Researchjournali’s Journal of Accounting

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The Benefits And

Challenges Of Ghana’s

Redenomination

Exercise To Market Francis Kofi Amoako-Agyeman

Tutor Business Department, Adahomase Senior

Women - A Case Study High School, Ashanti, Ghana

Of Adum, Kejetia And Emmanuel Kofi Mintah

Head Of Ict Department, Sda Senior High School

Central Markets In
Bekwai-Ashanti, Ghana

Kumasi Metropolis

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Abstract
The cedi, Ghana‟s official currency, was introduced on July 19, 1965. The value of the cedi has depreciated
drastically since its introduction. Owing to the low values of the notes and coins, huge quantities had to be
printed and minted to meet the local demands. This costs the central bank of Ghana huge sums of money. To
curtail this menace, the 2007 redenomination exercise became necessary. Other reasons for 2007
redenomination include security, portability, time saving, difficulty in software and accounting procedure in
the old Cedi. The study was about the re-denomination of the cedis; the benefits and challenges to market
women. The researcher adopted Convenience and Simple Random Sampling method to collect both
qualitative and quantitative data in order to achieve the research objectives. In total, hundred (100)
questionnaires were self-administered within Adum, Kejetia and central market in Kumasi Metropolis. The
findings revealed that the major benefits of the new Ghana cedi to market women is the security as a result of
the portability of the new currency compared to the old cedi. The major challenges identified by the study are
difficulty identifying counterfeit notes, difficulty changing the Ghc50 note when customers buy from the
market women and the difficulty in using the New Gh1 pesewa coin as many customers refuse to accept it as
change from the market women. Finally the researcher recommends that the GH1p coin should be recall from
circulation since the general public does not find it useful and people find it very difficult to handle. Also
there should be more public education on the identification of counterfeits of the new Ghana Cedi notes which
should be targeted at the urban market women and rural inhabitants due to level of illiteracy.

Keywords: Redenomination, Market women, Central Market, Kumasi Metropolis

1. Introduction
The process whereby a country's currency is recalibrated due to significant inflation and currency devaluation
is known as currency redenomination (http://www.investopedia.com). Globally, governments of both
developed and developing countries have redenominated their currencies on approximately over seventy
occasions with different reasons. Redenomination that took place in certain countries in this recent years
include: Zimbabwe (2006, 2008 and 2009), Turkmenistan(2009), Slovakia (2009), Malta (2008) Venezuela
(2008), Mozambique (2006,2008), Ghana (2007), Turkey (2005), Romania (2005), Azerbaijan (2006),
Slovenia (2006) among others, (Wikipedia.org).

According to (Mosley 2005), there are three sets of mechanisms that influence redenomination among many
nations. These include credibility, domestic politics, and identity. Because developing countries experience
high levels of inflation and deterioration in their currency‟s value against other currencies, they choose to
redenominate their currencies.

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Ghana in particular has gone through redenomination exercise on three occasions; 1965, 1967 and
2007(Wikipedia.org). It is believe that, the Ghana redenomination exercise is based on the combination of
economic and political factors, including, the governing party‟s ideology, inflation, governments concerns
about credibility, and the effect of currencies on national identity.

According to Bank of Ghana, (BOG 2007) redenomination comes with lots of benefits. It is believed that
redenomination facilitates business transactions because it lead to the use of smaller units of the money. For
instance, Ghanaians now pay only 10,000 New Ghanaian Cedi to buy a new car instead of 100,000,000 cedi
previously. It is also portable cedi thereby reduces the risk associated with carrying huge sums of money, for
example attacks by robbers. Again it strengthens public confidence in the cedi by eliminate higher
denomination notes with lower value.
However, redenomination comes with its challenges; rescaling, cost of disposing of the old notes and coins,
cost of public education, enlightens and advertising the change to citizens. (Bank of Ghana, 2007).

1.1 Statement Of The Problem

Since the introduction of the new Ghana cedi, many individuals, groups, organizations, politicians,
professionals as well as futurists have expressed fears that the re-denomination of the cedi would lead to price
increase of some commodities (inflation), especially those in unit prices below 50 pesewa, which could not be
converted in the new Ghana Cedi, (GNA 2007).

Many people were scarred even to date that the demonetization exercise which took place some years ago
would once again decrease their net worth (Schuler, 2008). According to Nassigre (2007) the pricing of
products would be the biggest initial challenge after the introduction of the de-nomination of the cedi. He
explained that many people especially the rural folks and some illiterate traders would be confused as to how
to price their wares, receive and give changes in smaller de-nomination to customers for instance, the issue of
counterfeit, braking down of the GH¢50 note into smaller unit, difficulty in quoting huge figures in new cedi
among others..

According to Pianim ( 2007) petty traders, taxi drivers, newspaper vendors, food sellers and other businesses
of that category could be inconvenienced with lack of change, which could in turn, lead to frequent rounding
offs and thus, eventually fuelling inflation. Another major problem was lack of adequate education or
preparation prior to the redenomination of the cedi to the general public.

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However little research haven done on the effect of 2007 redenomination on the market women who are
predominantly illiterate or have low level of education. It is upon this background that the researcher wished
to research into the effects of the new Ghana cedi to market women within the Kumasi metropolis.

1.2 Research Objectives

The general objective of this study is to identify the benefits and the challenges of the redenomination
exercise to the market women within Kumasi metropolis. The following are specific objectives identified to
help achieve the main objective.
1. To determine the factors that necessitated the introduction of the new Ghana cedi from relevant
stockholders.
2. To examine the main challenges of the usage of the new Ghana cedi by market women in Adum, Kejetia
and Central market within Kumasi Metropolis.
3. To determine the benefits of the New Ghana Cedi to the market women in Kumasi metropolis.
4. To examine weather market women were considered in planning the redenomination exercise.

1.3 Research Questions

The research is aim at answering the following questions:
1. What are the factors that necessitated the introduction of the new Ghana cedi?
2. What are the challenges confronting the Market Women on the usage of the new Ghana cedi in their day
to day business activities?
3. Has the introduction of new Ghana cedi brought about any benefits to the market women in Kumasi
Metropolis?
4. Was there enough education or preparation done prior to the Ghana cedi redenomination?

1.4 Organization Of The Study

This study is organized into five chapters. Chapter one covers, the background to the study, statement of the
problem, research objectives, research questions, significant of the study, the limitation to the study, scope of
the study and organization of the study. Chapter two discusses the literature review. In doing so, it examines
the definition of the redenomination, theoretical framework, and brief history of the cedi, the reasons and
benefits for redenomination, BOG reasons for the New Ghana Cedi, the relationship between the new cedi
and old cedi, Redenomination lessons learnt from other parts of the world and challenges of the New Ghana
Cedi. Chapter three discusses the methodology to the study. This thesis uses Questionnaire and interview.
The sampling techniques used and analysis tool was the SPSS. This was used for all the calculations, charts
and for the development of other statistical analysis. Chapter four presents research analysis and findings.

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This analysis is done using both primary and secondary data collected from the field and the presentation of
the findings. Chapter Five concludes the study with the summary of major findings, conclusions and
recommendation of the study.

2. Literature Review
Much of the literature on currency redenomination focuses on its macroeconomic level issues, which includes
the reasons why one country will resort to redenomination .But hardly is there any work on its challenges on
petty trading activities especially market women who form the highest population within the country. This
chapter critically reviews and presents the various literature expositions by different authors. It highlight on:
factors that lead to the redenomination, education that was conducted before redenomination exercise, the
challenges and benefits of using the new Ghana cedi after its introduction.

2.1 Definition Of Redenomination

Redenomination is the process whereby a country‟s currency is recalibrated due to significant inflation and
currency devaluation. The currency redenomination consists of eliminating a specific number of zeroes from
the currency, and bringing everything that is expressed through the national currency to that new monetary
scale. It involves all amounts: prices of goods and services sold in the country, wages and salaries, savings,
pensions, debts, rents, and other payment commitments, exchange rate and taxes, among others (Venezuelle,
2008). According to Databank research document (2007), currency re-denomination refers to the situation
whereby the currency administration of a country (i.e. the government or an independent central bank)
decides to re-calibrate the respective country‟s currency.

2.2 Brief History Of The Cedi And Redenomination Exercise In Ghana

Prior to Independence, West African pounds, shillings and pence were the official legal tender in the country.
In 1958, the country outdoor its first national currency, that is Ghana pounds, shillings and pence. In 1965,
Cedi notes and Pesewa coins were introduced, marking Ghana‟s departure from the colonial monetary system.
The cedi is the official currency of Ghana which is subdivided into pesewa. Hundred pesewa makes one cedi.
The word ‟cedi‟ is derived from an Akan (a Ghanaian indigenous language) word ‟sidie‟ which refers to
cowry shells, a 19th Century medium of exchange in Ghana, and the name “pesewa” refers to the smallest
quantity of gold dust, which used to be a former medium of exchange in Ghana as well. This is because in
ancient times the shells were used as a form of money and it gained popularity and wider circulation in the
later part of the nineteenth century (Bank of Ghana, 2000).

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The cedi was first introduced on July 19, 1965 to February 22, 1967 to replace the Ghana pound, shilling and
pence which were the first currency introduced by the Bank of Ghana after the independence of the country
from British rule for the purpose of decimalization. The first cedi replaced the pound at a rate of 2.4 cedi = 1
pound, or 1 pesewa = 1 penny. The „first‟ cedi bank notes were issued in denomination of 1, 5, 10, 50, 100
and 1000 cedi notes. Except the 1000 cedi note, all the denominations bore the portrait of Dr. Kwame
Nkrumah; Ghana‟s first president after independence from British rule (Wikipedia).

The ‟first‟ cedi coins on the other hand where issued in denomination of 5 pesewas, 10 pesewas, 25 pesewas
and 50 pesewas. Smaller coin denominations below the 5 pesewas were not issued. This was because the ½
penny and 1 penny which were in circulation since the colonial days were made to exist as ½ pesewa and 1
pesewa respectively. All the coins issued bore the portrait of Dr. Kwame Nkrumah (Bank of Ghana, 2000).
Two years later, another cedi was introduced. This replaced the 1965 cedi at a rate of ¢ 1.20=N¢ 1.00. The
motive behind this change was partly economic and political: convenience of exchange that is the change
allowed for an easier conversion from the Ghana cedi to pound (Schuler, 2008).

The change also provided an opportunity to remove Kwame Nkrumah's image from coins and notes. This was
after Nkrumah‟s government was toppled in a military coup d‟état in 1966.The second cedi notes were
initially issued in 1967 in denominations of 1, 5, and 10 cedi notes. In 1972 and 1973 a second series of the
New (‟second‟) cedi denominations were issued in 1, 2, 5, and10 cedi notes. Then another (third) series of
issue of the cedi was done in 1979 which consisted of 1, 2, 5, 10, 20 and 50 cedi notes. In 1983, another new
series of the second cedi bank notes were issued in denomination of 10, 20, 50, 100 and 200 cedi notes
(Wikipedia).

Later there were higher denominated bank notes which were 500 cedi note (in 1986), 1000 cedi note (in1991),
2000 cedi note (in 1995), 5000 cedi note (in 1996) and 10,000 and 20,000(in 2002). The ‟second‟ cedi coins
were initially introduced in denominations of ½, 1, 2.5, 5, 10 and 20 pesewa. In 1979, coins of 50 pesewa and
1 cedi denominations were introduced. By the end of the 1980s all these denominations have fallen out of
circulation due to inflation. Further, in 1991 10, 20, 50, and 100 cedi coins of the second cedi were introduced
and in 1996 a 200 and 500 cedi coins were also made to circulate (Bank of Ghana, 2000).

In 1979, a currency confiscation took place. New banknotes were issued which were exchanged for old at a
rate of 10 old for 7 new. (Schuler, 2008). The 1980s saw Ghana‟s currency being devalued several times,
partly as a result of the implementation of International Monetary Fund Structural Adjustment Programs.
Ghana joined the Enhanced Highly Indebted Poor Country (HIPC) initiative in 2001, which is debt-relief

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collaboration between the IMF and the World Bank (Bargawi, 2004). This process ended in 1990 with a free
float of the cedi against foreign currencies. Inflation continued until by July 2007, the cedi was worth about
9500 to one US dollar, this brought to the third cedi. (Bank of Ghana, 2007).

In November 2006, the bank of Ghana had initiated the move towards the re-denomination of the cedi to the
new Ghana cedi. A third cedi was introduced, worth 10,000 of the old cedis. The external purchasing power
of the old and new currencies is the same; the cedi was neither devalued nor re-valued, only redenominated.
Because of this change, Ghana's currency became one of the highest-valued currency units from one of the
least valued currency units (Bank of Ghana, 2007).

2.3 Factors That Necessitate Redenomination Exercise

Currency redenomination is a governments attempt to reassert monetary sovereignty. If citizens lose
confidence in the national currency, they may begin to use foreign currencies, particularly those with greater
prestige. This may be both a psychological and an economic blow to the government: this causes the currency
to lose its functions as lender of last resort (Cohen, 2004).

Another reason for redenomination, though not often cited is domestic politics. Mosley (2005) argues that the
use of redenomination as a means of improving credibility is ultimately an account rooted in domestic
politics. According to him, governments may want to keep inflation low because they want to be rewarded by
voters, during election, for economic performance; impress international market to enable them borrow more
cheaply and attract foreign investment that in turn will facilitate government spending and domestic economic
growth.

2.4 Bank Of Ghana (BOG) Reasons For The Redenomination Of The Cedi
There are many reasons why a country will decide to redenominate its currency ranging from credibility and
identity, to domestic and international politics (International Monetary Fund, 2003; Mosley, 2005; Martinez,
2007). The BOG press released on the redenomination of the cedi (Daily graphic, 2007), stated the following
reasons(1)simplification of accounting records and the ease of expressing monetary values(2)re-introduction
of the culture of using coins which will reduce pressure on bank notes( 3)significant reduction in transaction
volumes( 4) reduction in the cost of carrying large volumes of bank notes and its associated risks.( 5)
efficiency in payment systems such as the use of ATMs( 6) facilitating the introduction of the use of vendor
machines and car parking meters (7)promoting tourist expenditures( 8)significant cost savings to the BOG in
the cost of printing bank notes. Ghana cedi note (Bank of Ghana, 2007).

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According to Acquah (2007), the re-denomination will deal with the inefficiencies associated with the old
currency. Again the inconveniences and risk involved in carrying loads of currency for transaction purpose,
the deadweight burden of the current cedi denominations, the increasing difficulties in maintaining
bookkeeping and statistical records, incompatibility with data processing software and the strain on the
payments system particularly the ATM in an economy are some of the reasons for the redenomination (Bank
of Ghana, 2007).

Historical analysis suggests that re-denominations had been very successful in an environment of
macroeconomic stability. According to Addison (2007), declining inflation, stable exchange rate, fiscal
prudence and well-anchored expectations of policy credibility call for the re-denomination by stripping the
prices and values of the numbers that the force of inflation has embedded in them, put a hard-wire around all
these economic changes and measures and lift the dead weight burden the existing note regime places on the
economy.

Another reason is that, the re-denomination will free the economy to do business in the most efficient way,
based on the cedi as a means of exchange; and with continued commitment to prudent and disciplined
economic policies, which will serve as a store of value for all, both within and outside of the banking system
(Daily graphic, 2007).

Ghana in joining the ECO zone will have to re-denominate in order to bring the exchange rate to the dollar
close to what pertains in the West African sub-region. For instance, Ghana‟s exchange rate to the dollar is
close to 9,200, Gambian Dalasi to the dollar is 27.65; Nigerian Naira is 127.90 Sierra Leone‟s Leones is 2,973
to the dollar. The only way there can be uniformity in the exchange rate when these countries convert to the
ECO is for their exchange rates to the dollar to become close to each other‟s, and that is what Ghana is doing
(Wikipedia, 2013).

According to Bank of Ghana (2007), factors like over stretching of the payment system has not only rendered
the country‟s currency unattractive, but also reduced its quality as a store of value a situation which calls for a
change. The bank was then taking advantage of the current stable macro-economic environment, which
manifested itself in falling rates of inflation, relative price stability, strong Gross Domestic Product growth,
stable exchange rates and an increase in Gross International Reserves to implement the re-denomination. The
re-denomination of Ghanaian currency would also help to reduce the increasing rate of pick pocketing and
armed robbery cases in the country. Ghana joins the League of Nations whose currencies are well recognized
and highly valued in the world (BOG, 2007).

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2.5 Public Education On Redenomination

Redenomination done so far in most countries required both internal and external public education. In the case
of Zambia tariff redenomination which occurred in January 2012, was announced long before the
redenomination of all dollar-denominated debts. Some officers had to attend press conferences, radio and
television programs, Public education: Press bulletin, Leaflets, posters and other material for different people,
e.g. general public, bank cashiers, accountants, etc. (Bank of Zambia, 2012).

Surveys to find out whether the education was understood or not was done by the stakeholders were
conducted. (Bank of Zambia, 2012). Education awareness has shown that redenomination have improved the
financial condition and investment performance of Argentine firms. The study shows that the salutary effects
of redenomination were anticipated in advance and they were understood widely at the time the policy was
announced. (Mosley, 2003).

According to Central Bank of Venezuela (2007), the public‟s acceptance of the currency redenomination
process was much easier when the people accountable for its execution, gave adequate education to the
stakeholders as to the reasons why the government was undertaking that process. Their success of the
currency redenomination process depends on the Institution‟s capacity to inform people about the change. In
that sense, the unique, special and symbolic character of the currency acceptance within the public does not
depend on individual leanings, but on the confidence built as a community. Therefore, communication is not
just an “added value” to the process of currency redenomination, but a fundamental aspect of the change
(Central Bank of Venezuela, 2007).

2.6 Ghana Cedi Redenomination Education

Re-denomination requires resources, organization and time to implement, including re-calibration of certain
equipment, e.g. ATMs and accounting software. It requires public education and information to allow the
public to adjust their habits to the new system (Bank of Ghana, 2007). A coherent programmed of logistics
and implementation of activities associated with distribution of new and withdrawal of old currency notes and
coins are also required. The cooperation of the banking industry and other key players in the market were
necessary to ensure a comprehensive public education programmed (Bank of Ghana, 2007).

Bank of Ghana (2007), carries out educational campaigns on the redenomination in the various constituencies
within Ghana. The use of Information Vans was paraded throughout the entire country to inform the masses
in order to make them appreciate the initiative. The Bank intensifies its education on the re-denomination at
the grassroots, targeting the illiterate population and market women.

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President John Agyekum Kufuor also stated that the smooth and successful implementation of the country's
currency re-denomination, will make the change-over to the new Ghana Cedi smooth and the exercise would
not cause any loss of savings (GNA, 2007). Amoah (2007) announced that the Bank had created a website -
www.ghanacedi.gov.gh - to enable the general public to have easy access to the convertible rates and easily
determine the counterfeits money. The Central Bank had put in security features to make it difficult for crooks
to make counterfeits of the new currency.

The National Commission on Civic Education (NCCE) in collaboration with the District Directorate of the
Ghana Education Service covered most basic schools as well as senior high schools. Ghanaians were told to
be extra vigilant of the security features of the new currency (GNA, 2007). Rural Banks were charged to
educate the public about the challenges that the transition to the Ghana Cedi will bring. (GNA, 2007).

2.7 Benefits Of Redenomination

Bank of Ghana outlines some benefits of the redenomination exercises which include: security, Currency
Comparison, Portability, etc. The new currency clearly had advantages in terms of its portability, which in
turn made individuals feel safer, that is to prevent armed robbers to identify a person carrying large sums of
money and also made it easier to keep track of how well the country was doing relative to other currencies.
Another benefit with New Ghana Cedi was that one can carry much money to outside for transactional
purposes likewise it can receive similar foreign currency as compare to the volume cedi which were allow by
the international body(BOG, 2007).

According to Bank of Ghana, the benefits of redenomination are incalculable. However, when implemented
under high inflation and unstable macroeconomic environment, the benefits become illusive and credibility
lost. ((BOG, 2007). Re-denomination also strip the prices and values of numbers that the force of inflation has
embedded in them and put a hard-wire around all economic changes and measures and lift the dead weight
burden that the existing note regime places on the economy. According to Bank of Ghana, the re-
denomination is to free the economy to do business in the most efficient environment. (Bank of Ghana, 2007).

Re-denomination brings about simplification of accounting records, ease of expressing monetary values,
reduce statistical difficulties, reduces price tagging difficulties at shops and supermarkets, etc. Re-
denomination also enhances book- keeping and simplify business transactions. The country experiences a
consistent fair distribution of food stuffs, thus keeping inflation in check, carry few but very valuable
currency notes and coins to facilitate business (Bank of Ghana, 2007).

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2.8 Challenges Of The New Ghana Cedi

There are many challenges attached to currency redenomination. They include cost of printing new notes and
minting new coins, cost of disposing of the old notes and coins, cost of public education, enlightens and
advertising the change to citizens. Man-hour cost of exchanging the old currency for the new currency in the
banking halls etc. (BOG, 2007).

Another challenge that comes with redenomination is to change and harmonize all computer software and
ATMs within a time bound. Post terminals and other processing systems have to transform all existing
accounts to the New Ghana Cedi. The process of adapting the new currency is further complicated by the mix
of platforms at technologies throughout the various organizations affected by this change (GNA, 2007).

Another challenge was that people perceived the exercise as unnecessary given that West African Countries
plan to move towards using a common currency at some point in the future. At that point, the new currency
would become redundant. Secondly, it was argued that changing the currency without institutionalized plans
for other significant changes to the country‟s economy was pointless (http://ghanconcious.ghanathink.org).

Some newspapers echoed unspoken fears that the redenomination would trigger inflation. For example, the
Ghanaian Chronicle (2007) Journal of Applied Business and Economics cited a prominent Ghanaian
Economist, Mr. Pianim as highlighting the probability “that petty traders, taxi drivers, newspaper vendors,
food sellers and other businesses of that category could be inconvenienced with lack of change, which could
in turn, lead to frequent rounding offs and thus, eventually fuelling inflation.”

There was an indication that the pricing of products will be the biggest initial challenge after the introduction
of the redenomination of the cedi.
The news agency reported that many people especially the rural folk and some illiterate traders will be
confused as to how to price their wares, receive and give change involving the smaller denomination to
customers. Another challenge emerging out of the educational campaign was the conversion of figures in
figures to the new currency, for instance the conversion of 21,854,321 cedi‟s to the new currency (GNA,
2007).

The major challenge of redenomination is counterfeit money. This is imitation currency produced without the
legal sanction of the state or government. Since citizen are not so familiar with the features of the new
currency, criminals take advantage of producing counterfeit to defraud the citizens. (Wikipedia, 2013).

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3. Research Methodology
Each research problem is in some form unique and thus requires a custom-made research procedure. Data
were gathered on market women who trade at Adum, Kejetia and Central market within Kumasi Metropolis.

3.1 Research Design

For the purposes of this research, exploratory and descriptive was adopted (Saunders et al., 2009). These
methods were adopted mainly to help the researcher evaluate the benefits and challenges of the new Ghana
Cedi as used by market women in Kumasi metro as little research has covered in this area. To achieve the
objectives of this study, a case study strategy (Saunders et al., 2009) was employed to collect both qualitative
and quantitative data. With regard to time horizons, the study is a single cross-sectional (Saunders et al.,
2009) as data was collected from customers at a particular point in time – while they were at their regular
business operation in the market and not different times at the market (longitudinal).

3.2 The Study Area

The research was designed to cover the activities of three hundred (300) market women in Adum, Kejetia and
central market within Kumasi Metropolitan Assembly, Ashanti Region. These areas were chosen because all
other people from different places within Ashanti Region move to these three market areas to engage in
business activities. Again the places are popular noted for trading activities.

3.3 Population Of The Study

The population for this study is all market women in and around Adum, Kejetia and Central market areas.
In this study, the researcher used both primary and secondary sources of information. The major sources of
secondary information were obtained from records; report in newspapers and on the Internet, documents from
the bank and magazines

In this regard, the researcher used two (2) different methods of gathering required data. These were
questionnaires and interview. Questionnaire was the main instrument used in eliciting majority of the
information, open-ended, close-ended and multiple-choice questions were combined in the questionnaire
designed for the research work

Data collected from the field were analyzed and presented by the use of statistical models such as tables‟ and
bar charts. Both the qualitative and quantitative approaches to data analysis were used. A very good care was
taken through the answered questionnaire to validate clarity of expressions, legibility, unreciprocated

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questions and other discrepancies. The SPSS (Statistical Package for Social Sciences) was used for all the
calculations, charts and for the development of other statistical analysis.

4. Data Presentation And Analysis

4.1 Demographic And General Questions
All respondents were females who operate in and around Adum, Kejetia and Central market within Kumasi
metropolis. The study revealed that majority of the respondents were between the ages of 30-39, representing
37.0% and the least age group is the over 60 representing 1%.This means that majority of the market women
were in their youthful ages while few of them were above 60 years. This implies that educating the market
women to embrace the new currency is not difficult. Again since majority are youth it mean the business is
lucrative venture. This is evidenced in Figure 4.1.1

42.0% of the respondents were basic school certificate holders, 30% were Senior High School certificate
holders, 14%, were Commercial/Technical, 1.0% were graduate while the rest had never been to school but
acquired some trade. This means that greater percentage of the market women had low educational
background. The implication is the market women needed adequate education and enough time to study the
new cedi and its features. Since the time for education was short, the market women faced lot of challenges
using new cedi due low level of education. Figure 4.1.2)

The research revealed that all the respondent interview were in business before the redenomination. This
implies that they can accurately give the benefits and challenges the new cedi had brought to their businesses.

4.2 Benefits Of The Redenomination Exercise To The Market Women

The research shows that majority of the respondents representing 46.0% were comfortable using the new cedi
while 17.0% had difficulties in using the new cedi. This means that majority of these market women had no
problem doing business with the new. This is evidenced in figure 4.2.1. The survey revealed that 80% of the
respondents were in support of the redenominate exercise with the following reasons; to make Ghana
currency more standard just like the developed countries‟ currency, for quick transaction of business, for
reduction in the cost of carrying large volumes of the cedi notes and its associated risks and for simplification
of keeping accounting records. On the other hand, 20% were in disagreement with the exercise. This implies
the redenomination exercise was in the right direction. This is evidenced in fig. 4.2.2

On the issue of whether the exercise was done in the right time, 78% of the respondents said yes and
supported their view with reason that the country was experiencing high inflation and the cedi had depreciated

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greatly against the dollar and other major currencies. 22% of the respondents disagree. This is evidenced in
fig.5

On the question of the benefit the market women have derived from the use of the new currency, majority of
the respondents gave the following benefits: Ease to handling and counting money, fastening business
transaction, easier and safer handling of money.

In terms of pricing of goods majority of the respondents did not see any benefit that the new cedi brought.
They believe that the value of items whether in the new cedi or old cedi is the same. Some market women
(minority), on the other hand, believed that new cedi in terms of pricing goods is beneficial. They believe that
instead of quoting a price like hundred thousand old cedi (100,000) for a product, you can simply say ten
Ghana cedi (GHC10) which cheaper in the eyes of the consumer.

The findings show that majority of the market women are now used to the new cedi and again there are more
secure and better in terms of trading with the new cedi. Some the majority of the respondents recommend that
the new cedi should be accepted by every citizen and proper care should be given to it since it makes trading
very simple.

Furthermore, the above findings are in consistence with the aim of the introduction of the cedi by the Bank of
Ghana. The new currency clearly had benefits in terms of its portability, which in made marker women feel
safer. These findings are evidenced in figures 6-8

To find out how the market women keep their money, 50.0% of the respondents uses purse while the least
group representing 2.0% uses box. Some respondent use other means of keeping their money. This include
keeping money in their brazier or tie at the end of their clothes. This shows that majority of the market women
during and after business handle the new cedi properly. There was a perception that all markets women do not
handle money properly and thereby deface it. This research has shown otherwise. This is evidenced in fig. 9

4.3 Challenges Confronting The Market Women On The Usage Of The New Ghana Cedi
The study revealed that greater number of the market women do have problem with the higher denominations
of the new currency, especially the GHC50 notes. The problem was changing it into smaller denominations.
Other businessmen also refuse to accept these notes for the fear that if one gets missing or counterfeited, they
had incurred huge loss. Another problem, according to the study is the acceptance of GHp1 by customers

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because of its size. Customers say it is too tiny and gets lost easily. They therefore refuse to accept them for a
change. This is evidenced in table 4.3.1

Other challenges the respondents identified with the use of the new cedi include; difficulty in identifying
counterfeit notes, perceived diminished value of the cedi, difficulty in conversion from old to new cedi,
difficulty in quoting the new cedi instead of the old cedi, difficulty in pricing of products, Perceived frequent
increase in price of goods (inflation) and Problems of keeping volumes of coins. This is evidenced in fig
4.3.1.

On the question of whether their business operation is been affected by the use of the new cedi, 50% of the
respondents said yes while the other 50% of the respondents disagree. From the interview conducted on the
market women, those who said no are of the view that transaction of business has become fast and easier
while those who said yes see the new cedi rather increasing the price of goods. Evidenced in fig 4.3.2

For the purposes of emphasis, the researcher quotes the exact words of some respondents

Counterfeit note: “I find it difficult to identify fake note from the real ones. At many occasions, people bought
items from me with the fake Ghc50, Ghc20 and Ghc1 note. Please, something should be done about it, so that
people like me can identify fake note”.

Price Quotations: “It’s confusing sometimes if you are buying something from the market: you do not know if
the prices are being quoted in the old or new currency. For example, if a vendor says 10, do they mean
10,000 in the old currency (equivalent to 1 new Ghana Cedi) or 10 in the new currency? In other words you
have to inquire elsewhere about the price first; otherwise you will end up getting cheated and pay more than
the cost.”

Confusion about Conversions: “when the introduction was done, I always had to convert to the old cedi and
there were times when I over-paid because I could not make sense of the numbers.”

Frustration: “The fifty Ghana cedi (GHC50) is frustrating when customers want to buy our goods and we
sellers have no change. They either have to change their mind about buying the item. We sometimes have to
increased prices because there is no change. It’s a cheat!”

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Another respondent on the same issue but on security: “one lose more money if one loses one note of the new
currency (or if it gets stolen) compared to the old currency. For that reason, I do not like the new fifty Ghana
cedi note”

Psychological Effects: “I feel like the new Ghana cedi has less value compared with the old cedi because
these days Ghc10 cannot buy what the old ¢100,000 could buy”.

It presupposes that majority of these market women are not able to: make out the difference between real
notes and the counterfeit in their day to day business activities; Quoting prices in the new cedi to the market
women was a worry to them; frustrated when the numbers of customers who buy from them come with
GHC50 notes throughout especially to those who sell on the table top.

4.4 Education Or Preparation Done Prior To The Ghana Cedi Redenomination

On the question of whether enough preparation or enough education about the features of new cedi‟s was
done, 65.2% of the majority of the respondents believe that enough preparation or education was done while
34.8% of the respondents disagree to that. This implies that greater number of the market women was taken
through a lot of activities or preparation and other educational seminars before the new cedi arrived. Also
much education about the features was given through the issue of materials, samples of the cedi in a brochure
prepared by Bank of Ghana and other computer software. Fig. 4.4.1

On the issue of how the respondents received their education on the new cedi, 43% received their education
on Radio and Television which representing, 20% through newspapers and officers from NCCE, 9% received
theirs from NCCE officers, 14% through education by friends and family members, 5% said from public van,
and the rest from other means. This means that adequate public education was done in the form of: press
bulletin, leaflets, posters and other materials for different people. This is evidenced in fig.4.4.2

With regard to whether they still need education or need some assistance, 65% of the respondents said no
while 35% said they still need some assistance in the use of the new cedi. This implies that majority of the
market women do not need further education as far as the new cedi is concern. They are now familiar with the
use of the new cedi and easily use it in their day to day trading activities. It also mean that the public
education so far done is enough for the people. Fig 4.4.3

From the interview conducted, it was realized that the market women with low educational background still
need some form of education to become abreast with the new cedi. This sect of market women believe that

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the six months education and announcements were not enough for them. For the purposes of emphasis, the
researcher quotes the exact words of some of these respondents:

Education on conversion: “conversion of the old to new currency is still problem to me”

Education on counterfeit “with the Ghc50 and Ghc20 notes I can‟t easy identify the fake one”. The stated
difficulties reported by those respondents were neither covered during the Bank of Ghana‟s press releases
about the redenomination nor in the public education campaign about the denomination that heralded the
transition, and went on for a period of time after the new currency was introduced.

Overall, majority of the market women opinion of the conversion from the old to new currency was that, it
was simple; all that one has to do is to drop four (4) zeros from the old currency to get the price of an item in
the new currency. However this was not easy for those with low educational background.

5. Findings, Conclusions And Recommendations

5.1 Summary Of Findings
The contribution of the market women to the development of the nation have been recognized by both
governmental and non-government agencies. The research, aimed at assessing the benefits and challenges
Ghana‟s redenomination brought to the market women. The study found out that more youth are now into
trading and owning their own shops. In addition, the sector is no longer for uneducated as it used to be.
Market women are now educated, even to the university level. Furthermore our markets are now major
sources of employment to Ghanaians.

The study brought to light major benefits the redenomination has on the activities of market women in Ghana:
the market women feel safe doing business with the new cedi due to its portability. They can carry huge sums
of money on them without being noticed by rubbers; again, doing business with the new cedi saves time. One
needs not spend time counting a lot of notes when one buys in large quantities. These market women seldom
use counting machines; also, since the new cedi rubs shoulders with the major currencies comparability and
conversion is very easy for these market women. Most of the wares of the market women are quoted in US
dollars. The study has shown that the urban market women easily observe or see the enactment of the new
currency when it is escalating against the international currencies such as dollar.

The study also revealed majority challenges the market women faced in using the new currency. One major
challenge was changing the GHc50 into smaller units especially when customers bought goods from them. In

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addition, customers as well as the market women declined in accepting the GHc50 as medium of exchange for
the fear that when it gets mixing or counterfeited they incur higher loss. The study also showed that the
market women had difficulty with the GHp1 because customers usually refuse to accept it for a change due to
its size. Another challenge was that there fewer coins in circulation making in items that have lower prices
very difficult. Also, the market women had serious problem differentiating counterfeit notes from the real
notes. Based on these findings the researcher can conclude that the objectives had been achieved and therefore
the related questions answered within the scope of the research.

Moreover the analysis of data on whether enough education or preparation was done prior to new cedi,
revealed that majority of the market women had enough education and hence they were conversant with the
new cedi.

5.2 Conclusion
Based on the study conducted, there are many driving factors that led to the redenomination exercise.
However, the research revealed that there are other challenges that came with the redenomination exercise,
notwithstanding the fact that the market women also came out with some benefits of the redenomination.
Finally, Ghanaians market women were yet to fully adapt themselves to the new currency at the time of this
study.

5.3 Recommendations
Due to the immense contribution of small-scale enterprises to the socio-economic development of the country
much attention should be given them in times of policy changes. In appreciation of the contribution market
women the researcher put forward the following recommendations for the enhancement of activities of market
women in the study area.

5.3.1 Withdrawing of GHp1

The researcher recommends that the GH1p coin should be withdrawn from circulation since the general
public do not find it useful and people find it very difficult to handle. As Zabuliene (2005) supports that
flabby currency should be withdrawn and replaced with better ones.

5.3.2 More public education on the notes

There should be more public education on the identification of counterfeits of the new Ghana Cedi notes.
Much of this education should be targeted at the urban market women and rural inhabitants due to level of
illiteracy.

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The National Commission for Civic Education can make use of the various trader groups within the market as
the major avenue to conduct these educations with demonstration on how to better identify counterfeit notes.

5.3.3 Printing of More lower denomination

Since the changing of the GH¢50 notes is still a burden to the market women, the Bank of Ghana should print
more of the lower denominations (Gh¢10, Gh¢5, Gh¢2 and Gh¢1) as well as more coins should be increased
in circulation to solve the problem with changing the Gh¢50 note within the markets.

5.3.4 Providing conversion chart

Since conversion of the old cedi to the new is another major challenge to the market women, there is the need
for Bank of Ghana to keep on providing for the new cedi conversion chart to enable the women to do proper
conversion.

5.4. Recommendation For Future Research

The researcher has identified some potential area for further research work based on the conclusion,
discussion and recommendation. The current study neither addresses the issue whether ten years after the
redenomination, the objectives for redenominating Ghana‟s cedi have been achieved.

6. References

Aluko, S.A. (2007), The Proposed New Naira, Exchange Rate and the Nigerian Economy, www.nigerianmuse.com,
(accessed on April 15 2013).

Anselm, O. (2007) Currency Redenomination: The Cedi Ahead as Politics Halts the Naira,
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Armijo, L. E. (1996). Inflation and Insouciance: the Peculiar Brazilian Game, Latin American Research Review 31: 7-
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Aziz, R. (2007). The redenomination of the Ghanaian currency, the cedi, a study of its impact on the business of the
Financial Institutions in Ghana. www.bth.se/fou/cuppsats.nsf, (accessed on 7 April 2013).

Bank of Ghana (2007), The redenomination of the Cedi, www.ghanacedi.gov.gh, (accessed on 18 April 2013).

Bank of Ghana (2008) a brief history of the Ghanaian cedi, www.bog.gov.gh, (accessed on 18 April 2013).

Bank of Ghana, Ghana cedi quick survey, www.ghanacedi.gov.gh, (accessed on 18 April 2013).

Bank of Zambia, Currency rebasing, www.boz.zm, (accessed on 4 April 2013).

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Blumberg, B., Cooper, D. R. and Schindler, P. S., (2008) Business research, 2nd Ed. McGraw Hill: London

Caballero, R. (2001): Macroeconomic Volatility in Latin America: A View and Three Case Studies, National Bureau of
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Cohen, B. (2004): The future of money, Princeton University Press, Princeton.

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Cooper, D.R. and Schindler (2003).Business Research Methods. New York McGraw- Hill
Dzokoto, V. A. and Mensah, E. C. (2010).Making sense of a new currency: An exploration of Ghanaian
adaptation to the new Ghana cedi. Journal of Applied Business and Economics, 10 (5), 11-18.

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Ghanaian Chronicle (2007), 10% of Ghanaians not aware of redenomination of Cedi – BoG. , 18 January.

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Martinez, I. (2007): Reflections from Latin America: Can new currency abate Venezuelan inflation, library of economics
and liberty, http://www.econlib.org/, (accessed on May 15, 2013).

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7. List Of Figures
Figure 4.1.1

Age distribution of respondents

Source: Field Survey, (2013)

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Figure 4.1.2

Educational background of the respondents

Source: Field Survey, (2013)

Figure 4.2.1

The respondents’ comfort ability in using the new cedi

Source: Field Survey, (2013)

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Figure 5.0 Timing of Redenomination

Timing of the Redenomination

Source: Field Survey, (2013)

Figure 4.2.4

Was there the need to redenomination?

Source: Field Survey, (2013)

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Figure 4.2.5

Ways market women handle money

Source: Field Survey, (2013)

Figure 4.2.6

Benefits of the new Ghana cedi’s

Source: Field Survey, (2013)

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Figure 4.3.1

Challenges of the New Ghana Cedi

Source: Field Survey, (2013)

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Figure 4.4.1

Public Education
Source: Field Survey, (2013)

8. List Of Tables
Table 4.3.1 Problem of changing the new Ghana Cedi

Which of these do you have problem changing

Frequency Percent Valid Cumulative

Percent Percent
GHC50 48 47.5 48 48
GHC20 11 10.9 11 59
GHC10 6 5.9 6 65
GHC5 5 5 5 70
THE PESWESS 20 19.8 20 90
PERSWES AND GHC50 8 7.9 8 98
GHC10 AND GHC20 2 2 2 100
Total 100 99 100
Source: Field Survey, (2013)

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Table 4.4.1 Public education

Do you think enough preparation was done before the introduction of the cedi

Cumulative
Frequency Percent Valid Percent Percent

Valid YES 60 59.4 65.2 65.2

NO 32 31.7 34.8 100.0

Total 92 91.1 100.0

Missing System 9 8.9

Total 100 100.0

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