Currency change lightens Ghanaian pockets

HOHOE, Ghana Florence Yaarda looked confused as I paid for the night’s lodging. The proprietor of the Taste Lodge in eastern Ghana wrinkled…

HOHOE, Ghana

Florence Yaarda looked confused as I paid for the night’s lodging.

The proprietor of the Taste Lodge in eastern Ghana wrinkled her brow as she accepted the crisp blue banknotes I held out. She’d never seen their like before.

Then realization dawned and she smiled.

“This is the new one,” she said with a chuckle, looking up. She held the five-cedi note to the sunlight, feeling its smooth texture with her fingers.

“I have not seen this one.”

I felt like an ambassador from Accra, Ghana’s capital 370 kilometres away, where I’d hit the bank machine the previous morning, July 3 — the day the Bank of Ghana released Ghana’s new currency.

The new cedi had yet to circulate to remote parts of the country. Travellers like me would be the first to bring it.

But if I was an ambassador, I no longer felt like a rich one, despite the flashy new bills.

Ghana used to be flush with cash. People had so much it was sometimes difficult to carry.

The old cedi was so ridiculously inflated that a single cedi note or coin did not exist. Instead, people carried hundreds of thousands for day-to-day errands, or millions if rent was due.

But the largest denomination was the 20,000 cedi note — roughly equal to US$2 — for which one could purchase two large bottles of beer or a cross-town cab ride.

Money was cumbersome.

Imagine paying for a fill-up at a gas station or a week’s lodging at a guesthouse with nothing but $2 bills, all the time.

Folks often had enormous wads of cash on hand, and not just the truly wealthy. It wasn’t unusual to see the man in the street wearing T-shirt and jeans produce a stack of red and purple bills from his hip pocket and flip through them adroitly with two fingers, accustomed to counting such large sums.

Then the Bank of Ghana changed everything.

The new cedi cut four zeros from the old denomination. Twenty thousand cedis became two cedis. The single cedi note now in circulation buys what 10,000 cedis used to buy.

Smaller amounts have been replaced by coins, called pesewas. There’s also a 10-cedi note and a (still rare) 50-cedi note, worth roughly US$0.90.

But the old cedi is still in circulation.

The Bank of Ghana reckons the new currency will take six months to replace the old, during which both will be considered legal tender.

People are wary. The combined currencies could be a vector for corruption and cheating.

Ghana has redenominated its currency several times during recent decades, and Ghanaians — roughly 50 per cent of who are illiterate — have lost money in the past.

The national government has vowed little tolerance for any of its employees, such as permit vendors or finance officials, caught swindling.

But it’s everyone for herself in street markets and on public transport, where people who are used to cash transactions are suddenly receiving copper coins in change.

Three days after the new cedi began circulating a woman seated in front of me on a tro-tro, which is kind of passenger minivan, refused to accept pesewas in change for her old 5,000-cedi note.

She wanted a 2,000-cedi bill. She didn’t believe that the coins being offered held the same value, though they did.

“They are too small,” she complained.

Tourists in particular are likely to get ripped off, a taxi driver in Accra told me.

Foreigners who don’t know better are likely to pay double or triple taxi fares, he said.

“You must be careful. Other drivers, they will try to cheat you.”

In the midst of the confusion Ghana is still negotiating an “economic partnership agreement” with other English-speaking countries in West Africa that would establish a new, common currency to rival the West African CFA franc that the French-speaking countries use.

Ghana’s next currency could be called the ‘Eco,’ following the European example.

But the Eco could be a long way off.

Nigeria and Ghana, West Africa’s top two gross domestic producers, are reluctant to prop up struggling economies like Sierra Leone and Liberia, both prospective Eco candidates trying to recover from recent political and economic upheaval.

“Issues of revenue loss, access to European markets and many critical constraints have not been fully addressed,” Joseph Nnanna, director-general of the West African Monetary Zone, recently told the Daily Graphic in Ghana.

Member states are not ready to sign a pact yet, but increased intra-African trade within the sub-region could help, said Nnanna.

It may take some time for West Africa to the globalizing trend toward economic trading blocks and common currency.

But at least Ghanaians no longer have to carry bricks of cash.

Former Yukon News reporter Graeme McElheran is currently living and writing in Ghana.