The Bank of Ghana is being urged to intensify public education and enforcement efforts to promote the use of lower-denominated cedi coins and notes.
According to financial analysts, the widespread rejection of these smaller denominations is contributing to inflationary pressures and eroding public confidence in the local currency.
Speaking to Citi Business News as Ghana marks the 60th anniversary of the cedi, Nelson Cudjoe Kuagbedzi, Head of Finance at Merban Capital, explained that vendors’ refusal to accept these denominations is having a ripple effect on the economy.
“One of the challenges confronting the usage of the cedi as a legal tender in Ghana has to do with the fact that both buyers and sellers do reject the lower-denominated currencies,” he said.
“Now the effect of the rejection is that these lower-denominated values induce inflationary pressures, because basic goods become more expensive.”
He continued, “So anytime these currencies are rejected, prices shoot up for basic goods and this induces inflationary pressures. Again, the rejection of the lower denominated currencies also induces loss of confidence in the cedi as a legal tender.”
Kuagbedzi called on the Bank of Ghana to launch an aggressive public sensitisation campaign to reinforce the legitimacy and continued value of these denominations.
“So I think the Bank of Ghana needs to embark on aggressive education, sensitisation and conscientisation of the public to the fact that this lower denominated currency still remains a legal tender for the purposes of business transaction and anybody who refuses to accept this legal tender is actually going contrary to the laws of the land.”
