For those of us who live abroad, despite being worried about the way the Ghanaian cedi is sinking in value compared to the other currencies, we may not really see the bigger effect. After all, when I manage to send my younger sister 100 pounds, she will get 4.2 million old Ghana cedis, instead of the 3 million she used to receive.
With this amount in her hands, she cannot complain that I’ve not sent her enough—but the truth is, she can’t really do much with what I’ve sent her.
On a bigger scale, the fall of the cedi is rapidly crippling the economy and if enough is not done, we will end up in a very big gutter, where our currency will be worth less than the paper it is printed on.
In March 2013, I wrote an article titled ‘Ghana, A Country With Its Own Currency Which Is Not Accepted At Certain Corners’ in which I stated that ‘though other currencies may be freely accepted within a country, on no occasion should supremacy be given to a foreign currency in relation to the national currency’.
I added that ‘Increasingly, several top hotels and private schools in Ghana are failing to recognise or accept the Cedi and yet, those in power see nothing wrong with it. The US Dollar has somehow become the operating currency in Ghana’
Citing my experience, I wrote ‘Last year, I visited Copenhagen (Denmark). During my stay, I decided to visit Malmo (Sweden) which is just 15 minutes on the train from Copenhagen.
When I got to Malmo, I tried to purchase a drink with a note from Denmark (Danish Krone) and I was told, “this is Sweden so you cannot use Denmark’s currency here”, even though these two countries are just 15 minutes away from each other…
I am sure even if the Danish Krone was accepted in Sweden; there was no way the national currency (Swedish Krona) would be refused in favour of the Danish Krone.
Are the authorities in Ghana trying to say they are unaware that the Cedi is not being accepted as a legal tender in certain corners of Ghana (in top class hotels and private schools)?’
Though sad, I am not shocked that the cedi has lost the race against the dollar and the other major currencies.
Ghana’s Rap Doctor-Okyeame Kwame has just published a creative piece on his Ghanaweb blog titled-Catching Up, which looks at how we can all help to push the cedi to catch up with the dollar.
Read the full article below…
I am not an economist. I have no deep idea of indifference curves, money or GDP. I don’t even understand marginal utility. What I know is that the underlying philosophy of economics, which is scarcity and choice may not be applicable in Ghana because what we have here is abundance of choices.
A few years ago, money was valued in gold and we live in modern Gold Coast so why is the value of the cedi not golden?
The dollar has become faster than Usain Bolt and we all have cheered him on and hooted at the cedi by over-criticising the government and also allowing the bolting dollar to create artificial expectation of increase in prices. This has given birth to various excuses; I know some people who owed others before the appreciation of the dollar and now refuse to pay by blaming it on the dollar. In fact, others even blame their malaria on the dollar. Hepatitis B and STDs should also be blamed on the dollar?
The central bank is doing its best to reduce the speed of the bolting dollar by enforcing the “spend the Ghana Cedi in Ghana” law and also making credits available to banks among other things. But from a layman’s point of view I believe that if we decide to reduce the importation of things that can be made in Ghana, we can reduce the demand for the dollar hence its price.
I know we do not produce cars, aeroplanes, and tractors so lets us not feel bad about importing them. What about shirts, dresses, shoes, belts, suits, cups etc.? We make them alright, and I am conscious of issues of final finesse, but if we support our own it will evolve and compete.
We import groundnut (nkatie borga), Shea butter (nkuto), chocolate (cocoa), and even import tooth picks. There is this lady I know, she will not feel complete unless she is wearing a Brazilian hair. Wait, let’s add the cost of all the Brazilian wigs that our sisters carry, calculate it in dollars and subtract it from the dollars we need and see if we will not cancel out our deficits and have surpluses. I am happy that natural hair is trendy now, and hopefully, very soon, Brazilian hair will stay in Brazil where it belongs.
Rumour mill has it that every year we import five hundred and fifty million dollars of rice into Ghana (wow!!!!!) when Gari can do almost everything that rice does. Rice ball – Gari balls, Rice pudding – Gari soakings, Jollof rice – Gari fotor, starch, and carbohydrate just to mention a few. It is obvious that we are not very good rice farmers but we farm cassava like nobody’s business. So why don’t we develop preference for Gari? I can’t wait for the time to come when I will get to the shop to buy my Garilac, Gariflakes, Gari-this and Gari-that.
Once again, it is important to reiterate that I am no expert on the subject of economics, but may I suggest that a slight lifestyle adjustment can improve our economy? If a romantic couple will go on a date and request for ampesi and abomu; if two people who are wearing fabrics from Akosombo Textiles Limited can meet each other and proudly say “W’ahyia wonua” (You have met your sibling); if Christo Asafo will be supported to invent to suit local needs, we would be interdependent on ourselves and you know what it will lead to.
If we would eat our kontomire, mmire (mushrooms), dawadawa, and nkyakyira, we would not need to spend millions of dollars to import all those synthetic drugs to heal ourselves.
If artistes would use signals of originality, we will all promote the value of what is made in Ghana, hence our cedi. After all the value of money is measured in gold and we live on the gold coast.