Statement On The Re-Denomination Of The Cedi

On behalf of the Committee for Joint Action (CJA) I wish to welcome all of you to this press conference designed specifically to enable us share our ideas on the re¬-denomination of the cedi with the media.

The Bank of Ghana which is clothed with the proper responsibility for monetary policy issues including a re-denomination of the currency has stated that the proposed re-denomination of the cedi slated to be operative as from July 2007 is to knock off four zeros from the currency such that the present ¢10,000.00 will be equivalent to the new GH ¢1.00.

The Bank of Ghana has insisted in its public education programme that the real value of the cedi will not change with the re-denomination exercise and that a new GH ¢1.00 will buy what the old ¢10 000.00 buys in all transactions.

The main advantage of the re-denomination exercise according to the Bank of Ghana is that of portability - that is it will be easier to carry large amounts of the cedis around.

Surprisingly, the Kufuor Administration is trying very hard to turn this purely administrative economic measure into a huge propaganda blitz bordering on a deliberate lie. At the NPP national conference in Koforidua, on the 6th January 2007, President J.A. Kufuor claimed that as a result of the prudent management of the economy, the value of the cedi has so appreciated that by July this year, the cedi will exchange for the dollar at a rate of one to one. This claim is false because what will exchange with the dollar at a rate of one to one is not the cedi currently in circulation but a new Ghana Cedi to be introduced in July this year. Indeed one new Ghana Cedi will be the equivalent of ¢10,000.00 and if the President's claim is accepted it will even show a slight devaluation of the cedi against the dollar.

The Committee for Joint Action (CJA) knows that the strength of any currency is dependent on the level of production and productivity in the given country. It is indeed strange that at a time when the country is undergoing power curtailment, when potable water is unavailable even in urban centres and where many industries have collapsed or are collapsing, the Kufuor administration is claiming that the economy has so improved and become so strong that the cedi has been strengthened.

Ladies and Gentlemen of the Press, if all it takes to strengthen the cedi is to knock of a few zeros, then why did it take the Kufuor administration six years to do that? Why didn’t it knock off five or even six zeros so that $1.00 would be equal to either 10 pesewas or 1 pesewa?

The timing of the re-denomination exercise is also a matter of grave concern to us. This is especially so when the Bank of Ghana had announced that Ghana is to join the Eco currency zone in 2009. Indeed, we are unable to understand the rush to re-denominate the cedi and the huge expenditure in printing new currency notes only to join the Eco in a matter of only two years.

Ladies and Gentlemen of the Press, the handling of the re-denomination exercise has also left much to be desired. At the time when the Governor of the Bank of Ghana went before Parliament to defend the exercise, he could not even provide an estimate of how much it would cost to print and circulate the new currency or the cost involved in educating the Ghanaian populace on this re-denomination exercise. He also failed to explain why such a major policy issue had not been captured in the 2007 budget presented to Parliament by the Minister of Finance, Mr. Kwadwo Baah-Wiredu in November 2006.

The Bank of Ghana and the Banking Community are using currency portability as a major reason for the re-denomination exercise. But there are various means of achieving portability without re-denomination. The increasing use of cheques for transactions and the introduction and mass use of credit cards could also achieve portability without full blown re-denomination.

The Committee for Joint Action (CJA) is convinced that the Kufuor administration is resorting to such cheap propagandist enterprises, because it has failed to deliver on its promises to the people. In the manifesto presented to the people of Ghana for the 2000 elections, the NPP promised to create 100,000 jobs in 3 months of the assumption of power, they promised to curb rice imports which was then estimated at US$ 120,000, 000 per anum (the figure has now jumped to about US$ 450,000,000 per anum). They promised to abolish the cash and carry system operating in the health sector. They promised to boost local production of poultry. None of these promises and other such promises have been kept and the masses are legitimately raising questions about the mandate they gave the NPP and President Kufuor. Instead of addressing the felt needs of the masses, the NPP and Kufuor have again resorted to peddling falsehoods and raising false expectations.

The CJA renews its pledge to continue struggling alongside the people of Ghana against social and economic hardship and for greater public accountability.

Thank you for coming and you may now ask questions.

…………………… Bernard Mornah For Committee for Joint Action January 17, 2007

COMMITTEE FOR JOINT ACTION (CJA)
C/o P. O. Box NT 272, Accra-Newtown, Accra/Ghana