This article details the evolution of Ghana’s currency, from the West African Currency Board to the cedi and pesewa. The transition occurred post-independence in 1965, with significant changes, including a 2007 redenomination. The complexities of this evolution raise questions about currency value and management.
Ghana currently uses cedi notes and coins as its legal tender. Following its independence from British colonial rule, the nation transitioned from the Ghana pound, shillings, and pence to the cedi and pesewa on July 19, 1965. The West African Currency Board had previously served as a regional trading currency from the early 1940s until 1954.
In 1957, Ghana decisively exited the British Colonial Monetary System, adopting a decimal currency structure. The initial cedi notes and pesewa coins represented an equivalent value of eight shillings and four pence and featured the portrait of Dr. Kwame Nkrumah, the country’s first president. The term ‘cedi’ is derived from the Akan word ‘sedie’, referring to cowrie shells, which were once popular as currency.
The term ‘pesewa’ was selected as it represented the smallest denomination in the gold-dust currency era, replacing the British penny. In 2022, Wonder Ami Hagan, host of GhanaWeb TV’s People & Places, visited the Ghana National Museum, which showcases currency specimens from the colonial period to present day.
A museum tour guide noted that Ghana’s currency has evolved in phases since the country’s independence. The last significant change occurred on July 1, 2007, when the administration of John Agyekum Kufuor redenominated the cedi based on the idea that “the value will be the same.” While perspectives vary on the effectiveness of this redenomination in preserving value, some analysts contend that it negatively impacted the local currency’s value against the US Dollar. The redenomination converted ten thousand cedis into one Ghana cedi.
The rationale provided by the government and the Bank of Ghana for this currency redesign was the increasing complexity of managing accounting and statistical records, as well as issues related to data processing software. This article was first published on March 1, 2024.
In summary, Ghana’s monetary history reflects a series of significant transformations from the colonial currency system to the current cedi. Notably, the transition included a formal shift away from colonial ties, the adoption of a decimal currency system, and periodic redenominations that aimed to simplify currency management. The complexities surrounding these changes continue to evoke discussion regarding their impact on the value of the cedi.
Original Source: www.ghanaweb.com
