8 January 2007, by Nana Kofi Acquah in Accra, Ghana. "Ghanaian Hospitality". Have you ever experienced that? When you do, it would make you feel generous, and that"s where you"d have to be careful because you could be giving out far more than you intend. The Ghanaian Cedi will be re-denominated this year with ¢10,000 equaling ¢1.
If this happens, it would make this currency Ghana"s third cedi for the records after two incidents of currency confiscation along the way. The purchasing power of the old and new currencies stays the same; the cedi is not being devalued or re-valued. It just being re-redenominated. And since both old and new currency will be in circulation for a while, you always have to check before you pay for goods and services or tip that hospitable waitress/waiter.
The first cedi was introduced in 1965, replacing the West African Pound at a rate of 2.4 cedi = 1 pound, or 1 pesewa = 1 penny. Just two years later, the first cedi was replaced by a second in 1967. The second cedi was initially pegged to the British pound at a rate of 2 second cedi = 1 pound. However, within months, the second cedi was devalued to a rate of 2.45 second cedi = 1 pound, less than the value of the first cedi. This rate was equivalent to 1 cedi = 0.98 US dollars and the rate to the dollar was maintained when the British pound was devalued in November 1967.
In 1979, after Jerry John Rawlings took power in a coup d"etat, a currency confiscation took place. New banknotes were issued which were exchanged for old ones at a rate of 10 old for 7 new. A second confiscation took place in 1982, when the 50 cedi note (the highest denomination) was demonetized. Only Ghanaians could exchange any number of 50 cedi notes for coins or other banknotes without loss.
Today, 4th January 2007, the Bank of Ghana states the cedi"s exchange rate at 1 USD to ¢9,158.64; a sign of the economic struggles of the years. And come July, the Ghana Cedi, all other things being equal, would exchange at approximately a dollar or less. But could this be goodnews for business?
The Bank of Ghana website: www.bog.gov.gh. Gives a number of reasons why this re-redenomination should be good for business:
"The current note regime places significant deadweight burden on the economy. This comes in several forms such as the high transaction costs at the cashiers, general inconvenience and high risks involved in carrying loads of currency for transaction purposes, increasing difficulties in maintaining bookkeeping and statistical records and ensuring compatibility with data processing software, and the strain on the payments system, particularly the ATMs. "
So you can come to Ghana rest assured that, as long as you keep your goggles on, there"s everything to enjoy and nothing to fear.
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