The Ghana cedi

Why the Bank of Ghana redenominated the cedi

By 2007 the old cedi traded at roughly 10,000 to the US dollar, and a ¢20,000 note, the top of the range, was worth about two dollars. Shopping at a market took stacks of cash that Ghanaians called bricks, and bank tellers handed them over with plastic bags to carry them in.

The Bank of Ghana argued that the old notes put "a significant deadweight burden on the economy". It pointed to the cost of counting, to accounting errors, to software that could not handle the long figures, to strain on cash machines and to the danger of carrying visible bundles of money.

Not everyone agreed. Critics said a planned common West African currency would make the new money redundant. Some newspapers warned that traders short of change would round prices up and feed inflation, and people who remembered the demonetisation of the 1970s feared losing their savings again. Many suggested dropping three zeros instead of four.

The bank announced the plan on the radio in December 2006, before it went to parliament. By January 2007 its own survey of an urban sample found 90% of people aware of the change and 65% sure what it meant. The new money arrived in July. By the end of 2007 the bank had withdrawn about 90% of the old notes and coins, and from January 2008 the rest could only be exchanged at banks.

How the cedi replaced the pound

Before independence the Gold Coast used the British West African pound. Ghana issued its own Ghana pound in 1958, and the Bank of Ghana has issued all the country's notes and coins since that year. In July 1965 the government brought in the cedi and the pesewa, at 2.4 cedis to the pound, and left the colonial pounds, shillings and pence behind.

The first cedi lasted two years. Its notes carried the portrait of Kwame Nkrumah, and after the military coup of February 1966 the new government wanted his face gone. In 1967 a new cedi replaced the first at 1.2 old cedis each. That made two new cedis equal to one pound sterling, a simpler conversion than before.

What the confiscations of the old cedi did

In 1979 the government demonetised the notes in circulation. New notes replaced the old at a discount of 30% on sums up to ¢5,000 and 50% above it, with the stated aim of cutting "excessive cash holdings"; coins and bank accounts were left alone.

In 1982 the ¢50 note, then the highest value, was withdrawn. Ghanaians could in theory exchange any amount without loss, and foreigners could exchange nothing. Many who held large sums feared reprisal if they came forward, and burned the notes instead.

Which notes and coins circulate now

The coins run from 1 pesewa to 2 cedis. The 1 pesewa, worth 100 old cedis at the changeover, is rarely seen.

The first Ghana cedi notes appeared on 3 July 2007. A 2 cedi note followed on 14 May 2010 to fill the gap between the one and the five, carrying Nkrumah's portrait and a line marking the centenary of his birth. On 29 November 2019 the bank announced a 2 cedi coin and new 100 and 200 cedi notes. In September 2021 it began withdrawing the 1 and 2 cedi notes so that the coins of the same value would take their place.