The Value of the Cedi is Not the Same

The redenomination of the cedi has been a worry to some people ever since it was announced by the Governor of the Bank of Ghana.

To some, it is not necessary at this time because President John Agyekum Kufuor has agreed and informed Ghanaians that the country will be part of the West African common currency next year. Some also say, that the excuses used for the printing of the ¢10,000 and ¢20,000 notes are the same excuses being used for the redenomination exercise this time around, and therefore it is a double standard on the part of the government.

Fear has gripped a number of people for the simple reason that they may lose their money in the course of the redenomination exercise since they least understand the conversion process.

But to others including my good self, instead of printing bigger/higher denominations of ¢50,000, ¢100,000, ¢200,000 and ¢500,000 (using the excuse of the problems associated with carrying huge moneys for business transactions), they have decided to throw dust into our eyes with claims of redenomination. And what? The value is the same? Well let's see if it is.

¢10,000 =GH¢ 1 ¢300,000= GH¢ 30

The calculation is simple. Divide any amount in the old currency by 10,000 and you get the equivalence of the new GH¢. Now what is the value of ¢2,345,678 in the new GH¢?

The answer could be ¢234.5678 or better still ¢234.56p or as the mathematicians will put it ¢234.57p.

If ¢10,000 divided by 10,000 is equal to GH¢ 1, then GH¢ 1 multiplied by 10,000 is equal to ¢10,000. The value is the same.

Again, ¢28,300 divided by 10,000 equals GH¢2.83p; and GH¢2.83p multiplied by 10,000 equals ¢28,300. The value is the same.

But if ¢2,345,678 divided by 10,000 is equal to ¢234.57p or ¢234.56p, the reverse multiplication by 10,000 equals either ¢2,345,700 or ¢2,345,600. And this value or values cannot be said to be the same as being sung on our roof tops.

Assuming all my investment in my life is ¢2,345,678 and in fact deposited at a Bank, which value is not the same in the new Ghana cedi, it is obvious that I may have to lose ¢78 if the Bank gives me ¢234.56p or the bank loses ¢22 if I'm given ¢234.57p by the Bank.

The values are just not the same in many cases especially prices of commodities, goods and services. A salary worker, especially from the public service do have their monthly take home in the form of ¢334,456.67p, ¢5,446,789.89p and ¢998,459.34p. What would then be the same value in the GH¢ after the redenomination? Electricity tariffs and water bills do take the forms of salaries of workers in the public service (e.g. ¢89,456.45p, ¢12,345.67p and ¢56,789.12p). What would then be the fate of consumers?

On the other hand, why should the policy makers choose figures with many zeroes ending just to convince us that "the value is the same" when they know very well that it is not in all cases? There are definitely some form of loses in the redenomination of the cedi.

For, if X=Y and Y=X, then we can make a definite statement that the value is the same. But if proven otherwise (i.e. X=Y but Y'"X), then the value cannot be said to be the same.

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