Tiresome journey of cedi
It is just as well the cedi is not a human being. Otherwise, it would be tired, or to borrow a popular form of speaking, we would say, cedi abr3!
It is not Bloomberg saying the cedi was the best-performing currency against the US dollar last week which got to me, I can’t stop them trying to make fun of us. I am holding my breath and waiting for the cedi to climb back up to where it should be.
In all the currency upheaval, what got to me really was the announcement last week that the Bank of Ghana had issued new one cedi coins, complete with enhanced security features.
My mind went back to November 2019 when the Bank of Ghana(BoG) suddenly issued GH¢100 and GH¢200 notes. I remember being horrified and feeling that the BoG knew something the rest of us didn’t know.
They must have known that something dramatic was going to happen to the currency and to inflation. Otherwise, why issue 100 and 200 cedi notes, when the 50-cedi note was adequate in our single-digit inflation economy? Three years later, with 40 per cent inflation and a 50 per cent currency depreciation, I saw the point.
Cedi journey, upheavals
Maybe the point of the new one-cedi coins too will emerge. But for the moment, I have just been thinking of the journey of the cedi throughout my life.
Up to the day she died, my mother was moaning about her 50-cedi notes that the government took from her and she never got back. She had seven of the notes. Even after her departure, I hesitate to talk about this subject. It was a sore point with her. My mother, of course, was not the only person who had 50-cedi notes taken from her.
The 50-cedi notes saga was only one in the very long line of currency upheavals that the governments of Ghana have inflicted on the citizens since independence.
We started with the West African pounds and shillings and our first President, Dr Kwame Nkrumah, decided that an independent Ghana had to have her own currency otherwise the people would not quite believe they were independent. Putting his effigy on the currency was purely coincidental.
Not too long afterwards the Ghana pound lost all credibility when we started spending far more than we could afford. The remedy was to introduce an entirely new currency, the cedi, it had an authentic Ghanaian nomenclature, unlike the neo-colonialist “pound”.
The cedi and its pesewa coins would restore some respect to our currency and economy, but in fact, the cedi and the economy with it continued to struggle.
When Kwame Nkrumah was overthrown, the cedi was changed, his effigy removed and renamed the New Cedi, and we were led to believe this will bring respectability to our currency. It did not happen.
When Kofi Abrefa Busia became Prime Minister, he decided the problem was with the artificial value and some drastic but painful decisions had to be taken and he devalued the cedi. Within days, his government was overthrown in a military coup d’etat and the lesson was driven home to all future governments: the cedi cannot and should not be allowed to have its true value.
In the nine years of military rule that followed the overthrow of Busia, there were two instances of something called “demonetisation”. An announcement is suddenly made that new cedi notes were being introduced and you had a week or so to change your old notes at 65 per cent of the face value.
Value of cedi
As for the value of the cedi in relation to foreign currencies such as the dollar and the pound, we descended into an elaborate farce in which, for years, a bank rate of exchange was kept at 2.50 cedis to the dollar when you could get up to 20 to the dollar in the black market.
Bigger denominations of the cedi were gradually introduced and before very long, 50-cedi notes arrived and this is where my mother’s heartbreak story comes into the narrative.
Another attempt at constitutional government led by President Hilla Limann had just come to grief with a military coup d’etat when I left Ghana in January 1982 and at the time, the biggest denomination of the currency was a 50-cedi note.
Those early days of the Jerry Rawlings coup, the new authorities believed that the solution to the problem with the economy and the worthless currency was to punish those who had money and they were all believed to have dishonestly acquired whatever money they had.
All 50-cedi notes were declared illegal tender. People were told to take their 50-cedi notes to a bank where they would be given a receipt for however many pieces they had brought.
My mother took her 50-cedi notes, (seven pieces) to the bank and she was given a piece of paper to be redeemed on an indeterminate date in the future.
By the time another government tried to do anything about the cedi, the smallest denomination we had was a thousand cedi note and we had twenty-thousand cedi notes in circulation and my mother never got her 50-cedi notes back.
We had moved from 50-cedi notes being seen as signs of wealth to beggars refusing to accept one thousand cedi notes. By the time I came back to Ghana in the year 2000, everybody had become a millionaire, a cedi millionaire and money was not carried in wallets or purses but in black plastic bags and I could not understand the currency however hard I tried.
In the year 2007, the cedi had another dramatic transformation when four zeros were dropped and ten thousand cedis became one Ghana cedi. The slogan was: the value is the same, one million cedis became one hundred Ghana cedis and we all accepted that indeed that was the true value of the cedi.
Change in fortunes
For the first time in a long while, we began carrying money in wallets. At the time of the Redenomination, our one cedi was worth more than one US dollar.
When the cedi started doubling up, then broke into a canter and then took on Usain Bolt these past three months, all I could think of was the 100 and 200 cedi notes. The BoG certainly knew something they didn’t let on. If the value was going to remain the same, they wouldn’t have issued 100 and 200 cedi notes.
I am not sure if I should hold my breath about the reported change in fortunes of the currency this past week. It is always a more difficult journey climbing up than falling down. The poor cedi must be tired.