One of the first things that people think about when they arrive in a new country is money. Having local currency is key to any international experience, not to mention that many countries are cash economies. Ghana is a cash economy and the local currency is the cedi, which has a bit of an interesting history.
Before independence, the Gold Coast used the British West African pound, standard across British colonies in the region. After independence, everything changed.
Transitioning to the Cedi
The first changes to the money weren’t too dramatic. From 1958 to 1965, the currency became the Ghanaian pound. Each pound was worth 20 shillings and 1 shilling was worth 12 pence and had a 1:1 exchange rate with the British West African pound.
In 1965, the currency was switched to the much more widely used decimal system, and this is when the name “cedi” was introduced. The word cedi means cowry shell in Akan languages, which is what was often used for currency in West Africa historically. Each cedi is worth 100 pesawas.
This first cedi was pegged to the pound sterling at 8 shillings and 4 pence and featured Kwame Nkrumah‘s portrait on them.
The New Cedi
Kwame Nkrumah was ousted by a coup d’etat in 1966 and the new government wanted to remove his image from the currency. This also presented an opportunity to make the conversion rate a bit simpler — one cedi would now be worth 10 shillings or half a pound sterling.
It did not take long for the cedi to begin to lose value, and soon it was worth less than the old cedi. However, it was almost equal to $1 USD, and when the pound sterling was devalued in late 1967 the cedi was pegged to the US dollar. Throughout the 1970s, the value continued to drop and was consistently re-pegged, until it was floated in 1978. High inflation immediately ensued, and so the cedi was pegged again, at 2.80 cedi to 1 USD.
Inflation hit the Ghanaian economy hard throughout the ’80s and a black market for consumer goods emerged and thrived. On the black market, $1 USD was worth about 120 cedi, even though the official conversion was still set at 2.80. Because foreign currencies became harder to come by for imports, the government began the devaluation process and loosened its price controls. By 1990, the cedi became free floating against foreign currencies. Inflation continued over the next decade and into the new millennium.
By 2007, 10,000 cedi were worth $1 USD.
Introducing the Ghana Cedi
Because of all the inflation, in 2007 the government made the decision to cut off 4 digits from the New Cedi, and created what is officially known as the Ghana Cedi. The changeover happened throughout the second half of 2007 and was completed in early 2008.
When it was initially introduced, the 1 GHS was equal to $1 USD, however it gradually lost value over the first few year. Inflation in 2014 hit the currency’s value pretty hard, however a bailout from the International Monetary Fund (IMF) stabilized it. At the time of writing, $1 USD is equal to about 4.50 GHS.
There are six values of cedi notes: 1, 2, 5, 10, 20 and 50. All of them, except for the 2 and a newly issued 5 feature the Big Six on the front and an important piece of infrastructure on the back. They are all different colors and different sizes, increasing as the value increases.
If you are coming to visit Ghana, keep in mind that Ghana’s currency is working in a closed system. You can only get cedi within the country, and you will be unable to exchange it outside of the country. There are plenty of ForEx bureaus throughout Accra and a couple at the airport. Don’t be afraid to stop in a couple to find the best rate.
If you find the design of money really interesting and want to see more examples of the various cedis throughout the year, I definitely recommend looking at the Wikipedia page.