The bank of Ghana announced last week that it was upgrading the cedi banknotes to enhance security and machine readability.
Since the announcement, I’ve heard a lot of people, obviously from the opposition NDC asking how Bank of Ghana’s move to upgrade the Banknotes will help solve the depreciation of the cedi as against the dollar.
It is understandable that people are concerned about what the bank of Ghana is doing to ensure a stable and strong cedi against major trading currencies.
But what these people and everyone else wondering if this is really necessary must understand is that, fixing the cedi depreciation is fundamentally different from fixing the recognized security issues with the current banknotes although the latter has some effect on the former.
I’m no economist and neither am I privy to the sort of intelligence available to the BoG, but it is not rocket science that in the face of the facts, counterfeiters are using advanced methods and Technology to produce en-mass the cedi banknotes to a detail that’s most often, undetectable.
With all these monies in circulation, the value of the cedi is reduced and inflation goes up as these counterfeits have no stock backing them. Businesses also lose a lot of money due to counterfeit money used in transactions. Even if such monies are confiscated at the bank, remember the business man is never reimbursed in anyway.
Additionally, counting machines have had a technological facelift and it is only prudent to have banknotes that can be handled effectively by such machines to improve service delivery at the banking halls.
So if you’re still asking whether or not upgrading is necessary, Yes, it is. Will it instantaneously bring the cedi to par with the dollar? definitely not, but it will address one of the myriad of factors that accounts for the depreciation of the cedi and inflation in the Country.