Manager of Bank of Ghana on Wednesday dismissed the claim that the
redenomination of the cedi would be a waste of state resources if the
proposed West African common currency, Eco, is introduced.He said the
New Ghana Cedi "will rather realign our currency with those of other
ECOWAS member states".
Speaking in an interview with the Ghana News Agency, the BOG Regional
Manager stressed; "it will be expedient for a bicycle owner to keep
maintaining the bicycle until a promised motor car is delivered".Mr.
Atikpo explained that the problems associated with the current note
regime, including transaction costs and general inconvenience and high
risks of carrying loads of currency, were results of significant
inflation and currency devaluation in the past.
Other problems, the BOG regional manager said, are difficulties in
maintaining book-keeping and statistical records, problems with
accounting and data processing software and the strain on the payments
system like ATM withdrawals.Mr. Atikpo stated that historical analysis
had shown that redenomination of currencies had been very successful
in an environment of macroeconomic stability that had declining
inflation, stable exchange rate, fiscal prudence and stable
currency."This is the case of Ghana as of now, which compares
favourably with countries like Brazil, Argentina, Mexico and Turkey
that have successfully gone through such a programme", he stated.The
regional manager noted that, "in the absence of these factors, zeros
removed often find their way back into the system, then benefits of
redenomination become illusive and credibility is lost".
04 April 07
