abysmal fiscal policy sustain $1=GHc1.05 exchange rate. There was no macroeconomic basis for 'pegging' the cedi at 0.95 to $1. I have always argued that, instead of shaving off 4 zeroes, the wise approach for Bawumia and his people would have been to shave off 3 zeroes.

After Nigeria's redenomination of the niara, the US dollar value of the niara remained under a 3-digit figure, usually between N125 and N145 to $1 in the two years since redenomination. For pegging the 0.95 cedi to $1, the value of the cedi became the highest value currency unit in the whole of Africa. In currency trading soon after the redenomination, a cross trade market rate, GHc1.00 exchanged for N130 (niara) while US$1.00 exchanged for GHc0.9214, putting Ghana's cedi in a much stronger position than the niara.

In June 2006, a Ghanaian trader needed 502.13 old Ghana cedi to exchange for $1. So what happened between June 2006 and July 2007 to convince Bawumia and his people at the bank that setting the cedi at 0.95 to $1 was a snart idea? Yes, they could fool the largely ignorant population in Ghana but not currency traders. Because soon after the redenomination of the cedi, and after pegging the cedi at 0.95 to the $1, the cedi began its downward spiral. And sensing calamity unfolding before their naked eye, Bawumia and Paul Acquah surreptitiously started shoring up the falling cedi by selling off the much needed US dollar reserves. This is a fact, and anyone can go to BoG website and see the trading activities of the bank.

Redenomination by itself should not bring hardship, the question you should ask Bawumia is why shave off 4 zeroes, why not 3 zeroes as Nigeria wisely did? And what was Bawumia's rationale for pegging the cedi at 0.95 to $1, and not 501.13 to $1? The cedi went into a free fall as there were no macroeconomic variables to support to support the whimsical redenomination policy.
Kwabena Yeboah 9 years ago

The truth is that, Mahama and more so African leaders do not have the common sense in governing a country. A small economy like Ghana cannot run a budget deficit year after year and not expect the cedi to suffer. Yes, Kufuor ...
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The truth is that, Mahama and more so African leaders do not have the common sense in governing a country. A small economy like Ghana cannot run a budget deficit year after year and not expect the cedi to suffer. Yes, Kufuor screw up the economy with redenomination of the cedi, and Mill/Mahama nailed the coffin with unscrupulous budget deficits. The Finance Minister, Kwabena Duffour, was responsible for the largest budget deficit in our history. Notwithstanding the inflow of oil revenues, this dude run the budget deficit to unprecedented 12% of GDP and almost doubled Ghana's debt.
SARPONG 9 years ago

What would the shaving of three zeros have done to stop the free fall of the cedi you want your readers to believe? For the two years that Npp was in power after the redomination, the Cedi lost 8% of its value.

When Npp w ...
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What would the shaving of three zeros have done to stop the free fall of the cedi you want your readers to believe? For the two years that Npp was in power after the redomination, the Cedi lost 8% of its value.

When Npp was leaving office in 2009, the exchange rate was GHana1.12=$1.00 and you call that as a free fall? What did the writer write that was true?

1. That the cedi was devalued 1,000,000%?

2. That petrol was selling at 6000 Ghana cedis a gallon?

3. That petrol should have been sold at 60 pesewas a gallon?

I have given you facts that you could have verified about my response to the writer and you refused to comment on my response and went off the issue at debate.

How could you even say Kufuor and Npp were losing the inflation war when they had reduced inflation significantly from the 42% Railings bequeathed to them in 2000 to 16% in 2007 when the redomination was done?

The main reason for redomination in 2007 was not to fight inflation but rather for easy accounting purpose and secondly reduce the bulkiness. Don't we all remember how we use to carry these cedis in paper bags?

Kwabena, I know you are not a fan of Kufuor or Npp but for your intellectual integrity, a little truth will not hurt.

Kufuor left a healthy economy in 2009 to Ndc and even Ndc Finance Minister Leavens Dufuor wrote the world bank and IMF that Ghana's economy was in great shape in 2009.

The redenomination of the cedi in 2007 should not be blamed for the bad economy of Mills/Mahama ndc governments.
Nii Teiko 9 years ago

Ghana Is dying,not because of the cedi redenomination but for excessive borrowing, massive corruption and *mad* bad governance of the sitting incompetent president. Though i think enough education and brainstoming activities ...
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Ghana Is dying,not because of the cedi redenomination but for excessive borrowing, massive corruption and *mad* bad governance of the sitting incompetent president. Though i think enough education and brainstoming activities did not go on before the redenomination exercise, i do not see why knocking down mere zeros could have promoted inflation, especially as the monetary value of good and service were suppose to remain same either way. For example, a ball of Kenney that was sold for 1000.00 old cedis was supposed to go for 1.00 new ghana cedi; much the same way, a teacher who was making,say, 500,000.00 bucks a month for his service to mankind was supposed to make 500.00 under the new system. Nothing has virtually changed.

There was the need for the government to ensure some kind of Price control system to monitor and stop traders from manipulating the system to their advantage. For instance, it took the uninformed and the least educated greedy trader to maximize profit by illegally adjusted prices of stuff. For instance, stuff that sold at say,1800.00 old cedis was sold at GH2.00 instead of GH1.80( ie. Gh1.00 and 50pesewas). The Ghanaian traders were not comfortable with re-emergence of pricing in COINS which was lost in the system some two decades ago due to bad governance of the Trokosi led PNDC/NDC incompetent regimes.
With this development I do not see why Kwabena Yeboah, the self proclaimed Nkrumahist, cannot blame the Trader for the price hike - which these people erroneously referred to as inflation - but, instead, tried to pin it down on the much competent Kuffour led administration, after the later had tasked the one and only one economic prophet on the land , his visionary competence, Dr. Alhaji Mahamadu Bawumia, to do such yeoman's job for the good people of Ghana. Is this not that simply for a standard-seven people to understand?

Kwabena Yeboah 9 years ago

In having an intelligent discourse in the affairs of the nation, I expect intelligent people to keep their emotional vituperation in check before coming to the table. And if you do not have the intelligence to understand my p ...
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In having an intelligent discourse in the affairs of the nation, I expect intelligent people to keep their emotional vituperation in check before coming to the table. And if you do not have the intelligence to understand my posting, you must as well go back and read it several times before making a comment.

My comment was that, redenomination of currency under normal circumstances should not have any negative effect on
any nation's economy. My substantive question is: why should Bawumia and his people at the bank pegged the cedi to 0.95 to $1? Are you smart enough to understand macroeconomics implication of this action? I suppose you are a standard-seven pupil and are having difficulty comprehending all these macroeconomics jazz.

In case you are not adept at international finance, the redenomination was not done for the benefit of Makola women alone. It was also for the currency traders, and your 'competent' Bawumia has brains and knew what he was doing, he would have thought of arbitrageurs, because you what bozo, as soon as the 'competent' Bawumia set the cedi to 0.95 to $1, the arbitrageurs started dumping the cedi. Ask yourself why your smart Bawumia started shoring up the cedi by selling millions of US dollars to buy up the cedi soon after redenomination.

Just frequenting this website occasionally, I have concluded in my observation that it is sheer ignorance and stupid that are destroying this country. I am all for the re-education of the Ghanaian, because our people have lost their ability to think.

One thing that keeps me awake at night is the prospect of Akuffo Addo winning the election this year and turning Ghana's economy over to Bawumia, or Akuffo Addo dying in office and Bawumia becoming the substantive President, just as we are cursed with Mahama as President after the demise of Atta Mills. I guess the ignorant and shortsighted Ghanaian has not thought of this prospect.
Kwabena Yeboah 9 years ago

My friend Sarpong, you can accuse me of anything but not integrity. I am being paid to be objective in my assessment of issues/event - that is my training.

Mr. Kufuor's second term of office came to a close in November 200 ...
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My friend Sarpong, you can accuse me of anything but not integrity. I am being paid to be objective in my assessment of issues/event - that is my training.

Mr. Kufuor's second term of office came to a close in November 2008, and at the time of leaving office, the cedi had depreciated against the three core currencies: US dollar by 15.8%; Euro by 14.0%; and the pound sterling by 6.2%. This report is not IMF or World Bank report, it is BoG's own report. The question then becomes: why was the cedi redenominated in July 2007 and experienced free falling in 2008?

There are two main reasons. one probable reason is the behaviour of arbitrageurs. They knew instantly the cedi was pegged at 0.95 to $1 that the buy/sell rate was not sustainable and started dumping the cedi. Sarpong, are you not surprised that soon after redenomination, the cedi became the highest valued currency on the continent; more than the rand and niara? Is that the purpose of redenomination?

At the time of redenomination, Ghana's inflation stood at 16.7%. Sarpong, this is huge anyway you slice it. Western economies cannot tolerate 3% inflation rate in their well oiled economies let alone 16.7%. Can you imagine what 16.7% inflation rate would do to the US dollar? Every article I read(IMF, World Bank, Forbes, Oxford University Press/Journal) attributes Ghana's redenomination to inflation. I think you know that one reason currencies depreciate is because of inflation, and Ghana has always battled with inflation.

Yes, you are right, I am not a fan of Kufuor, neither am I fan of Mahama nor Rawlings. They have all let our people down - none of these leaders put Ghana first. My preoccupation is Ghana and I love people who put Ghana first - people like Dr. Kwame Nkrumah, Dr. Kofi Abrefa Busia, and Hilla Limman. These men were selfless and dedicated for the cause.

I wish you well, Sarpong!
Brian Williams 9 years ago

This article is not worth responding to. I will frown on it with flatulence indignation.

This article is not worth responding to. I will frown on it with flatulence indignation.
Charles Agbenu 9 years ago

Writer sounds silly and elementary. He has served a Foolish stuff which the hungry fishes in the Keta sea and antelopes in Gonja forest will hurriedly reject.

Writer sounds silly and elementary. He has served a Foolish stuff which the hungry fishes in the Keta sea and antelopes in Gonja forest will hurriedly reject.
Sir Ericus 9 years ago

thank you very much for the information. I now know why. then prz Mahama has really done a good job.
I will give my vote to JDM.

thank you very much for the information. I now know why. then prz Mahama has really done a good job.
I will give my vote to JDM.
Osu Klottey 9 years ago

Nonsense article,100 shouldn't not be called one million 1.000.000,where were we running to ? Nonsense foolish and foolish man Rawlings,

Nonsense article,100 shouldn't not be called one million 1.000.000,where were we running to ? Nonsense foolish and foolish man Rawlings,
peter 9 years ago

Smarttey Ameri bus branding wayome did not huv any negative effect on the economy rgt

Smarttey Ameri bus branding wayome did not huv any negative effect on the economy rgt
koo 9 years ago

Can someone pls explain the economics of devaluation of our cedi whatever is called

Can someone pls explain the economics of devaluation of our cedi whatever is called
Kuduru jafo 9 years ago

Your own John Mahama Defended the redenomination on TV3. He said he had no problems with it becos the Turkish govt had done the same with the Lira.Check the facts

Your own John Mahama Defended the redenomination on TV3. He said he had no problems with it becos the Turkish govt had done the same with the Lira.Check the facts
Ebo Letrik 9 years ago

This joker wants the Cedi to degrade to the level of the USELESS Zim currency!

This joker wants the Cedi to degrade to the level of the USELESS Zim currency!

samuel villa 9 years ago

Npp and its unethical,unapatrotic,subversive, illiterate,ignorant foolishly ,criminally inductriminated by their devilmaster,Nana Addo,the certificate less laser,who should have been languishing in jail for impersonation. whe ...
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Npp and its unethical,unapatrotic,subversive, illiterate,ignorant foolishly ,criminally inductriminated by their devilmaster,Nana Addo,the certificate less laser,who should have been languishing in jail for impersonation. where on earth will such a bizarre character like Nana Addo be allowed to walk freely to destroy our only nation Ghana? sadly Nana Addo myopic desperation to be the first irresponsible president of Ghana is sheeply endorsed by irresponsible intellectuals such as yaw osafo m,Nana o boahen,bawumia and the whole leagion that might have sucked Nana Addo,s anus.
BBC NEWS!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 9 years ago

Fool

Fool
Prof. Issifu, UK 9 years ago

Whoever wrote this article is damn illiterate with no understanding of economics! Ghanaweb needs to do a better job by screening articles! In fact from where I stand this article is garbage.

Whoever wrote this article is damn illiterate with no understanding of economics! Ghanaweb needs to do a better job by screening articles! In fact from where I stand this article is garbage.
tiger 9 years ago

Well said.i hope npp folks are paying attention.One Person responsible for this mess the former bog vice chair who claims today to be the best Economist mr pinksheet bawumia left a legacy that Prices in ghan are still quoted ...
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Well said.i hope npp folks are paying attention.One Person responsible for this mess the former bog vice chair who claims today to be the best Economist mr pinksheet bawumia left a legacy that Prices in ghan are still quoted in two different currencies.
BlackMan5 9 years ago

All you guys criticizing Abass are the idiots who have been blinded by their support for the NPP. Your criticisms show your ignorance in Economics. I'll be presenting a piece very soon detailing how Kuffour and his cohorts de ...
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All you guys criticizing Abass are the idiots who have been blinded by their support for the NPP. Your criticisms show your ignorance in Economics. I'll be presenting a piece very soon detailing how Kuffour and his cohorts destroyed the economy by"making Ghanaians HAPPY" with bogus economics which was diversionary in nature while he and his gang engaged in the most notorious looting of the coffers. Examples: The agreement with COSMOS; the gift of $35m to Asantehene and the Okyehene which was a loan to develop 33 Traditional Areas. This has become part if the National Debt.
Wofa Yaw Avudrinyaga..... avudortor m 9 years ago

This is the BIGGEST joke of the Year.
Rawling devalued the Cedi in 1984 from 2.75 to 30 for $1 and that was 1090. 9%. By 2000, the exchange rate was 7,000 to $1 and that was 254545.45%.
Kuffour made the redenomination beca ...
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This is the BIGGEST joke of the Year.
Rawling devalued the Cedi in 1984 from 2.75 to 30 for $1 and that was 1090. 9%. By 2000, the exchange rate was 7,000 to $1 and that was 254545.45%.
Kuffour made the redenomination because our productivity was low and we need more notes to pay for few goods. My net is C4,315.22 and you want me to go to the bank to cash C43,152,200? Even under Kuffour my salary would have been $4,315.22 but under Mahama it is a mere $1166.27 and you want me a lecturer to swallow this scrap of yours. Mahama is a failed President in all aspect since he is in the NDC, because they don't have the expertise to rule. They are apprentice rulers. PERIOD!!!!
sam de sam 9 years ago

keep quite this is the bare fact. ur lliteracy is nothing if u don't know this fact.

keep quite this is the bare fact. ur lliteracy is nothing if u don't know this fact.
Obiba 1 9 years ago

Please oh who is dat imbecile dat wrote dis useless n baseless article here for us to read, mr writer please if you don't have anything good to tell Ghanaians den please shut de hell up. U n ur incompetent Mahama has destroye ...
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Please oh who is dat imbecile dat wrote dis useless n baseless article here for us to read, mr writer please if you don't have anything good to tell Ghanaians den please shut de hell up. U n ur incompetent Mahama has destroye dis nation and U want us de youth whom U av neglected to create jobs for want us to vote for NDC tweaah over my dead body....... Never will I even dream of voting for Mahama.........

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Kufuor’s gov’t messed up Ghana’s economics with redenomination

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