The recent introduction of GHC 100 and GHC 200 new currency denominations has left many thinking about the nation’s one pesewa coin, which has gone into oblivion.
It is common knowledge that, when currencies are introduced, they are well received by the people who are keen to hold them sometimes in admiration of the mere design amidst criticism of the colours and the features used.
Among the currencies introduced into the Ghanaian economy, the one pesewa coin, seems to have died on arrival, as it is nowhere in the open market and is criticised for the size and colour.
It is sometimes mind-boggling and one wonders and keeps asking the question if a one pesewa coin can be introduced into the system, why can’t we have prices of goods and services sold and charged for at least one pesewa, so that people can attach some value to the one pesewa and use it for it to circulate in the system and be accepted.
As market prices keep fluctuating, the value of the one pesewa coin is not able to stand the test of time as inflation would not allow it to continue to be of any value to its intended users.
The only products in the Ghanaian economy that attracts the least price are toffees like hacks, ginger PK among others, which one can buy at 10 pesewas and sachet water which is 0.20 pesewas. Even a single five pesewas have no product.
One group of businesspeople who could easily use the one pesewa on their daily businesses are trotro drivers and mates, but they are the first to even reject it. At least the five pesewas, ten pesewas coins are accepted. What then is the use of the one pesewa coin to the people it was made for.
Visiting the malls to buy some few items could be very exciting, but some end up being displeased because they sometimes leave the vicinity with brown one pesewa coins as change which are not just a waste but a nuisance because they are not used in the open market and they are left in the bag until one can no more find them in the house.
Even if hundreds of these one pesewa coins put together can buy something, the seller will not accept it, what is the bank of Ghana doing about this problem.
After Ghana decided to leave the British colonial monetary system and adopt the widely accepted decimal system, some 54 years ago, the cedi and pesewa were introduced on the 19th July 1965 to replace the Ghana pounds, shillings and pence.
Coins in circulation in Ghana come in various denominations of GH0.50p, GH0.20p, GH0.10p, and GH0.005p except the GH0.1p coin being the least which is not easily seen.
The recent introduction of the new currencies by the bank of Ghana has left the Minority in Parliament questioning the design and outlook.
The Minority feels the big six has over enjoyed some amount of monopoly over other Ghanaian contributors whose pictures could equally be used and embossed on the currency. Should this issue be taken up by the bank of Ghana or go through another referendum for yes or no?
The issue of higher denominations was problematic for not only the Minority as they think it will encourage criminal activities, but also some Ghanaians always think about how to handle such big amount on one paper note questioning “if it gets lost one is dead” but the introduction of big currencies come with such comments.
A trotro mate Kofi (Not real name) rejected the big GH¢200 cedi note recently when a passenger pulled it out to pay for his lorry fare on the Accra to Kasoa road.
The mate questioned the passenger ‘what money are you giving me what do you want me to do I can’t take it. Instead of you to give me small money you are giving me this”. Other passengers who enquired to know the problem between the mate and the passenger were shown the amount and everyone kept quiet.
Why bigger denominations?
The question has always been why did the government print the new money?
The Governor of the bank of Ghana explained the rationale for new amounts, saying the face value of the cedi compared to the US dollar over the past 12 years had eroded due to sustained periods of high inflation and depreciation and therefore the new currencies will help shore up the value of the currency.
He also explained that it would save the country more money as it was more expensive printing the lower denominations.
The bank has informed the public through posters and television advertisements to accept and use the new currency.
There is also a school of thought, which feels that printing of money will result in hyperinflation, which in economics means a high and typically accelerating inflation.
It quickly erodes the real value of the local currency, as the prices of all goods increase.
This causes people to minimise their holdings in that currency as they usually switched to more stable foreign currencies.
If printing money can result in hyperinflation, why should the government engage in it?
It is best to avoid inflation by not printing money, but countries print money with a fixed supply of money, but can government control how people spend their money?
Economic analysts explain that printing money is to replace old notes in the system and the second reason is that a growing economy requires it.
As there are more people, there are more customers.
As they are more goods being produced, there must be an increase in the amount of money to buy these goods.
If the money supply does not increase, then the economy creates bottlenecks which act as a brake on growth.
If the government prints a lot of money and puts it into the bank. The bank then lends this it out to people who spend it.
Inflation will occur if demand exceeds supply.
If there are more people willing to buy the goods than the shops can sell, then businesses will raise their prices.
Though there is sometimes the need for new money to be printed, the reason for it should necessitate the printing and the amounts printed should have a sustainable value.