The Evolution of Ghana’s Currency: From Cowries to Cedis

Ghana has transitioned to using the cedi as its legal currency since 1965, replacing the pounds, shillings, and pence. This change marks Ghana’s departure from the British Monetary System and reflects a broader move towards modernization. The introduction of the cedi and pesewa, along with subsequent redenominations, highlights the country’s economic evolution and the continuing dialogue about its currency’s value in relation to international markets.

Ghana currently employs the cedi as its legal currency, which replaced the Ghana pounds, shillings, and pence shortly after the nation gained independence from British colonial rule on July 19, 1965. Prior to this transition, the West African Currency Board was utilized primarily for regional trade from the early 1940s until 1954.

In 1957, Ghana opted to leave the British Colonial Monetary System, adopting a decimal system that aligns with international standards. The initial cedi notes and pesewa coins were valued at eight shillings and four pence, featuring Dr. Kwame Nkrumah’s portrait, Ghana’s first president.

The term ‘cedi’ is derived from the Akan word ‘sedie,’ symbolizing cowrie shells, which were a prevalent form of currency in the late 19th century. Meanwhile, ‘pesewa’ refers to the smallest denomination of the historical gold-dust currency system and served to replace the British penny.

In 2022, Wonder Ami Hagan from GhanaWeb TV explored the newly-refurbished Ghana National Museum, which showcased currency specimens ranging from the colonial era to the present. A tour guide recounted the evolution of Ghana’s currency, culminating in a major redenomination on July 1, 2007, under John Agyekum Kufuor, which aimed to stabilize the economy with the assurance that “the value will be the same.”

Despite ongoing debates regarding the effectiveness of the redenomination in maintaining value, some analysts have suggested that it inadvertently affected the relationship with the US Dollar. Notably, this reform stipulated that ten thousand cedis were equivalent to one Ghana cedi. The government and the Bank of Ghana cited increasing challenges with accounting and data processing as reasons for the redenomination, emphasizing the need for improved record-keeping facilities.

In summary, Ghana’s currency evolution from cowrie to cedis illustrates the nation’s monetary independence and modernization. The transition involved significant steps, including leaving the colonial monetary system and redenomination to streamline economic operations. While opinions differ on the success of these reforms, they undeniably represent key milestones in Ghana’s financial history.

Original Source: www.ghanaweb.com