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March 21, 2005
Currency death spiral
Carrying money around in Ghana is a necessity in this cash-based economy, but it's no simple feat.
Ghana's currency, the cedi, ("cee-DEE"),has gone the way of the old Italian lira, with one U.S. dollar worth 9,200 cedi. The depreciation spiral has been decades in the making. In 1983, one U.S. dollar was worth 90 cedi. In 1993, one dollar would net 720 cedi. The breathtaking drop from there to 9,200 cedi in ten years has been tragic for the struggling economy.
As their currency has spiraled downward, Ghanaians have watched their purchasing power plummet. The current price index for Ghanaians is impossibly high. The average Ghanaian wage is somewhere between one and three dollars per day. Think of your daily gross pay, then imagine that that's what a gallon of gas cost you. It's unimaginable.
For Westerners, the cheap cedi means bargain living, even for Americans with the plummeting U.S. dollar. Taxi fares start at about 50-cents for a short hop, with long trips around $3-4. A cold Coke is 60-cents, and a bottle of Ghanaian Star beer is 70-cents.
But purchase any commodity or service at Western prices, like hotels, electronics, or private transportation (i.e. driver), and dealing with cedis becomes challenging.
That's because the largest bill available is the 20,000 cedi, or $2. And that's not a common bill. The most common is the 10,000 cedi, or $1, bill. So it's like transacting all business in cash and in one-dollar bills. A trip to the money-changer leaves me with large wads of cash, and as I make purchases around town, the big notes multiply into more bills of smaller denominations.
Trying to discreetly carry that many bills around requires two different wallets and more secret hiding spots in clothing and bags. All well and good until I need to pay for something and can't find the proper bills in the first or second wallet.
I try to keep my cash organized in some fashion, with small bills of change in the most accessible wallet, but somehow as each day progresses my money management system dissolves into chaos and I end up openly rummaging through wads of bills in various pockets and wallets to find a 15,500 cedi taxi fare.
There may be hope for the currency in the form of the new West African Monetary Zone and its proposed new currency, the "eco". The eco would follow the example of the CFA, the currency used in most francophone countries here. "Eco" countries are mostly Anglophone West Africa, including Ghana, Nigeria, Sierra Leone, Liberia, the Gambia and Guinea (the only francophone country of the lot). The current thinking is that the eco would be tied to the South African rand for stability.
Apparently plans for establishing the "eco" are behind schedule, but are moving ahead nonetheless. I've seen billboards in Accra and Kumasi promoting the "eco" concept.
Posted by Cathryn Poff at March 21, 2005 12:32 PM
Comments
You would need an enormous bag to carry the cedis! How are the cash machines there?! Do they use checks or just cash? I'm learning so much from your daily blogs - keep them coming---
Posted by: Nikki at March 23, 2005 5:56 PM