Ghana's 1 Pesewa Seldom Seen|
March 22, 2011
This article was originally printed in Numismatic News.
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Ghana has gone through three currency reforms in recent years, the third of these commencing in 2007. Among the most recent changes to the coins and bank notes was the introduction of coins in denominations of 1, 5, 10, 20, and 50 pesewas, as well as 1 cedi. These coins were valued correspondingly at 100, 500, 1000, 2000, 5000, and 10000 old cedi.
According to the latest edition of MRI Bankers’ Guide to Foreign Currency, “All older notes are exchangeable at the rate of 10,000 old cedi for a new one.” There is no mention of the older coins being exchangeable for new coins.
These notes are Bank of Ghana issues in denominations of 1, 2. 5. 10, 20 and 50 (new) cedi. This new currency was introduced in December 2006 and became effective in July 2007. The MRI guide notes that the import or export of Ghana’s currency is forbidden, and that the current exchange rate is 1.425 new cedi to the U.S. dollar.
The problem the currency reform was supposed to erase was inflation and the toll it has taken on the purchasing power of Ghana’s money. According to the Bank of Ghana, the domestic Consumer Price Index inflation was at 8.58 percent during December 2010, with a target for 2011 being set at 8.5 percent. The Current Monetary Policy rate is 13.5 percent.
With this in mind the question has been recently raised by MTN Ghana News regarding the lack of 1-pesewa coins in circulation. According to a January 28 newspaper article, “The investigations revealed that unlike the other cedi denominations, the 1-pesewa coin is simply unavailable at the banks.”
The article continues, “Some of the banks visited which did not have any 1-pesewa coin were Stanbic bank, Ecobank, UBA, Barclays, and SG-SSB banks. It was only Barclays Bank where Asempa News’ Kwaku Antwi-Otoo managed to get 30 pesewas worth of 1-pesewa coins out of the 50 pesewa he submitted to a teller for conversion. Tellers at other banks claim the 1-pesewa coins are being kept in their vaults because no one is interested in using them.”
So, if inflation is still at somewhere around 8 percent annually you might think the lack of purchasing power has already diminished the coin to a point that it is no longer functional. Not so, according to MTN Ghana News. It appears the public has no use for the denomination.
According to the news report, “Kwaku tried to use the 1-pesewa coins for sachet water but the seller rejected them. The sachet water seller said people do not accept the coin as change so she could not accept it too. Kwaku then picked a Hyundai ‘trotro’ with registration number GR 1924 Z heading towards Kwame Nkrumah Circle and reports that the driver’s mate only accepted the coins after a lengthy persuasion.”
Were the coins rejected because they don’t have much purchasing power, or because they are a nuisance similar to when someone in the United States tries to make a payment using a significant number of 1-cent “pennies?”
This is one of the mysteries within the Ghana currency system. According to Wikipedia, there has also been a medallic coinage in sika denominations in use as well that “may have no legal tender status.”
Ghana’s first decimal coinage following independence from Great Britain was an issue in denominations of 5, 10, 25, and 50 pesewas that circulated between 1965 and 1967. The previous halfpenny and penny coins continued to be used as denominations representing a half and a 1 pesewa.
A second cedi series of coins in denominations of a half, 1, 2½, 5, 10, and 20 pesewas was introduced in 1967, with a 50 pesewas and 1 cedi added in 1979. In 1984 smaller diameter coins of the same denominations were issued as well as a new denomination 5-cedi coin.
Due to inflation 10-, 20-, 50-, and 100-cedi coins were introduced in 1991, followed by 200- and 500-cedis coins in 1996. As their purchasing power eroded the coinage reform of 2007 eventually replaced all of these “old” cedi coins, as well as the bank notes of the same period.
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