Re-denomination of the Cedi: Essential Issues and Challenges

Abstract

In the last quarter of 2006, Ghana decided to redenominate its currency, the cedi, in July 2007. This generated a lot of arguments and debates in the country. The exercise was seen as waste of scarce resources. Many people did not even understand the term. It is therefore important to attempt a write up that perhaps will try to answer some of the questions on the re-denomination of the cedi. The study takes a look at what re-denomination is all about and the extent to which some countries had redenominated their currency over the years. A review was made of similar exercises in Zimbabwe, Turkey and Romania in recent times. The conditions needed for a smooth redenomination and the prevailing economic conditions in Ghana are analyzed here. The paper also looks at the history of re-denomination in Ghana and the way forward for a smooth exercise.