Public rejects one pesewa coin as legal tender?

THE one pesewa coin, the smallest in value of Ghana’s currency, is gradually becoming non-legal tender.

This is because traders, commercial drivers and other service providers place no value on the currency; thus reject it for the payment of goods and services.

Though the coin was issued on statutory authority and is a legal tender for the payment of any amount, it is not seen as such in the country, at least on the ‘street.’

Interestingly, however, multi-national shops like Shoprite, A&C Shopping Mall, Citydia, among others, still accept the currency.

At the last attempt by the Ghanaian Times to use the one pesewa coin to pay for sachet water at the Kwame Nkrumah Circle, Lapaz, and Kaneshie the traders rejected the currency arguing that it was not in use.  

Commercial drivers also refused to accept the currency for the payment of transport fares the Ghanaian Times gathered on a public bus.

The refusal of traders on the streets of Accra to accept the coin, economists say, has contributed to the sharp increase in goods and services since the money was introduced in 2007.

The coin was part of the redenominated cedi which took effect on July 1, 2007 by the Bank of Ghana under the leadership of Dr Paul Acquah.

At its introduction, it was thought that the pesewas which came to replace the 10, 20, 50, 100, 200 and 500 cedi coins would help in the price build-up of goods and service.

For example, it was argued that if the price of a product sold for GH¢1 was increased by seven per cent, the new price would be GH¢1.07 but that has not been the case.

As a result, price increments have been rounded up that using the above example; a seven per cent increment of a product going for GH¢1 now sells at GH¢1.10 short-changing the buyer by 3 pesewas.

A research fellow at the Institute of Economic Affairs, Dr John Kwakye, in an interview with the Ghanaian Times in Accra yesterday said the only solution to rescue the one pesewa coin was to bring down inflation.

He predicted that if steps were not taking to restore the one pesewa coin, it would “disappear in the next few years.”

According to him, the next to suffer the fate of the one pesewa coin would be the 5pesewa because “once you are unable to reduce inflation, your currency loses value.”

To him, the redenomination of the cedi in 2007 was the genesis of the predicament of the Ghana cedi because it had led to high increments.

For example he said “when the money was redenominated, GH¢5 was equal to 50,000 of the old currency. If we were still using that money, it would be difficult to increase prices of a bowl of rice by 50,000 in the old currency but today, it is normal to do so.”

Head of Communications at the Bank of Ghana, Esi Hammond, meanwhile, has told the Ghanaian Times the Bank would be embarking on a public education campaign to sensitise Ghanaians on the need to accept the one pesewa coin for goods and services rendered.

Revealing that the bank still issued the coin, Mrs Hammond reiterated that money was a legal tender for the payment of any amount and that anyone who refused to accept the currency would be in breach of the law.

BY JULIUS YAO PETETSI

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